Angel investor pours the funds in various amounts, ranging from US$25,000 to US$500,000, focusing on early-stage startups.
Heaptalk, Jakarta — The term angel investor is frequently used in the startup ecosystem, mainly related to the capital injection.
An angel investor is a party who provides strategic funds through investment activity to startup companies. In addition, an angel investor is also pinned as startup investors because of their presence in helping companies in the early stages of developing their sustainability. As a result, angel investors will procure a share of the invested startups.
They pour the funds in various amounts, ranging from US$25,000 to US$500,000. The funds provided can be a one-time investment fund injection to assist the startup founders in managing their businesses. In multiple cases, the presence of an angel investor is the final option when the founder encounters the impediment of getting loans from banks or venture capital firms.
Unlike venture capital, angel investors focus on the startup’s early stages, while venture capital targets the growth stage startups. Therefore, angel investor typically dispenses the strategic investment in the initial establishment of the startups.
To gain the injection from this investor, the startup founders must keep an eye out for multiple points: set up a business model, formulate an elevator pitch, conduct a geographic approach, target investor groups or industry associations, and identify the investors’ characteristics.
Types of Angel Investors
1. Family and Friends
Generally, this first category is the primary preference of the startup founders due to having close relations to be more reliable and trustworthy. Therefore, businesses frequently attempt to gain investment from family and closest friends. Besides the close kinship relationship, the agreement in force is a legally valid business agreement.
2. Group and Community
In this second type, Indonesia possesses an official community that oversees these angel investors, namely the Angel Investment Network Indonesia (ANGIN). As it is known, a well-organized group and community can complete the capital distribution process. In addition, the funds raised can also be obtained larger, coming to be a promising alternative investor for startup founders.
3. Rich People
The other type is those with plenty of money, frequently called rich people. Rich people, including doctors, and successful business people, with high net worth, commonly look for a place to invest their assets. To seize the investment of this angel investor type, startup founders are expected to join particular events and expand the network to conduct a meeting.
