An angel investor used to be defined as someone with a high net worth. They typically have more than $1 million and privately invest money in startup businesses that are seeking capital. The SEC restricts investing in private deals to mostly accredited investors. I say mostly because there are some opportunities for non-accredited investors to participate on a limited basis. The definition of an accredited investor in the U.S. is a person who either has a net worth (excluding a primary residence) of $1 million, an income of $200,000 per year for the last two years, or $300,000 in household income per year for the last two years.
Angel investing has gained a lot of popularity despite anxieties over the bubble bursting. You need to understand what you are getting into before making that first investment. The general rule is that you shouldn’t invest more than 10% of your net worth, since startups can be risky. Investments typically range from $25K to $250K, but with startups needing less capital to launch these days, the amounts are shrinking.
To read the full, original article click on this link: 6 Important Tips for First-Time Startup Investors
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