How will angel investing evolve?
Updated: Jan 5
(Answer requested by Steven N.)
Today angel investing is done in three major ways:
#1. Via referral/chance-
You meet a company, like the company, and decided to cut a check.
#2. Via an angel group-
Angel groups are communities of early stage angel investors who gather to pool their deal flow and brainpower. Oftentimes many angels will get in on a lot of deals by being able to cut smaller check sizes across more deals. In theory, investing in more deals with like minded investors should de-risk your investment through diversification.
#3. Via online syndicates-
Similar to #2., there are online communities of investors. Some platforms syndicate their deals, others simply facilitate access to deals.
In the future; especially as the angel investor community evolves, access to deals will no longer require vast personal networks that take years to establish.
In the future, deals will be found & invested in online; giving a greater number of investors access, and a great number of companies the opportunity to fundraise.
As the ecosystem is democratized, things will become increasingly competitive for everyone involved.
Moreover, syndicate groups will likely continue to grow more and more popular as a means to offset risk & diversify investment portfolios. More people will enter the space.
Did you know there are 4 million potential, accredited investors in the US alone?
This is just the beginning.