Angel investing has long held an allure for those looking to get on the ground floor of a growing company and build wealth. After all, everyone wants a bite of the next Apple, and that opportunity could be right around the corner. Does that sound unlikely? With the innovation offered by venture capital mediums, Justin Darcy believes that possibility isn’t as far-fetched as you may think.
Justin, a Strategic ISV & Channel Alliances at Salesforce, is a seasoned investor, having invested in companies such as Meldium (acquired by LogMein), Screenhero (acquired by Slack), Mobileworks, Moveloot, Bloomthat, InDinero, Wundercar, and many others. He readily admits that traditional angel investing isn’t for everyone and isn’t totally accessible to most investors. He has found an alternate method: venture capitalist mediums like AngelList and FundersClub. Companies like these are changing the rules by bringing the power of crowdfunding to angel investing.
Traditional Angel Investing Isn’t Accessible
Justin found that the traditional method of angel investing didn’t work for him and certainly doesn’t work for the average would-be investor. This age-old system is usually only available to wealthy individuals and companies—or people with connections to them.
According to Investopedia, and angel investor is someone who “provides financial backing for small startups or entrepreneurs . . . . The capital they provide can be a one-time injection of seed money or ongoing support to carry the company through difficult times.” Carrying an entire company during hard times can be pretty expensive, though. And if the company goes under, the investors completely lose their investment. There is only a small percentage of would-be investors who have the time to properly vet and find the right investment, let alone amass the amount of capital required to make it worth the effort.
AngelList and FundersClub Are Changing the Rules
Rather than wait until he accumulated the net worth of the average venture capitalist, Justin sought an innovative and financially responsible way to get involved with startups and other projects that interested him. Companies like AngelList and FundersClub are bringing new ideas like crowdfunding to the table, and that is changing the game for angel investing.