Do you want to know the benefits of early insider investing? Just ask the serial early investors: Angel Investors.
Why do angel investors do what they do? Why do they love early-stage investing?
Here are some of the reasons:
Returns. Despite their high-risk reputation, early-stage investing can be highly rewarding. It’s why angel investors are drawn to early investing. For many early investors, if you know what you’re doing, the returns can top venture capital and private equity returns.
Up-and-Coming Trends. Many early-stage investors point to the opportunity to invest in up-and-coming trends as one reason they’re drawn to investing early. Investing early in a trend with sticking power offers the double benefit of growth and sustained income. For example, the early investors in Google and Amazon latched on search and e-commerce trends with long-term, lasting power.
Open Access. Early investors enjoy open access to the sponsors and managers of their investment companies, which allow them to offer their input and have a say in the direction of their investments.
Open access also gives early investors insight into a company’s inner workings, business plan, and long-term strategy – allowing investors to align their investment objectives with those of the company.
Diversification. Early investing opens up the world of investment opportunities to investors not offered in more traditional markets – expanding diversification through opportunities in new asset classes, geographic markets, deal structures, and sponsor background and expertise. In addition, early investment capital requirements can be as minimal as $10,000 – $50,000 – allowing for investment across multiple companies.
Giving Back. Many early investors enjoy the opportunity to give back to communities through their support of early-stage companies rooted in these communities – by fostering economic growth that directly benefits residents of these locales.
Investing in early inside opportunities as part of a group of exclusive invitees can offer investors not only potentially outsized returns but also other benefits – quantifiable or otherwise.
For some early investors, the satisfaction of helping early-stage communities and giving back through their input and support of these early companies and the communities in which they’re rooted adds to the overall return from investing in these early opportunities.