Angel Investment by Professionals- A dip towards Entrepreneurship
I once, somewhere read that, “To plant a garden is to believe in tomorrow”.
I believe the same could be said about startups.
The world is evolving faster than ever with technology pervading into each aspect of life. And in an increasingly open-knowledge society with favourable access to capital, it is the new-age lean companies which are likely to shape and have a far greater impact on the business & economic landscape than traditional businesses. So, in a lot of ways, the willingness for individuals to embark on the startup journey – whether it be as founders, team members or investors – is a willingness to believe in tomorrow.
Focusing on angel investors in this article, I now see more and more professionals, be it doctors, lawyers, business associates getting inclined towards investing in startups than in the traditional culture of investing in lands and properties.
In angel investing in startups, one is much more in control of their investment as compared to other asset classes. You can also grow it further by investing your time and mentoring to grow the startups you have invested in, rather than being mere spectators when you used to invest in gold, stock market or lands. Thus, one successful angel investment can give you a lot of financial freedom which everyone aspires for.
Also if the respective startup does well, it has the potential to make outsized returns which far exceed the returns on other types of investments.
So I would list a few reasons highlighting the same.
• Other Asset Class Giving Good Returns
The traditional investment products promise a safe and steady return. But these are seldom enough to beat inflation over a long-term. Real estate & equities have given below 5% returns in previous years and seeing the COVID-19 situation we can very well expect the return rate this year.
• No Recession In Startup Funding
COVID-19 may have turned our life upside down but I believe COVID-19 pandemic is also the best time for a new wave of Indian startups to grow and go global. As an entrepreneur, one’s ability to make the most of the situation is the key to your success. You can build a great company during turmoil, but read the market scenario well and keep your eyes open for good deals.
• Angel Investing Is NO More A Territory Of Only The Super-Rich
Angel investing is a wonderful way to add a high-risk, high-return asset class to one’s portfolio, and is absolutely critical to progress in the longer run. It’s not just the super-rich who have the opportunity to invest in startup businesses, but it is now easier than ever for working professionals or employees of private-sector organizations to be able to evaluate and invest in startups in a transparent and convenient manner.
So to conclude,
Entrepreneurs of India have tasted blood (read ‘success’). With our young population and multitude of existing challenges (read ‘opportunities’) in the country, the path is set for the startup story to grow manifold in years ahead.
This is also a fact that investing in a startup and riding its journey teaches much more than learning one gets in their regular job. If you have the risk appetite, don’t miss out on this asset class for the sake of convenience with an old investment instrument.
To quote Robert G. Allen (Author of ‘The One Minute Millionaire’),
“Thriving investors don’t play it safe. How many millionaires do you know who have become wealthy by investing in savings accounts?”