One of the greatest challenges facing startups today is that of raising capital. Only very few Tech startups are aware that apart from their savings and funds from family and friends, banks, venture capitalists, etc, they can also obtain a lift from Angel Investors to start off their businesses. In an inspiring session on the Guest Interview segment of Tech Trends on Channels Television, Collins Onuegbu, was on hand to shed more light on the role of Angel investors in funding startups.
“An Angel Investor is a person who puts money in a startup company with the intention of making money out of it.”- Collins Onuegbu
Collins stated that, usually, Angel Investors are affluent individuals who invest a smaller amount of capital in the early stages of startup companies. In return, the Angel Investors get equity ownership interest.
“A successful Angel Investor is one who exits as many times as possible,”- Collins Onuegbu
An Angel Investor, according to Collins, is not exclusively philanthropic. He or she should be able to pull out his or her investments from the startup, once it is well grounded and apply these funds in other ventures.
“Generally, an Angel Investor will look for a startup that is likely to succeed in a big way so that his or her money won’t be lost.”- Collins Onuegbu
On what kind of investments Angel investors dabble into, he was of the opinion that an Angel Investor will carefully assess the market opportunities of the startup as well as the opportunities of the venture becoming a very big business. Often this has to be interesting technology coupled with intellect.
“Most angel investors are entrepreneurs themselves. It is, thus, best you choose an Angel Investor with experience that has worked with successful companies. Such are the Angel Investors who will help you grow.”- Collins Onuegbu
Accordingly to Collins, Angel Investors only provides capital for the startups and he or she is not involved in running the business. It is, however, important to keep the Angel Investor updated on the business, preferably on a monthly basis.
Collins Onuegbu is an angel investor and the Executive Vice Chairman of Signal Alliance.