Angel investments in start-up businesses have enormous business risk but this normal risk can be mitigated using diversification techniques. Angel investors enjoy many benefits including active management using legal insider information resulting in much higher expected returns including adequate diversification. Start-up businesses with disruptive ideas have dissimilar price movement to almost everything in the world and make available a HIGH impact investment opportunity where clients of advisors will know they are doing well while doing good. There is also the great personal gratification of being at the foundation of something that will change what is normal in business and where your skills and experience are valuable as a consultant or advisor to the CEO. It is of no small consequence that Section 1202 offers angel investors a way to qualify for tax free gains at exit, which can make it the most tax-efficient, investment category available. Active angels truly utilize all their experience and skills while being intimately involved in each business deal. Average returns reported for this class of investments exceed 2X what is normally expected in the public stock market.
