What It Takes to Be an Angel Investor: Requirements, Risks and How to Mitigate Them

Angel investing has emerged as an exciting opportunity for individuals eager to invest in promising startups. As an angel investor, you provide early-stage capital to help these startups grow in exchange for equity or convertible debt. You are not only contributing money, but often offering advice, mentorship, and valuable industry connections to the founders. However, angel investing is not without risks, and there are specific regulatory hurdles and tax implications to consider before diving into this world. This article will cover what it takes to become an angel investor, the risks involved, the regulatory requirements, and some smart strategies for mitigating those risks. What is Angel Investing? Angel investors are typically individuals who invest their personal money in early-stage companies or startups. These businesses often don’t have access to bank loans or venture capital funding because they are still proving their business models. By providing funding, angel...