Angel Investing as a Path to Serving on Boards
“When we do an investment, we always ask, ‘Can we affect the outcome? When buying a company, can we have an impact?’ That’s a different style of investing than a passive investor in the stock market. To me, that’s how you’re taking the risk out of it. You know what your capability is and how you can enhance value.” – Dan Gilbert
After the last year and a half, many are re-evaluating how they want to make a tangible difference in the success of organizations they love and even in their local community, both financially and professionally. Some people are even redefining the types of organizations and leaders they choose to engage with and support. As individuals expand their desire to serve beyond their kids’ schools or HOA boards, an avenue to investing financial and human capital in a for-profit organization is becoming an angel investor.
Angel investing comes in various shapes and sizes and is risky. Angel investors, either an individual or a group of individuals, give their own financial resources to fund startups or business expansions in exchange for equity or ownership in the company. Additionally, angel investors may ask for a board position in their negotiation. According to the Angel Capital Association, around 300,000 people have made angel investments in the last two years within the United States. A way to bring maximum impact to a business, angel investing is the contribution of financial investment, skill sets, experience, and industry knowledge into the growth of an organization’s mission, technology, and ideas.
If you are thinking about angel investing to diversify your portfolio and as a meaningful way to give back, consider the following:
- Think about the small to medium-sized organizations in the community with missions or ideas that you deeply believe in, know you can affect the outcome positively, and have the resources to enhance value
- Evaluate whether the opportunity is within an industry you have expertise
- Determine how much energy you can give to being an angel investor from start to finish
- Discern whether you can truly afford to lose the investment or not
- Identify what you want from the experience – financial gain, professional fulfillment, or a blend of both
Becoming an angel investor is a substantial commitment of time, talent, and treasure. It is a commitment that could go terribly wrong. Or remarkably right.
Angel investing is a unique path to the board room and serving in a board capacity. If you are considering becoming an angel investor and wondering what type of company to invest in, please reach out to me. I am always willing to help and provide advice. Investing financially and professionally in the missions you believe in will be immeasurably rewarding…
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