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Wanted: More Startups And More Savvy Angel Investors

via Forbes : Angel investors provide the fuel — the capital — that promising startups need to scale. Fewer than 5% of people who qualify as an accredited investor, aka wealthy person, become an angel investor. Some angels do more than hand over a check. Realizing that both financial and human capital are key to helping a high-potential startup succeed, these angels roll up their sleeves and provide introductions to customers, key employees, vendors and other funders. They also may mentor founders and provide advice.

The overall state of the angel market

“The angel market is in a bit of a retreat,” said Alicia Syrett, founder and CEO of Pantegrion Capital, an angel investment vehicle focused on seed and early-stage investments. She is on the board of New York Angels and a CNBC contributor. Angel dollars invested from 2013 to 2015 range from $24.1 billion to $24.8 per year, which was near peak levels, according to the Center for Venture Research (CVR). In 2016, invested dollars dipped to $21.3 billion. “Valuations were frothy,” she explained. Some angels stayed on the sidelines, while others invested less per deal.

Still others, after not being successful at making their first investment, don’t try again, explained Brian Cohen, chairmen of New York Angels, entrepreneur and author of What Every Angel Investor Wants You to Know: An Insider Reveals How to Get Smart Funding for Your Billion Dollar Idea. “Angel investing is hard work,” he continued.

Unfortunately, people are more likely to invest in founders who are like them and the strongest similarity people see is gender. Men invest in men.

But women are now in what was once a man’s game. In 2016, more than one in four angels were women — 26%. The percentage of angels who are women has more than doubled since 2011 when it was only 12%. This is a reflection of women’s growing wealth and their interest in making an impact, which includes investing in other women and solving the world’s most pressing problems.

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