On Being an Angel Investor

Have you heard about angel investing? 

I came to know about it when I joined pinoymoneytalk.com's forum. In the forum, you will get to know a lot of angel investors -  individuals who invest in start-up businesses in exchange for a higher return than would normally be found in traditional investments. Depending on the nature of their business,  proponents usually offer monthly interest ranging from 3% to 12% based on the amount of investments, which range from P30K to P700K or more. Sometimes, a group of angel investors pool their money to avail themselves of the higher interest rate.

The practice is that  the business proponent issues postdated checks depending on the term, which ranges from three months to two years, and a notarized agreement. Some proponents payout the capital at the end of the term while others combine the monthly interest and the prorate of the capital.

Like any other investments, there is a corresponding risk in this kind of venture. Sometimes, proponents may have a legitimate business but it is only a front so that they could accumulate investments with the hidden agenda of scamming their investors. No matter the due diligence conducted by prospective angel investors, they still fall prey to scammers sometimes. But then, there are genuine proponents who conduct their business with all integrity without any intention of scamming their angel investors.

If you want to try to be an angel investor, the best piece of advice is this: Invest only what you can afford to lose.  Truth is, angel investing could either be a boon or a bane.