Arkangeles
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Today's edition is brought to you by Atomic 32 - transforming ideas into digital solutions.
For many years, access to alternative investments was reserved for high-net-worth individuals.
With new fintech laws, entrepreneurs are leveraging new ways to bridge this gap, reshaping investment opportunities for many.
Let's dive in.
Imagine this
As an investor with a typical portfolio featuring bonds, ETFs, and stocks, you decide to diversify your investments after saving up some money.
Interested in the startup world, you start to research about angel investing.
Quickly, you realize that there are significant barriers, such as access to the right people and high entry costs to secure good angel investment deals.
In your research, you come across Arkangeles, a crowdfunding platform that offers accessible angel investments.
Explain it like I'm five
Arkangeles is a crowdfunding platform that allows users to invest in early-stage startups based in Latam.
Investors can start their angel investing journey and diversify their portfolios with as little as 5,000 pesos.
Startup founders can raise money through crowdfunding, giving them access to a large investor audience.
Founder aims to educate the next generation of angel investors and provide opportunities for anyone looking to diversify their portfolio.
The ABCs
Industries: Fintech, Alternative Investments
Headquarters: Mexico City, Mexico
Year Operations Started: 2018
Team Size: 8
Raised: US $2.3M Pre-seed
Investors: Undisclosed
Business Model: Placement Fee (8%), VC Traditional Business Model
Other players:
Background check
What we like:
Client Base: According to the founder, on average, each angel investor invests in 3.5 startups, and their growth has been organic. They have over 800 active angel investors and have listed approximately 95 startups on their platform. Among them are some popular names like Albo, Vexi, BauApp, Finerio, Truora, Cincel, and Ubits.
Courses: Since angel investing is a term that is rare in Mexico, Arkangeles also offers educational courses on its platform. This creates an additional revenue stream for them and helps people better understand how investing in startups works. Additionally, they have established partnerships with TEC (Tecnológico de Monterrey) and TechStars (Global Accelerator).”
Due diligence: The founder claims their due diligence team thoroughly researches all the startups and investors they list on the platform. They also collaborate with top VCs in the region, including 500 Latam, Mass Challenge, Pygma, and Cube Ventures. Arkangeles decides to onboard a new startup and is in charge of doing the due diligence. The same goes for onboarding a new investor, as a KYC (Know Your Customer) is mandatory.
Alternative assets: Inflation is growing by the second, and as a result, some investors are exploring alternative assets with the potential for substantial returns bigger than the S&P500 or similar investments. Angel investing is an appealing option for those looking to diversify their investment portfolios and are looking for a bigger potential return.
Roadblocks:
Liquidity: Liquidity is a significant concern for investors, as their investments are often illiquid. Investors must seek a willing buyer prepared to pay the determined price, which can lead to long negotiations and, ultimately, a lower valuation. In many cases, startups need an exit strategy, such as being acquired by another company, going public through an IPO, or raising another funding round for investors to sell their stocks and see a return.
Economic conditions: If the market is down, interest rates are up, and inflation is up, fewer people will be inclined to invest in early-stage startups. Their user activity comes in correlation with economic conditions that are beyond Arkangele's control.
Trust: People may be hesitant to invest in startups. Over the years, we have witnessed numerous instances of fraud in startup investments, and this is not a new phenomenon. When considering investments in startups, it's crucial to be fully aware of the associated risks. Arkangeles must have a reliable team and reputation to maintain credibility. As well they must also have a strong legal structure for crowdfunding investments.
Quality startups: Arkangeles should maintain a strong track record and feature high-quality startups on their platform. If an investor visits their website and doesn't find compelling startups with good potential, they are less likely to invest.
Consistency: Some can argue that investing in startups is a numbers game. You invest in 10 startups, and out of those, nine may fail while one succeeds, and one success can make up the losses incurred by the others. However, the challenge lies in maintaining both the consistency and capital needed to keep investing, as some individuals might become discouraged and give up after their initial investments in the first 3-4 startups fail.
The Architect
Luis Barrios, Founder & CEO, Previously @ Mercado Bitcoin.
Request intro with the founder by sending an email to gabriel@readrunway.com
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Headlines Corner
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