Angel Investors From UK & USA

Angel investors are usually individuals with high net worth who invest in startups or independent entrepreneurs in order to provide financial backing to them. This is prima facie done in exchange for ownership equity or convertible debt. These angel investors most of the time invest in these startups when they are at the verge of failing or in the starting when capital is needed in order to kick start the company or keep it running, this is mostly a one-time investment. Their modus operandi of investment is usually through equity crowdfunding and through sharing investment capital by putting themselves into angel groups or networks and also by giving advice to their portfolio companies. Angel investors for startups are also known as private investors, seed investors, angel funders, informal investors, or business angels.

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Angel investments are mostly one time and aim at assisting the take-off of a startup. The number of angel investors has increased over the years especially in India. According to research on the Indian Angel Network which is the country’s largest angel network, it has come to light that more than 20% of their total investors reside abroad. Foreigners are aware of the fact that India is a developing country that is growing at a high rate and therefore is a very vibrant place for investment and similarly startups are the ‘avant-garde’ of this new India and therefore has the scope of innovation, experimentation and accommodation. To support the growing number of startups in the country, there are a number of angel investors and platforms that are a part of Angel Investors India Network. 

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These angel investors may belong to any country and India receives investments from countries all over the world and UK and USA are very actively investing in India. They have access to many deals in accordance with angel groups like ‘Lets Venture’ and ‘IAN’ these are the major platforms used by them in order to invest in Indian startups.

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The process of angel investments start from:

1. researching about the potential angel investors- researching happens from both ends, startups search for the potential angel investors who want to invest in their area of growth and angel- investors usually search for startups how are trying to venture into a new arena because startups are the major source of experimentation and innovation and therefore they look for new interesting opportunities to invest in.

2. making you pitch- this pitch is called the ‘elevator pitch, it is a presentation done by the entrepreneur/ startup for the networking company in order to propose their plan of action or idea. This pitch is then reviewed by the secretariat. This presentation or elevator pitch is the most important phenomenon because it brings forward the plan of action and this is the basis for the investors to select a particular startup for investment. This pitch should include in a detailed summary of the business plan and other aspects like the objective and area of the startup, its value proposition, funding requirement, details of the team etc.

3. funds in exchange of equity- the funds provided by the investor is usually in exchange for ownership equity or convertible debt and the terms of exchange are then discussed at this stage.

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There also goes through a legal process in order to an angel- investment in India:

1. NDA- Non-Disclosure Agreement- both the parties have to sign an NDA in order to maintain the exclusivity of the pitch.

2. Company Valuation by CA- it should be ensured that the company’s valuation has been done by a certified charted accountant company in order to ascertain the true equity value of that company which will help decided the price per share of the company. 

3. Due Diligence- it is an investigative step in order to review all documents pertaining to the company for investment which is done to evaluate the future potential of the company in the market.

4. Subscription or Loan Agreement

• Subscription Agreement

• Loan Agreement

5. Shareholder’s agreement

6. Investment Terms & Negotiations in the Term sheet

• Liquidation Preferences

• Warrants Coverage

• Conversion Rights

• Automatic Conversion

• Anti-Dilution Rights

• Redemption Rights

• Voting Rights

• Dividends

• Board Participation

• D&O Insurance

• Pre-emptive/pro-rata rights

• Information Rights

• Expiration of Letter

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Indian startups are attracting investments for USA and UK Blume Ventures being the most active investor and others including New York’s tiger global management. United States has seen 800 equity deals with Indian startups after 2012 and is leading in investing in startups followed by Hongkong and UK. It is the second most active foreign investing nation in the Indian ecosystem.

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The UK on the other hand is rapidly growing its investing market. The UK-India startup launchpad was launched during the TechX change that happened in September 2019 which enables the startups, investors, entrepreneurs and incubators belonging to both countries to connect with one another and also provides resources in order to expand and globalize. It has been given immense support by the government of both countries. In 2015 in a joint announcement by the government’s of the UK and India a fast track system was launched in order to rectify a problem faced by UK based company in India. {This Article briefs on - angel investors, angel investors for startups, angel investors india, angel investors uk, angel investors usa} 

Angel investing is a fast-growing market and an easy one at that enabling investors from all across the world to invest in Indian startups which bears profit for the company, the investors and helps boost the Indian economy.

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