Angel investors are the first line of support for new entrepreneurs. Most angels are entrepreneurs or successful business people. Almost all are motivated by a desire to be around other entrepreneurs and to aid in their success. Angels typically enjoy mentoring and opening their networks to new founders. Successful startup communities have lots of angel investors who are visible and accessible. Their visibility gives new founders a sense that success is possible; and founder-angel contacts lead to investment of time (knowledge sharing) and (ultimately) money. If there aren’t enough angels, ambitious founders in Upstate communities will continue to strike out for major metro areas in search of the mentoring and financial support needed for success.
Angel investors face a choice—invest individually or with a fund. Individual investing is an option for people with lots of capital, personal experience with VC financing and/or ability to piggyback on investments with more knowledgeable friends. This is the dominant mode for startup communities that have lots of VC money and angels with deep experience in high growth industries. In contrast, the best path for Upstate angels is to participate in a fund. Angel funds enable investors to learn from each other, manage risk through smaller initial commitments, and build a bigger, more diversified portfolio. Beyond getting better financial returns, joining a fund puts you in contact with other like minded individuals in your area who share a common goal of working together to make a difference in helping the next generation entrepreneurs and new companies. Significant personal relationships form and the social side of angel investing in a fund is not to be overlooked.