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Is Angel Investing a Good Way to Build Wealth?

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rishabhgolccha

One investment avenue recently piqued (reawakened in a way) the interest of many investors looking to build wealth angel investors.

Don’t get it wrong - angel investment in India is not new. Starting from a handful a decade ago, the high net worth community of angel investors for startups in India is approx. 26,500-member strong. 


FY 2021-22 was a good year for the startup ecosystem in India. 


     India Inc witnessed the growth of 54 new unicorns and early-stage funding, especially through angel network investment, reached record levels in 2021-22. 

Conventionally, angel investors for startups in India were super angels, high net worth individuals, family offices, etc. However, the nature of angel investors, in the second funding boom of 2021-22 (first was in 2012-14), has seen a profile makeover. 

Wealthy stock market traders, lawyers, bankers, successful second-time founders, cash-rich startup employees looking to redeem ESOPs and even some salaried employees with sizable disposable income looking to capitalize on the startup boom and build wealth. Also, post-pandemic, investors with conventional real estate or stock market-driven portfolios are looking to become angel investors in India for wealth generation due to the significant value of the sector. 

Further, the recent popularity of shows like Shark Tank India, the positive media coverage of unicorns and better access to investment platforms has popularized angel investing among the non-traditional yet eligible set of new angel investors in India looking to invest in the next startup success story.


Angel investing is a smart way to grow wealth.


     There are evident indications that angel network investments are developing as an attractive alternate investment class for wealth generation, especially for the new profile of angel investors in India, alongside conventional investment avenues like mutual funds, stock markets, bank fixed deposits, etc. 

Thus, if you are someone who wants to take calculated risks, fund innovative ideas, and help shape the economy, all the while building good wealth for yourself, then you can plan on becoming an angel investor in India. 

However, angel investors for startups in India have their set of challenges, volatility and uncertainties, just like all other investment avenues. 


There are a few ways to hedge your risks and circumvent some of the common pitfalls of angel investing. 


The obvious solution is proper research of the market and the available investment opportunities. Secondly, always determine the exact amount you can afford to lose if the investment does not succeed. Thirdly, diversify your investment portfolio to cushion the blow of a failed startup funding. For new angel investors for startups in India, it is best to start with small amounts and known industries and then go for higher and more diversified investments. 

One of the best ways to network and build a good portfolio is to join an angel network investment platform. New angel investors in India are looking for expert guidance and therefore prefer angel groups, networks, and incubators like Venture Catalysts that offer curated investment opportunities by connecting the right set of experts, investors, and businesses. 

With an expert network of investors and an all-round ecosystem that identifies, nurtures, and develops attractive investment avenues, angel network investment platforms like Venture Catalysts can be your ally in the highly rewarding, albeit volatile, market of angel investing.


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rishabhgolccha
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