| With a turbulent stock market and a real estate | | | | could be 2, 3, or 4 years in the future. You can't |
| market in serious decline, it definitely makes sense to | | | | simply log onto your investment account and put in a |
| seek out alternative investments. One possibility that | | | | "sell" order as you can with a publicly traded security. |
| many wealthy individuals overlook is making | | | | The upside potential is extremely attractive, |
| investments in private equity. This simply means | | | | however. It's not unusual for angel investors to earn |
| investing in a company that is privately held rather | | | | a 50% compounded return on their money. And |
| than in a public company that offers its stock to the | | | | angels also get the satisfaction of watching a small, |
| public over a stock exchange. People who make | | | | unknown company become large and successful-and |
| these sorts of investments are sometimes referred | | | | knowing they contributed to its success. |
| to as "angels," a term that originated in show | | | | Angel investing is definitely an activity for high net |
| business, to describe individuals who provided financial | | | | worth individuals. Although the amount of investment |
| backing for theatrical productions. It is now widely | | | | in any one deal varies widely, it is quite high, |
| used to describe an investment in any business | | | | $20,000-$100,000 or more. The average investment |
| venture, particularly start-up companies. Many of | | | | in a single company by an angel is $78,000. |
| today's most successful technology companies | | | | How do you get started in angel investing? There are |
| received their initial capital from wealthy individuals. | | | | angel investor organizations, called angel networks, in |
| An angel investor is sometimes called an accredited | | | | many cities in the US, and not just in traditional |
| investor. That is defined as an individual who has a | | | | centers of venture capital investment such as the |
| net worth of at least a million dollars not including the | | | | San Francisco bay area, or Boston. Joining one of |
| value of their residence. | | | | these and attending their monthly meetings is a good |
| Angel investing is riskier than investing in public | | | | way to see how angel investments are made. The |
| companies because many times the companies | | | | investment can be made as a group to spread the |
| seeking capital are early stage enterprises without | | | | risk or on an individual basis, each angel conducting |
| significant cash flow or earnings, and it is difficult to | | | | their own due diligence and deciding whether to |
| predict how profitable the company is going to be. A | | | | invest or how much to invest. By becoming part of |
| significant number of early stage enterprises fail, so | | | | an angel group, it allows you to network with other |
| there is a very real possibility in any investment of | | | | angels and learn from their experience. To find an |
| this type that you will lose all of the capital you | | | | angel group in your area, contact your local chamber |
| invested. The other significant element of risk is | | | | of commerce, entrepreneur organization, or small |
| liquidity: private equity investments typically must be | | | | business development center. You could also contact |
| held until the company is sold or goes public, which | | | | the business editor of your local newspaper. |