Attend Startup Impact Summit by WHub on January 25th, 2019 in Hong Kong to meet world-class entrepreneurs and investors. Get your tickets.
An increasing number of investors are looking beyond traditional assets such as stocks and mutual funds by investing in startups as “angels.” This new trend is spurred on by the facts that more talents are joining startups, and technology is enabling investors to directly access startups. It is easier than ever to become an angel investor and build potentially life-changing wealth.
“I always tell folks that I don’t need to figure out if your product will succeed, I just need to know if you will succeed.” — Jason Calacanis
Top Talents are Joining Startups
Over the past 15 years, there has been a tremendous shift in the types of industries pursued by top talents. Where once the lavish lifestyles of bankers and traders lured Ivy-league graduates to Wall Street; now many of these coveted graduates are pursuing careers in technology and entrepreneurship. For some, the allure of the collegiate feel of many Silicon Valley tech campuses proved irresistible; for others, it might have been the desire to become the next Mark Zuckerberg of Facebook, or Travis Kalanick of Uber.
Although many large technology firms attempt to woo top graduates with high salaries and generous stock options, many recent graduates reject the monotony of a desk job. Instead of prioritizing financially-stable careers, they take bigger risks in search of something more “meaningful” or “fulfilling” in the startup ecosystem. Altogether, this seems to have encouraged more people to forge their own path by becoming entrepreneurs.
This strong pull factor means that there are more talented, driven, and ambitious people working in startups than ever before.
The Best Time to be an Angel Investor
A proliferation of entrepreneurship also means that investors have more opportunities to find appealing early-stage investments to help diversify their investment portfolios. Startup investing is often more personalized and direct compared to stocks and mutual funds, with the potential for outsized returns. An increasing number of experienced professionals, those in their mid to late-stages of successful careers, are becoming angels by investing directly into promising startups of their own choosing.
An angel investor is someone who generally contributes USD5,000 to USD500,000 to a startup that is less than three years old, with little or no revenue, in exchange for equity. By putting money in at a company’s earliest and riskiest stages, an investor has a chance to get back outsized returns compared to traditional assets such as bonds or ETFs. In addition, there’s bragging rights if one picked the next unicorn.
Angel Investing is High Risk, High Reward
According to Jason Calacanis, world-renowned angel investor who backed Uber, betting on early-stage startups can return life-changing wealth.
“Stock market in the US has returned, on average, 7% a year. It will take about 10 years to double your money. Government bonds are recently trading around all-time lows, it will take about 30 years to double your money.
Angel investing is high-risk and high-reward. It is the highest-risk investing in the world. But, if a startup in which you are an early enough investor becomes a unicorn — a company valued at $1 billion — you will return life-changing money.”
Technology Democratizes Startup Investing
Investors and entrepreneurs today have more tools to directly connect with each other than ever before. Once exclusive to those invested in a VC fund, many investment options are now available to anyone with an internet connection. Equity crowdfunding platforms such as AngelHub bring highly vetted startups to investors directly. Investors give up control of their capital when investing through a venture capital fund — you can now make your own decisions at your own pace with equity crowdfunding platforms.
Come to hone your skills as an angel investor at the Startup Impact Summit by WHub on January 25th, 2019 in Hong Kong. Get your tickets to meet Jason Calacanis and many other world-class entrepreneurs and investors. Jason will also be hosting an exclusive angel investing workshop for a private audience. Email hello@whub.io to find out more with “Calacanis” in the subject.
