Answers to the most commonly asked questions by prospective members.
What is Angel investing?
Angel investing is early stage investing in private companies. It generally is the funding sought after preliminary friends and family financing and before later-stage venture capital financing, at which point revenues, a customer base, distribution channels, etc. are more firmly established. Because of the early stage of the companies being financed, angel investing is very risky and typically illiquid for five to ten years.
Who are Angel investors?
Angel investors are accredited investors who allocate a portion of their total investment portfolio to various alternative investments. Within this asset class, angel investors provide emerging companies with seed capital through direct, private investments, typically in the form of preferred equity or convertible debt financing, with Fronesyz Angels preferring the former structure. Given the lower capital risk associated with publicly-traded equities, angel investors seek appropriately higher risk-adjusted returns from their private market investment. Most angels are active investors who contribute their time and experience, as well as offer introductions to valuable contacts essential to a company’s success, because they enjoy helping to define and reach milestones through the entrepreneur’s journey.
What if I do not make an investment during the year through Fronesyz Angels?
New York Angels are looking for active members. If you are not making investments or contributing to the growth of the group, then the Fronesyz Angels is not the right group for you.
In what dollar increments are Angel investments made?
Each member of Fronesyz Angels makes an independent investment decision on where and how much to invest. In general, angel investments are made in increments of $25,000. Fronesyz Angels expect all members to invest $50,000 a year in Fronesyz Angels deals.
How do I reduce the risk of Angel investing?
Angel investing by nature is a risky proposition. To mitigate the risk, we recommend doing thorough due diligence on every deal, and diversifying across a broad portfolio of angel investments.