Angel investors embracing digital
The emergence of crowd equity platforms and the digitalisation of investment has allowed more people to invest when they want, and the amounts they want. It is clear that technology has the potential to fundamentally enhance and create opportunity within the angel investment model. At Delio, we’re increasingly seeing deal-sharing platforms improve links between different parts of the ecosystem, making opportunity more transparent, increasing deal capacity and improving connectivity.
Co-ordinating a network or syndicate at times can be a cumbersome process – be it screening through multiple deals and business plans, conducting due diligence, as well as the ongoing monitoring of each investment. Online platforms speed up this process through streamlined processes and improved distributional channels. In an age where everything is so instant, it is no wonder organisations are exploring their options digitally with a view to providing support to their existing models.
The advantage of speed and access is also creating more angel investors. It is now easier for those traditionally “time-poor” professionals to have a piece of the action. Investing in start-ups used to be reserved for venture capitalists and high connected angel investors. Online platforms enable individual investors and angel groups to access start-up investments that were not previously available to them. Business owners and new angels who wouldn’t have had the right connections to get in contact with angels now have access to a plethora of great opportunities.
Online platforms give investors access to a broader range of opportunities. This is important as often the most appropriate investment opportunities might be out of reach of an investor, maybe disproportionately found in more densely populated geographies or a particular sector hub. By being able to reach more investment opportunities outside of their local and regional areas, angel investors have a much higher probability of coming across a more diverse range of opportunities.
Dealshare platforms can also serve as an acquisition channel for angel networks, driving revenue and increasing liquidity within the ecosystem. They can enhance product offerings to help meet the entrepreneurial needs of today’s high net worth investors as well as allowing for easy back office management in areas such as the structuring of sign off processes pre-deal, or document activity during execution.
For angel investors with greater entrepreneurial experience and more time, local angel groups are fantastic. Being part of a group, with a combination of experience and expertise, makes decisions more informed. They have the opportunity to meet the founders, have in-depth discussions, negotiate and conduct due diligence.
Having an online platform which complements the offline model is advantageous and makes logical sense, enabling more angel investors to leverage the benefits these groups provide within their local vicinity. The platforms allow investors to make better use of their time and access a much broader range of investment deals. We anticipate that digital platforms will become increasingly important in angel investing as they continue to grow in popularity.
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