Financing Technology Ventures—Building an Angel Community

Abstract

In the investment community, angels refer to individuals who are not related to the entrepreneur, and who are investing their own money in private ventures—the common practices were among some of the oldest private funding commercial activities by humans, with records dating back to the golden age of Greece (Benjamin and Margulis 2005). Practices of an angel in the twenty-first century include providing the capital for start-ups, in exchange for ownership equity. While angels are generally high-net-worth individuals, most angels are successful entrepreneurs or senior retired executives. The normal size of an angel investment ranges from USD10,000 to USD250,000 per venture. A majority of angels tend to invest in the equity of start-ups or early-stage technology ventures with significant growth potential. Many active angels concentrate on the industries they understand or have direct experience in. They often provide mentorship and social network to young entrepreneurs of the ventures they have invested in.