A Feasibility Study Of Angel Investment

Angel investment is a private investment to achieve capital appreciation. It is that individuals or families with a certain capital who do some early (and the general view is the Seed Stage and Early creation), direct, small amount of equity capital investment on SMEs which have tremendous and high potential for development, and also, the angels always assist the entrepreneurs with technical expertise and unique concept to launch their new enterprise. Meanwhile, the angels take the high-risk venture and enjoy high yields after the success of the enterprise. But instead of a similar between the angel investment and the venture capital there is a fundamental difference of each other. Overall, the definition of angel investment tends to be like a more secretive private capital and individual investment behavior, and it is always focus on the initial phase of enterprise development. In addition, angel investors also tend to have certain non-capital contribution to the enterprise. In the United States and other Western countries, angel investment market was considered as the most important source of risk capital for SMEs.The paper seeks to the perspective of theoretical analysis rather than most of domestic literatures from which are focus on the perspective of practical analysis to present and analyze of angel investment and explores the feasibility of its promotion in China. At last, the paper draws the conclusion that the angel investment is practicable in China. Finally, I made a preliminary design for the angel investment's implementation. Research ideas are as the following:Firstly, as angel investment is a relatively new subject in China, so I made a summary presentation of it in the beginning of the paper, and then make a clear definition of angel investment on the basis of extensive review of literature. At the end of the chapter one, the paper did a detailed briefing to transaction structure and the mechanism on the basis of angel investment's process and the operation model in the developed countries.Secondly, according to SMEs'important contribution to the national economy and development process, the paper analysis the financing preferences and financing structure of the SMEs in the present, and come to the conclusion that there are tremendous needs of equity capital in the initial stage and a greater demands of angel investment of the SMEs'start up.Thirdly, this paper analyzed the possibility of angel investment's promotion in China.At last, the paper designs a plan for the angel investment's promotion on the base of China's specific conditions. Begin with the current situation of angel investment in China; I made a quite detailed appraisal of the government actions, the organizations program of angel investment and the avoidance of possible moral hazard which may occur in the process of angel investment.