How to Angel Invest
By yinglant, eHow Member 
Rate: (2 Ratings)
An angel investor or angel is an affluent individual who provides capital for a business start-up, usually in exchange for convertible debt or ownership equity. A small but increasing number of angel investors organize themselves into angel groups or angel networks to share research and pool their investment capital.
Instructions
Difficulty: Moderately Challenging
Things You'll Need:
- Seed capital (typically $1m and above)
- Relevant sector / startup experience a plus
Step1
Choose the right sector. Most believes that angels invest in good people and ideas . The reality is that they invest in good industries – industries which are more competitively forgiving than the whole market as a whole. Step2
Focus on deal-sourcing. If you see 10 companies a year and invest in one company, you are unlikely to be successful. If you see 1000 companies and invest in one, the chances of finding the winner is much higher. Step3
Do good deals. The returns to early-stage investments are largely binary. It is either a hit or not. Instead of investing in an undervalued deal which has a lower potential to be a winner, focus on investing in and increasing the likelihood of success of a high potential company. Step4
Build relationships as core assets. Build relationships that generate deals and then to help the companies in which we have invested. 
