Building a startup can be as tough as “chain-sawing your way out of a great white shark’s stomach,” at least according to angel investor Dave McClure. Often it’s angel investors who are there to help entrepreneurs take those first steps out of the shark’s stomach.

Angel investors are a critical part of the startup ecosystem. They provide cash, make connections, and offer encouragement to help develop nascent ideas into actual businesses, or at least into a business that can attract funding from venture capitalist firms down the road. Angel investments are high risk — the odds of a positive return are less than 50 percent, and angels are often motivated by factors other than money (although this is, of course, a factor). They are often entrepreneurs and executives passionate about supporting the next generation of innovators.  A study conducted by researchers from Harvard and MIT found that angel-funded startups are significantly more likely to survive at least four years and raise additional financing.

Image Courtesy of Zuzzuillo / FreeDigitalPhotos.net

To read the original article: Angel investors put $20B a year into startups (infographic) | VentureBeat