In simple words
We are seeing an angel investment trend in the crypto market right now. Many whales lend enormous amounts of money to young projects, expecting this projects to return their money back after some time. The main difference between an angel investor and a venture capital firm is whose money is invested. Unlike venture capital firms, who use the money of investment funds, angel investors spend their own money.
Such people search for teams, who have already proved their reliability, but need capitals to develop their new product. They basically become the person, helping the team without participating in the project that much.
That has multiple advantages:
- Experience. Serial entrepreneurs often start searching for investment opportunities after they launch a couple successful projects and of course they’ve been through a lot. Their knowledge and contacts could make reaching a decision or attracting attention of the right people much easier.
- This also means attracting side investments, if the investor really sees perspectives in your project and the fuse in the team.
- Loyalty. Sometimes, investors can be bossy and big-headed, but the ones, who take care of their team’s members are really a treasure. Those friendly people will not only give you the time, you need to finish a task, they will also be the person, uniting team members to reach the highest productivity possible.
- Quick decisions. Continuing the idea of loyalty, if you earn the investor’s trust, receiving urgent income becomes much easier. That is so, because while the investor believes you aren’t fooling him - you’re good with asking for additional investments.
- A future friend. Usually, projects stay in close relationships with the investor even when the deal has already ended. This takes us back to the first advantage - the contacts, when you are now the person, who knows other figures, important for the industry.
- Taking risks. Vice investors don’t mind risking and even if the project doesn’t have many visible prospects, a great investor could give such start-up a try.
- No obligations. The project usually only has to give the investor’s money back if they moon. However, there are no assignments of giving the money back if the project doesn’t succeed, so the founders of the start-up take no risks. As well as if the start-up starts giving actual income both parties profit.
And, most importantly, such investors are easy to find. Here are some ideas on how to search for them:
- Angel list. The biggest platform, linking project with investors.
- LinkedIn. A well known app, that might help you finding your angel.
- Aggregators. Try listing your project on upcoming event aggregators (such as our HODLERS project). Such services are usually monitored by angels and entrepreneurs often find support here.
The situation might be different from project to project, but considering the current market situation VCs aren’t the best option to gain investment from and angels could be the panacea.