Angel Investment not only brings in funds but also an invaluable mentor to the business. In the light of this statement state any three features of angel investors.

Question

Accepted Answer

Three features of angel investors are:

1. **High Net Worth Individuals:** Most angel investors are current or retired executives, business owners, or high net worth individuals who have the knowledge, expertise, and funds that help start-ups match up to industry standards. They were humorously given the acronym FFF — Friends, Family, and Fools.

2. **High Return Expectation:** As angel investors bear extremely high risk and are usually subject to dilution from future investment rounds, they expect a very high return on investment. They invest in ventures with high growth potential.

3. **Proactive Mentoring and Guidance:** Apart from investing funds, most angels provide proactive advice, guidance, industry connections, and mentoring to start-ups in their early days. Their objective is to create great companies by providing value creation and simultaneously helping investors realize a high return on investments.