I am interested in angle investment for three main reasons:
1-Being More Engaged. Typically, the entrepreneurs who approach angel investors are starting their first company and have little to no business experience. As an angel investor, you have the opportunity to become more involved in the formation of the new business. You have the opportunity to mentor and help grow an idea into an operational business. If you compere venture funds, loans and so on to angle investing, you see that the former have a more formal approach. . The managers of such organizations care more about numbers than they do about the team. They focus more on formalities and meetings focused on numbers rather than actually spending time discovering what team members can bring to the table.
2-Taking More Risk. Since angel investing requires less capital per investment, angel funds take bigger risks, meaning they can afford to make more investments. In this stage the quality of the team members matter more than any business plan or even unique idea, which the entrepreneurs may have. Also in this phase a typical investment is far less than the typical venture stage, however there is more mentoring. Requiring less capital will motivate angel investors to make more investments.
3-Better Negotiations- Since teams that approach angel investors are less structured (a good angel investors actually helps with structure building), they can negotiate better terms with entrepreneurs. Also, since the nature of these investments carries a higher amount of risk, this negotiation and favorable agreement is well deserved. This can bring higher rewards in the later rounds of fund raising or when exiting.