Angel Investing: From Basics to Becoming a Solo GP

Part 1 - Basics and Becoming an Accredited Investor

Part 2 - Angel Investing: Starting Your Journey

Part 3 - Angel Investing: How much to Invest

Part 4 - Angel Investing: Evolving Roles

Part 5 - Angel Investing: Finding Deals and Adding Value

Part 6 - Angel Investing: Scaling Up

Angel investing refers to individuals investing their own money into early-stage startups in exchange for equity (ownership) or convertible debt. Angels provide crucial seed capital to founders at the earliest stages, often well before traditional venture capital funds step in. In return, angels hope to earn outsized returns if the startup grows and succeeds – but they also face high risks, as many startups fail.

Why be an angel investor? Angels not only seek financial returns but often enjoy mentoring founders, staying on the cutting edge of innovation, and contributing to the startup ecosystem. Many angels are experienced entrepreneurs or tech operators themselves who “understand how difficult it is to start a business” and want to give back by helping new founders. Being an angel can be highly rewarding personally, but it’s not for the faint of heart – it requires patience, risk tolerance, and a long-term outlook (exits can take 5-10+ years).

Accredited investor basics: In the U.S., most startup investments are legally limited to accredited investors. An accredited investor is basically someone with high income, net worth or sophisticated enough that regulators deem they can handle the risks of private investments. You do not need any special certificate or license – it’s about meeting certain financial criteria. Generally, to qualify as accredited in the U.S., you must meet at least one of these conditions:

• Income: Earn over $200,000 annually (or $300,000 jointly with spouse) in the last two years, with expectation of the same this year
  

• Net worth: Have over $1 million in net assets (excluding your primary home)
  

• Professional credentials: Hold certain financial licenses (like a Series 7, 65, or 82) or be a “knowledgeable employee” of a private fund
  

• Insider status: Directors or executives of the company raising money are also considered accredited for that specific investment
  

If you’re outside the U.S., similar concepts exist (often called sophisticated or qualified investors), with local regulations defining who can invest in private deals. Always check your country’s rules. For example, Singapore and Dubai have their own accredited investor thresholds, and India has certain investor eligibility norms for startup funding.

How to become accredited?