What do you know about angel investing?
Posted: Sun Jan 19, 2025 9:50 am
When we look at giant companies in sectors such as technology, for example, we can forget that, at some point, they were just an idea . And that nothing we know today would exist if someone or a group of investors had not believed in the potential of the business and contributed capital at the very beginning. These people are what we call angel investors.
In an exclusive class for LIT students, Saint Paul Business School professor, director of the Leading Digital Reinvention program and co-founder of Poli Angels, Cláudio Cohen , spoke about what angel investment is, how it works and its position in the current Brazilian scenario.
Understand the main characteristics of angel investment
After all, what is angel investing?
In general, it can be said that angel investment is that colombia whatsapp data made by a person or group in high-risk businesses, whose success has not yet been proven. In other words, angel investors support entrepreneurs in the initial phase of their startups , a time when it would be extremely difficult to obtain funds through traditional means, such as a bank loan, for example.
Thus, the angel investor gains a minority stake in the company and, despite not having an executive position and not being the one who makes the decisions , acts as a mentor for these businesses that, in his view, have great potential. Thus, according to Professor Cohen, the main objective of this professional is: "investment diversification seeking high returns".
It is also worth remembering what characterizes a Startup. The angel investor seeks results and only invests in this type of company because he sees an opportunity for enormous rewards:
StartUps Checklist Infographic
How is the investment made?
When a startup is looking for an angel investor, the question remains: how to value these companies? This is a very controversial subject because the traditional way of valuing a business does not apply to organizations in such an uncertain context and with an extremely short lifespan. The professor explains that, in practice, the value ends up being defined through negotiation.
However, he emphasizes that angel investors take into consideration some essential elements to determine whether they will invest in a Startup or not. They are:
What problem does the Startup want to solve, how relevant is it and for whom?
Is the proposed solution truly innovative and does it actually solve the problem?
Business validation ;
The size of the market and who the competitors are;
Is the business model scalable ?;
The team ’s ability, attitude and ethics ;
Contribution and investment conditions required by the Startup.
Brazilian scenario for angel investment
According to the Angels of Brazil Entity , R$1 of angel investment generates R$5.84 in the economy, leading to an increase in GDP. "It is extremely interesting to stimulate investment in Startups, innovation and new businesses", highlights the professor. This is a sector that has been growing more and more in the Brazilian context, but it is still small if we take into account the country's potential.
According to the entity, it is estimated that there are currently 9,000 angel investors in Brazil, while in the United States there are 323,000. Furthermore, it is estimated that this activity has the potential to generate R$12 billion for the Brazilian economy, 11 times more than what is currently generated. "It is normal that it is still somewhat outdated here, but this just shows that there is investment potential in Brazil," Cohen emphasizes.
In an exclusive class for LIT students, Saint Paul Business School professor, director of the Leading Digital Reinvention program and co-founder of Poli Angels, Cláudio Cohen , spoke about what angel investment is, how it works and its position in the current Brazilian scenario.
Understand the main characteristics of angel investment
After all, what is angel investing?
In general, it can be said that angel investment is that colombia whatsapp data made by a person or group in high-risk businesses, whose success has not yet been proven. In other words, angel investors support entrepreneurs in the initial phase of their startups , a time when it would be extremely difficult to obtain funds through traditional means, such as a bank loan, for example.
Thus, the angel investor gains a minority stake in the company and, despite not having an executive position and not being the one who makes the decisions , acts as a mentor for these businesses that, in his view, have great potential. Thus, according to Professor Cohen, the main objective of this professional is: "investment diversification seeking high returns".
It is also worth remembering what characterizes a Startup. The angel investor seeks results and only invests in this type of company because he sees an opportunity for enormous rewards:
StartUps Checklist Infographic
How is the investment made?
When a startup is looking for an angel investor, the question remains: how to value these companies? This is a very controversial subject because the traditional way of valuing a business does not apply to organizations in such an uncertain context and with an extremely short lifespan. The professor explains that, in practice, the value ends up being defined through negotiation.
However, he emphasizes that angel investors take into consideration some essential elements to determine whether they will invest in a Startup or not. They are:
What problem does the Startup want to solve, how relevant is it and for whom?
Is the proposed solution truly innovative and does it actually solve the problem?
Business validation ;
The size of the market and who the competitors are;
Is the business model scalable ?;
The team ’s ability, attitude and ethics ;
Contribution and investment conditions required by the Startup.
Brazilian scenario for angel investment
According to the Angels of Brazil Entity , R$1 of angel investment generates R$5.84 in the economy, leading to an increase in GDP. "It is extremely interesting to stimulate investment in Startups, innovation and new businesses", highlights the professor. This is a sector that has been growing more and more in the Brazilian context, but it is still small if we take into account the country's potential.
According to the entity, it is estimated that there are currently 9,000 angel investors in Brazil, while in the United States there are 323,000. Furthermore, it is estimated that this activity has the potential to generate R$12 billion for the Brazilian economy, 11 times more than what is currently generated. "It is normal that it is still somewhat outdated here, but this just shows that there is investment potential in Brazil," Cohen emphasizes.