Review of a Germinal Book
on Angel Investing
Angel capital is a common source of funding for budding ventures. An example lies in the United States, where the level of financial support from business angels is comparable to the sum from venture capitalists.
Moreover, the practice of venture capital is still in its infancy in many other countries. For this reason, the business angel tends to play a larger role in the sponsorship of fledgling firms.
Despite its crucial function, though, the field of angel capital is obscured by a mantle of rumor and anecdote rather than fact and data. An exemplar lies in the U.S., where concrete data on angel capital is hard to come by. Not surprisingly, the scrappy state of affairs is even worse in the rest of the world.
On the upside, however, the dearth of knowledge has become less acute in recent years. A good example is found in an incisive program of research pursued in America. The probing has shown, for instance, that business angels have a penchant for investing in stable firms as well as newborn ventures. Moreover, the usual preference is to invest in a company that has attained a positive cash flow rather than a venture on the verge of bankruptcy.
As a group, business angels invest in a broad spectrum of industries in addition to the pacesetters in the technology sector. At the level of the individual, a cherub is apt to favor the industry they know best from their previous experience in the field.
The angels resemble other sources of informal capital in a number of ways. In particular, the cherubim usually have no more experience, expertise or capital than the friends and relatives of the entrepreneurs.
Read more on Real Story behind Angel Investing.
