Octav Moise Highlights Angel Investing Issues
Octav Moise is a renowned angel investor with a solid career in entrepreneurship. In a recent online discussion with his followers, he discussed the current problems that many angel investors face. Numerous business people look to emulate this type of investment. Unfortunately, they often face obstacles with seemingly no solutions.
Angel investing is the business practice of financing small businesses in exchange for equity. Generally, only wealthy, well-established investors can be angel investors. Also, only startups and under-development projects can approach this kind of funding. Only large capital investors can afford it, and only underfunded, struggling companies can apply for their financial help.
The first issue that many angel investors face is dealing with insecure investment proposals from under-performing businesses. For example, many companies do not have the necessary securities to apply for funding from a private investor. Still, they present overly optimistic financial forecasts tricking financiers into bankrolling them.
Usually, these poorly-secured ventures end badly for both parties. Firstly, the business fails to meet its goals, and its weak performance only creates more debt. Secondly, the angel investors cannot retrieve their loaned capital.
Unfortunately, this leads to them not being able to secure funds for other projects. As a result, they had laden their portfolios with companies and assets forever trading in the red. Meanwhile, other businesses which would thrive with angel investors’ funds never get to access them.
Octav Moise warns up-and-coming angel investors of these risky financial ventures. He confirms that vital details of a struggling business are in the fatally fine print most of the time. Therefore, he advises passing the documents through an army of expert lawyers before pouring any funds into a startup.
Investors may also have to deal with businesses using outdated technologies. On paper, a struggling business may look ripe for angel investment. Some inexperienced financiers may rush to fund a company trading on the breadline. However, they soon find out that the necessary investments in upgrading it technologically outweigh even the most optimistic returns.
Many angel funders had to deal with this problem in the early 2000s. Back then, many businesses were struggling because they could or would not upgrade to online technology. Some conservative companies did not believe that having an online presence mattered. Others invested measly sums into building a brand on the internet. Unknowingly, angel investors would fund projects operating like in the pre-internet era and lose capital trying to upgrade them.
Nowadays, wealthy financiers face a similar issue when trying to introduce companies to the blockchain and cryptocurrencies. Octav Moise has embraced these innovative technologies since their early beginnings. As an expert in the field, he urges angel investors to calculate the potential upgrading costs for struggling companies before investing.
Lastly, many investors face another issue: convincing businesses to approach compelling social problems. Many companies tend to focus only on their activity in the market. Also, they disregard what goes on in the world. However, this is a sure way of losing consumers, who nowadays demand brands to be socially aware.
Octav Moise has supported the Ukrainian cause from February 2022. He believes that more brands should invest more time and resources into this matter. Angel investors should also look for businesses actively participating in similar social causes. After all, we can only overcome globally-impacting problems if we work together for the greater good.
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