Are you finding yourself conflicted about the answers to questions like is angel investing a scam or a sure win?
Well, look no further because, in today’s post, I will share with you everything there is to know about this form of investment and disclose how this can be a great way to start your future business.
So, dust off your business proposals now, and let’s get it on. 😊
The disastrous pandemic has seriously changed every aspect of our lives, including how we interact, shop, and even our perceptions on finances and life itself.
I am not saying that we are suddenly becoming adults, but we can all agree that the recent events that have been going on lately have made us more mature in specific aspects.
Others, on the other hand, are starting to look for side hustles they can do in their spare time, such as online tutoring (via WyzAnt or online ESL companies), freelancing (Upwork or Fiverr), and starting up online shops (Etsy or Amazon).
And to be honest, I think that this is somehow an example of how empowered we have all become during the lockdown period. 💪
Most of us did not waste precious time and instead upskilled through massive online open courses and have even tried to put our experiences and hobbies into good use.
And perhaps this is the reason why you landed on this page. 🙂
You probably have a vivid business idea in mind but are unsure of whether you have enough to fund that dream, or maybe you are a solid investor with disposable change willing to support a new business.
If I got it right, then this post is most definitely for you. Today, I will present a comprehensive explanation of angel investing and the usual strings and risks attached to it.
Before we start, let me just clarify that I am not sponsored to write this post, nor am I going to provide you with hyped-up reasons why you should chase this opportunity. What I have here today is my absolutely transparent opinion on this alternative investment.
By the end of this post, I will also share my most recommended way of earning online so that you won’t have to expose yourself to the same risks involved in private equity and venture cap.
Ready for an illuminating post? Let’s get this party started. 🎉
What Is Angel Investing?
A million-dollar idea will only stay an ‘idea’ if you do not have enough funds to turn it into reality. Instead of boxing the thought and adding it to the highest shelf, never to be opened again, I highly suggest that you check on the concept of looking for angel investors.
Just as the name suggests, they are ‘godsend’ people who have enough cash and able to support you and your idea in exchange for something. I’ll elaborate more about what “something” means later on.
But for now, I want you to get familiar with the concept of it and the risks involved in angel investing. According to Corporate Finance Institute, the term “angel investing” actually has come not from the finance world but in the theatrical scenes.
Have you ever wondered how artists then continued production even if they did not meet enough viewers? Well, one of the ways they were able to do so is through the help of wealthy families who provide enough money to show support.
Angel investing is essentially a form of investment for interested people with honest beliefs that you will succeed in your business idea.
Traditionally, they are usually extended family members. 👪
Still, given the advances in technology, nowadays, anyone can invest and provide you with the seed money you need so long as you provide a clear contract stipulating the terms and conditions.
Depending on the project, some angel investors (also known as seed investors) may provide financial backing in exchange for company positions within that business, ownership, or a certain monthly percentage from the profits.
The business that we are talking about here is on a smaller scale but has the potential to expand.
Angel investors are usually anonymous, but some well-known examples of companies who started with angel investors and venture capital firms but have massively expanded are the following:
And this exactly is the reason why a lot of willing investors are interested in trying out angel investing. Most are hoping that they can bank on companies or businesses that become prominent in the years to come.
So, in short, in the perspective of angel investors, what they are doing is like funding and buying shares of a company at the same time.
In today’s world, anyone can become an angel investor, including, but not limited to, family members of yours who will most likely unselfishly support you because of your relationship to even professionals in the business industry who are trying to breakthrough.
Also, large companies, banks, entrepreneurs, and even crowd funders, which in a nutshell are, a group of people willing to chip in small amounts to help you reach the target goal.
In some cases, there are also what we call “angel syndicates,” which is basically a network of angel investors who pool capital together.
In simple terms, this syndicate is like crowdfunding, but the amount is on a more considerable range. Each angel here should be an accredited investor and must have at least a million worth of assets.
More importantly, they are usually willing to help out in operation, so you are also gaining a real partner for your business startup.
You must be thinking that not everything is as pretty as it seems. 🌺
Of course, if you consider pitching your business to these companies, you have the responsibility to ensure that your business will not fail.
I mean, now that you have other people’s money in your pocket, you will have this sense of urgency not to fail. At least I would.
And if everything goes according to plan, please note that your angel investors have a say on how you will run the business as they are considered part-owners.
Things are run differently if you find funding from lending institutions since they do not have control over your company, nor will you need to give them benefits like a company’s share or a specific percentage.
At the same time, if you deal with these institutions, you will be required to pay them off, which is quite contrary to angel investing-based funding, where you do not have to pay them back in case of failure.
Do you want my advice? Suppose you have a real million-dollar idea in mind today and willing to put yourself out there. 💰💡
In that case, you should consider purely working with angel investors than crowdfunding and lending institutions. If you go down this road, you won’t have the extra responsibility of paying people off if you fail.
But of course, simultaneously, you must communicate with the people you are dealing with and make sure that everything is in place and going according to plan.
If you are an aspiring angel investor, it should be pointed out that you can quickly lose money here in the same way you can make it. It’s a bit conflicting, don’t you agree?
Well, just like in any aspect of entrepreneurship, the chances of failing are always there, but if you have around $100k to $200k lying around, you can most certainly become an investor.
However, if you are only comfortable shelling out a few hundred bucks, crowdfunding might just be the one for you.
This form of investing allows you to invest only what you can, ensuring you have your investment back. Some of the most popular crowdfunding sites are FundRazr, GoFundMe, Kickstarter, Patreon, and Indiegogo.
How Does Angel Investing Work?
Before you jump and suit up for a business meeting, it is essential to note that you have prepared really well, as not all pitches are given the opportunity to see the light.
Therefore, I advise that you seriously think things through and ask yourself the following questions.
Is this your passion? 💖
As you might know, passion is necessary to build a high-quality brand that is not all about profits. If you’re not passionate enough from the start, you’ll never stick it out.
What are your specific goals for the company in the next five to ten years? 💭
Outlining them will make the entire process much more measurable and predictive at the same time.
How thorough is your game plan, and have you conducted a case study? 🗺️
Determining how comprehensive your project is might just expose all the flaws in it, therefore saving a lot of time and effort.
What makes your scheme vary from other similar platforms and apps? 📲
Creating a prototype might not be a bad idea, especially if you’re targeting a niche dominated by big names.
What are you giving as a benefit to your angel investors? 🤔
There really is no exact way on how you can reach out to investors, but given the climate today, I highly suggest that you reach out through LinkedIn and hold virtual meetings to pitch your ideas to some of the current entrepreneurs.
Whatever you do, just please make sure that you give valuable something alongside your clear explanation of how you will use their funds.
However, suppose you think that you have a real shot at making your company or idea big.
In that case, you can also directly contact some of the high-profile angel investors like the ones on this list or sign up with various widely known angel investing or crowdfunding websites.
Please be aware that before they take you on board, they will require you to present your idea first and even ask for a prototype.
Therefore, I highly suggest that you first work on your idea and business proposal before ever considering reaching out to them. Once you get accepted, you can expect angel investors to pitch even up to 300k for your project.
But for the case of crowdfunding, you can raise any amount (even millions) but be sure you have a clear understanding of how you will pay off your funders as some of these crowdfunding websites do require you to pay back.
Here are also some of the things you should note before jumping the gun and signing with an angel investor: 👇
Ensure that the benefits are clear and find out how much percentage they will get from your profit. Discover the exact number of shares you exchange for their money, or will you be giving dividends?
See the background of your investor and the overall deal. Is he usually aiming to invest with the right motives in mind?
Identify what the roles of your angels will be. Aside from funding the project, will your angel also have a more leading role, such as being an advisor, board member, marketing and operations expert, or recruiter?
Last but not least, please do not forget to sign a contract of a term sheet with a lawyer, making sure everything is clear for both parties.
Is Angel Investing A Scam?
Angel Investing is not a scam and is one of the best ways to establish your business. It has its pros and cons, but it really depends on how confident you are with your business idea at the end of the day.
If you have thought things through, you will find that investing in lending companies may be much better since you can instantly get a lump sum and pay them off without giving away a portion of your profits or company.
However, if you are interested in getting funding and having some level of support in terms of operation or how to run your business, then finding and reaching out to an angel investor is the way to go.
On the other hand, if you are interested in becoming an angel, please note that you must be investing with the right motivation: you believe in the company and its capacity to expand.
When it’s all said and done, entrepreneurship is a hit-or-miss opportunity. 💯
This is still the best way to become financially free, but contrary to common belief, you don’t have to have loads of cash just to set up your business and get things going.
Look at me, for instance. 😇
Although it sounds like a cliche, the website you’re currently on right now allows me to finance the life I’ve always wanted, and if you’re ready to follow me in this journey, you should hear what I have to say next.
How I Make A Living Online
As pointed out, this website is a passion project of mine, and there’s no doubt that I wouldn’t have achieved financial freedom without it.
I’m far from earning millions, but my monthly earnings are more than enough to finance my current spending as well as provide me with enough spare time to enjoy life and taste experience to the utmost and fearlessly seek newer and richer adventures.
I promise that it wasn’t always like this, but nowadays I’m one of the few who benefit from the advantages of working from home.
Although my modesty keeps me from saying this, I have to, so you better understand the magnitude of this profitable opportunity.
I currently earn around four to five thousand dollars of passive income on autopilot monthly, but you better believe that it took me a lot of time and effort to figure everything on my own and get to where I am today.
The whole idea of this latter part of my post is to give you an idea of how you, too, can make a living online and hopefully get you to understand that you don’t have to be a tech wiz to reach the level I’m at.
You surely can reap the rewards of this and flourish from what my friend would call a once-in-a-blue-moon chance to unf*ck your life or, in some cases, an opportunity to continue to thrive at a pace better than before.
My sole purpose is to save you some time and relieve you from the hassle I had to go through when I first started out myself.
If everything turns out alright, you’ll soon be on your way to building your very first successful online business, but although I would save you some time, I sure as hell won’t be able to do all the work for you.
The opportunity I’ll be sharing with you is indeed a lucrative one. 💸
Still, it requires your full attention, dedication, and perseverance, and only then will you be able to enjoy the fruits of your labor.
So, without further ado, to better grasp how I make a living online, I highly suggest that you look at my money guide as it explains everything you’ve always wanted to know about earning dollars online.
In it, I’ve outlined some of the better benefits of this making-money-scheme and also share what I believe is the best way to get started with literally less than two bucks per day.
I also speak about the passive potential that it has and make known some of the reasons that led me to embark on such a journey in the first place.
The entire read shouldn’t take you longer than 7-8 minutes, but just in case you feel like you don’t want to do it at the minute, I’d be happy to summarize the entire process in, most likely, 300 words.
So, I’m not sure if this is the first time you hear about it, but the business model I’m dealing with is known as affiliate marketing, and as an affiliate, my job is to promote and sell other people’s products and services in exchange for a predetermined commission.
Most often than not, the commissions are big and usually surpass the %40 marks, meaning that I get to take nearly half or more of the profits with me without even owning the product or service I’m promoting.
The commissions are great; there’s no doubt about that, but what’s even better is that most of them are recurring ones, and as discussed in my money guide, they help me achieve the so-called snowball effect. ☃️
This effect is a metaphor for something that starts small but grows with time. I speak a bit more about it in my guide, so to better understand, I highly suggest that you thoroughly go through the entire thing whenever you get the chance.
Affiliate marketing is unquestionably one of the best ways to get started online, and in my mind, it easily overperforms all the other well-known business models such as trading, dropshipping, lead gen, etc.
You might not take my word for it, but due to the forever-increasing number of internet users, now is the best time to jump in on the bandwagon and join the many successful affiliates who are achieving their goals on any given day.
As has already been said, I’m an affiliate marketer myself, and here are my top ten reasons why you should consider becoming one yourself:
- It’s the most beginner-friendly way of earning online.
- It’s an evergreen business model that dates back to the 1980s.
- It’s a booming industry that is set to reach $8.2 million by 2022.
- Affiliate marketing is considered a low-risk-high-return investment.
- You can get started with less than the price of a sandwich. 🥪
- It’s performance-based and becomes passive with time.
- It doesn’t require any previous knowledge or expertise.
- It quite flexible and allows you to work from anywhere you want.
- You have complete control of your business.
- 5.6 out of 7 sites are affiliate ones.
To tell you the truth, along with all the other widespread business models out there, this one also has its own set of drawbacks, but that doesn’t make this opportunity one less worthy of pursuing.
I’ve tried to make a living online through several methods, but none of them work as great as affiliate marketing does for some reason. Although it has its cons, I comfortably claim that the benefits comfortably outweigh the negatives by a ton.
Yet again, I sincerely hope you’ll at least consider going through my guide as I’m firmly convinced it will open up your eyes and help you understand that anyone can achieve the same results as I have.
I don’t want to bother you anymore, so hopefully, I able to give you a solid answer on whether angel investing is a scam and a complete waste of time or not.
For inquiries on how my money-making scheme works and how I can help you out, please leave a comment down below, and as always, I promise to do my very best to reply to it promptly. 👋