What Is Angel Investing and How Can You Get Started?

Recently, I’ve been getting asked the same question over and over again when I explain some of the investing my communities and I take part in. So today I want to answer it for everyone in case you were one of the folks wondering, “What is angel investing?”

Because angel investing is one of the potentially most lucrative forms of investing in the history of the world. And thanks to modernized financial systems, it’s an avenue that’s open to more people than ever before…

What the Heck Is an Angel Investor — And Why Should You Care?

You’ve probably heard the term “angel investor” tossed around like it’s some exclusive club for high rollers. And you’re not entirely wrong.

Angel investors are like startup fairy godparents — minus the wings and glitter.

They’re often wealthy individuals who swoop in to fund businesses at their earliest (and riskiest) stages, hoping to turn their cash into a serious payday.

But don’t let the name fool you — these “angels” aren’t handing out charity. They’re betting big on innovation with the hopes of reaping even bigger rewards.

And if you’re wondering why this matters to you, whether you’re an aspiring entrepreneur or someone with money to invest, stick around. We’re about to break it all down.

Why “Angel” Investors?

The term has roots in Broadway theater…

Back in the day, wealthy patrons saved struggling productions by throwing money at them, giving them a shot at success.

The name stuck, and in the 1970s, it crossed over to the world of business, thanks to William Wetzel, a professor who noticed these early-stage saviors helping startups.

Much like their theatrical counterparts, today’s angel investors step in where banks or venture capital firms often won’t. Startups are risky, after all, and the majority fail.

But angel investors are willing to take that chance for two reasons: They believe in the business (or at least the potential payday), and they’ve got the financial cushion to handle a few losses.

Big Wins in Angel Investing

Let’s get to the fun part — the success stories. Angel investors have had some massive wins over the years by spotting potential before anyone else.

Amazon

In 1995, Jeff Bezos raised $1 million from 22 angel investors to get Amazon off the ground. Each investor contributed $50,000, receiving roughly 1% of the company. Fast-forward to today and Amazon is worth over $1.3 trillion. That initial $50,000 stake? It’s worth more than $12 billion, a return of 24,000,000%. Not bad for taking a gamble on an online bookstore.

Tesla

Back in 2004, a group of angel investors, including Elon Musk, invested $7.5 million to fund Tesla’s Series A round. At the time, electric vehicles seemed more sci-fi than realistic. Fast-forward two decades and Tesla is the most valuable car company in the world, with a market cap of over $800 billion. Early investors have seen returns in the range of 1,000x or more.

Uber

In 2009, angel investor Jason Calacanis was offered an opportunity to invest $25,000 in Uber’s seed round. That small investment turned into a whopping $125 million when Uber went public in 2019 — a jaw-dropping return of nearly 500,000%. Talk about a life-changing bet!

Airbnb

When Airbnb was just three guys renting out air mattresses in their living room, angel investor Brian Chesky believed in their vision. He put in $200,000, and when Airbnb went public in 2020, that investment was worth over $10 billion, an astronomical return of 5,000,000%.

What Do Angel Investors Look For?

Angel investors aren’t just tossing darts at a board. They’re methodical and strategic. Here’s what they look for:

1. Defined Exit Strategy: Whether it’s an IPO, acquisition, or some other exit, angels want to know how they’ll cash out — and when. A startup without a plan is a non-starter for them.
2. Acquisition Potential: Many successful startups are bought out by bigger fish. If a company has strong intellectual property, a killer team, and a growing customer base, it’s an attractive acquisition target.
3. Sky-High Growth: Angels know most startups won’t make it, so they swing for the fences. They want investments with potential returns of at least 10x in five years.

How Do Angels Mitigate Risk?

Angel investing isn’t all rainbows and record-breaking profits. Most startups fail. So angel investors need strategies to manage that risk:

1. Diversification: Smart angels invest in multiple startups, usually keeping it to 7%–15% of their portfolio. It’s a numbers game — the more bets, the higher the odds of hitting a big win.
2. High-Return Opportunities: Angels aim for companies with the potential for massive returns to offset losses. They know one big hit can make up for several misses.
3. Due Diligence: Before putting money on the line, angels dig deep into a company’s market, team, and financials. They want to know their chances before rolling the dice.

Why Should You Care?

If you’re a founder, angel investors might be your lifeline. Banks don’t love risky ideas, and venture capitalists want proven traction.

But angels? They’re willing to take a chance on your crazy dream — if it’s the right kind of crazy.

For investors, angel investing offers something unique: a chance to fund innovation at its earliest stages. Yes, it’s risky, but the rewards can be astronomical.

Think about it — $25,000 into Uber became $125 million. Even a fraction of that would be life-changing.

Up until recently, though, the world of angel investing was pretty much off-limits to nearly everyone by default.

You had to be a super-wealthy individual with a network of entrepreneurs. Or you had to be related to someone starting a business.

But thanks to legislation slipped into the JOBS Act back in the mid-2010s, that world is now open to anyone with an internet connection and a bank account (heck, even a cellphone and a credit card).

You see, there’s an entire universe of startup companies marketing themselves to potential investors out there. You just need to know where to look.

More importantly, though, you need to know what to look for. And that’s something I’ve learned over my career on Wall Street and running my own family office.

It’s also something I decided to offer to our retail investor community here at Wealth Daily and Angel Publishing.

And I do just that through my angel investing and venture capital investment community, Main Street Ventures.

It’s Time You Become an Angel, Too

We’re a community of like-minded investors. Some of us are accredited, but the vast majority are regular retail investors with a little more appetite for risk and a patient demeanor.

And so far, that risk appetite and patience has paid off, as we’ve successfully exited five investments…

One was a debt offering where we earned 51% interest over three years. Three were exciting IPOs. One was a public company we helped to finance at a discount to the market price.

And we’re about to exit a sixth this week as another of our private investments has an IPO and lists shares on the New York Stock Exchange!

It’s all incredibly exciting. But it’s also pretty profitable. And I want you to be a part of it…

Now couldn’t be a better time, either, because I’ve recently come across one of the most impressive investments of my career.

It’s a small private company that’s already contracted to help the U.S. military develop and defend against hypersonic weapons.

And it’s also got a segment that’s competing with Elon Musk’s SpaceX in the satellite launch market.

It’s potentially the biggest, most important investment my community or I have ever made. And it’s got the potential to return exponential gains for investors as things progress.

You can learn all about the company, its contracts, the markets it serves, and how you can get a stake in it BEFORE it goes public in this short presentation.

All I ask is that you join me and the thousands of other angel investors already profiting from this lucrative market in the Main Street Ventures community.

The Bottom Line on Angel Investing

Angel investing is not for the faint of heart, but it’s one of the most exciting ways to grow wealth while supporting the next generation of big ideas.

Whether you’re looking to become an angel or snag one for your startup, the opportunities are endless — if you know where to look.

So what’s it going to be, friend?

Are you ready to spread your wings? The other angels are waiting.