Angel Investing 101: Risk, Returns, and the Real Value You Bring

Team LVX

If you’re curious about angel investing, here’s the first truth you should know: most startups fail. That’s not meant to scare you — it’s simply how the power law works. Out of ten startups you back, maybe one or two will really make you money. In fact, almost 90% of returns come from fewer than 20% of deals.

So how do you, as a beginner, make sense of this?

Public vs. Private Markets

When you invest in public markets, you have charts, ratios, and analyst reports. With early-stage startups? You don’t. The companies are too young, the data is too thin, and the trends aren’t obvious yet. That’s why angel investing is part science, part gut instinct.

How Much Do You Need?

Here’s some good news: you don’t need crores to start. You can begin with as little as ₹50,000.
Your first deals will likely come from people you already know — friends, alumni networks, or connections who are active angels. As you grow more confident, you can slowly increase your exposure — maybe 10% more each year.

How Much of Your Savings to Risk?

Discipline matters. Don’t put your entire nest egg at risk. A simple rule: keep angel investing to just 5–10% of your savings. And spread that across at least five startups. The more you diversify, the better you’ll understand patterns and improve as an investor.

Beyond Money: Why Founders Will Take Your Cheque

When you’re writing small cheques, you need to bring something extra to the table. Maybe you can help a founder with marketing, finance, hiring, or opening doors to customers. That value-add is what makes you stand out, even with a smaller investment.

The Bigger Picture

Here’s the mindset shift: angel investing isn’t just about chasing returns. It’s about building deep, lasting relationships with founders. It’s about going the extra mile and being someone they can count on. Over time, that’s where the real rewards — financial and personal — show up.