11 angel investing lessons

Venture Hacks

Spearhead asked me to write a post on angel investing when they first launched. Charlie Munger says investing requires a latticework of mental models. Here are 11 lessons for your angel investing lattice: If you can’t decide, the answer is no. Investing takes years to learn, but improves for a lifetime. Invest only in technology. Incentives make for bad investing advice. If you can’t decide on an investment, the answer is no.

Timing Is Everything: Angel Investing Success

The Seraf Compass

Ask a great investor what factors are most critical in his/her success in selecting investments and you will probably hear some variation on the following list: Great Team, Great Idea, Huge Market Opportunity, and Innovative Business Model.

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Angel Investing in Challenging Times

The Seraf Compass

It’s amazing how the world economic situation changed seemingly overnight with Covid-19. One moment we were enjoying a healthy economy with a robust outlook on the future. Suddenly, a pandemic crisis sweeps over the globe creating uncertainty in all aspects of our lives. We’ve been through economic downturns before, yet this time it feels different. Being forced to live in a world of “social distancing” has changed people’s psychology because it has altered everything about our day-to-day world

Key Risks of Angel Investing

The Seraf Compass

? Early stage investing is an inherently risky way to invest. As angel investors, you need to be aware of the key risks you are taking with your investment The list of high level risks is long and includes financing risk, technical risk, and market risk.

Angel Investing War Stories: Roller Coaster Rides and Lessons Learned

The Seraf Compass

One of the best parts about angel investing is all the great stories you gather over the years. Whether regaling your friends over a drink at the bar, or telling your grandkids about the time you invested in (insert name of very successful company here), angel investing will provide you with a wealth of experiences

How to Apply the 3 P's to Selecting Angel Investments

The Seraf Compass

The first approach we recommend for selecting investable companies is to screen each company by examining the Team, Market Opportunity and Product. But for serious angels with more solid prospects than they can possibly invest in, a second filter is needed That’s a great way to sift through hundreds of companies to find the few diamonds in the rough.

Rule #1 in Angel Investing - It’s All About the Team

The Seraf Compass

Great ideas are a dime a dozen. Living in the Boston/Cambridge area, we are surrounded by some of the most innovative researchers in the world working at institutions like MIT and Harvard. I’m pretty confident when I say, in Boston, hardly a day goes by when some graduate student or professor doesn’t invent a new product, discover a new molecule or create a cool app. Unfortunately, without a great team behind that new product, it’s doubtful that a great company will result

Look Before You Leap - The Importance of Due Diligence In Angel Investing

The Seraf Compass

? There are as many different approaches to angel investing as there are investors. Some investors will tell you they invest based on their gut. They like to invest in people and that initial meeting guides their decision-making process After a 30 minute meeting with the entrepreneur, they are either in or out.

Angel Investing: Skill 3 – Relationships with VCs

Both Sides of the Table

This is the third article in a series on what it takes to be a great angel investor (and why this should matter to entrepreneurs). I’d rather be Roger Ehrenberg with a thesis around data-centric companies and base my investment decisions on the skills I’ve developed in my career. But while I prefer a certain naive optimism in founders I can’t see the logic that this extends to angel investors. We’re back in the “feel good angel&# phase.

Angel Investing Skill 2 – Domain Knowledge

Both Sides of the Table

This is the second article in a series on what it takes to be a great angel investor (and why this should matter to entrepreneurs). And we all know that Ron Conway is considered the savviest of angel investors and yet by definition not all of his investments succeed. I like to invest where I have a personally strong connection with the entrepreneur and/or a strong intuition on the market from prior experience. Who ultimately invested in FourSquare?

Five Ways Angel Investing Gave Me Wings

Angel Capital Association

Marry that experience with a desire to grow my personal wealth while investing in entrepreneurial businesses, particularly those that are women-owned and women-led, and you have the wind beneath angel investing wings. Angel investors provide capital for business start-ups, usually in exchange for ownership equity. While venture funding and angel funding are on the rise, only seven percent of venture capital funding goes to women-owned businesses.

Paper Chase - Tips and Hacks For Dealing with Angel Investing Paperwork and Communications

The Seraf Compass

Before Christopher joined the world of angel investing, he spent much of his early career as a corporate lawyer working in-house for a NASDAQ listed enterprise software company. As a prolific angel, he adapts those organizational skills to tame the massive amount of paperwork associated with the large portfolios he manages.

"Money is Local, Impact is Global" for Angel Investing

Onevest

By Michael "Luni" Libes In the traditional world of early stage, Angel and VC investing, money is local. Studies show that over 80% of funding at Angel groups and Series A VCs goes to businesses in the same city/region as the funders. Over in the impact investing space, this rule is not true. Instead, we see groups like the Element8 Angels in Seattle funding deals across the country, and syndicating deals with other Angel groups in other cities.

What Angel Investing & Florida Condos Have in Common

Both Sides of the Table

The dinner parties now are filled with self-righteous angel investors bragging about how many deals they are in on. They have marked-up paper gains propped up by an over excited venture capital market that has validated their investments. Logic tells me the following: It is hard to make money angel investing. The best angels will do very well just at the best real estate investors did well in good times and bad. It was an investment management class.

3 Reasons Angels Invest in Deep Tech

propel(x)

It aims to increase the amount of meaningful innovations brought to the investing marketplace. In a culture where new apps are born hourly and crowdsourcing has made entry into the investing space easier, deep technology startups can offer serious investors a means of distinguishing themselves from the herd. Aside from elevating the content of their investment portfolios, there are other reasons why an increasing number of investors are flocking to the deep technology sector.

Angel Investing – The Most Underrated Skill: Access to Buyers

Both Sides of the Table

article in a series on what it takes to be a great angel investor (and why this should matter to entrepreneurs). I’m obviously only naming a small fraction of their investments since I don’t feel inclined to research them all and many other great venture firms have this kind of access. It’s hard for me to imagine that angel investing outcomes judged 10 years from now will have a drastically different profile. And as with VCs the same goes with angels.

Angel Investing: Skill 3 – Relationships with VCs

Both Sides of the Table

This is the third article in a series on what it takes to be a great angel investor (and why this should matter to entrepreneurs). I’d rather be Roger Ehrenberg with a thesis around data-centric companies and base my investment decisions on my background. I should say that I agree that naive optimism in entrepreneurs can produce higher beta (upside or flops) and that’s good from an investment standpoint if you’re looking for big returns.

5 Good Reasons Not to Seek Angel Investment

Gust

Assume you have the right factors to get angel investment: experienced team, good product-market fit, growth potential, defensibility, and a reasonable shot at a successful exit. This might seem awkward on this site, suggesting that you don’t want angel investment. But angel investment isn’t for everybody. So then, why not angel investment? Having investment makes you visible, in a spotlight. Investment increases risk.

Angel Investing (1): Dealflow – Are You Sitting at The Right Poker Table?

Both Sides of the Table

I believe the rise in angel investing is here to stay and the professionalization of this class (aka “super angels&# or “micro VC&# ) is a good thing for the VC industry and for entrepreneurs. But I fear that for most angel investors who invest over the long haul angel investing will not be a profitable endeavor. It got me thinking about how in poker and in investing there are usually a few pro’s at the table and many suckers.

Angel Investing 4 – Why You Need Deep Pockets to Win Big

Both Sides of the Table

This is the fourth article in a series on what it takes to be a great angel investor (and why this should matter to entrepreneurs). The first three skills I espoused were: access to the highest-quality deal-flow, domain knowledge of the topic area in which you’re investing and access to VCs to help fund the next stages of development. Markets like these are very kind to angel investors because you get taken out early and see a nice pop on your investment.

New Board Members Elected at Annual Member Meeting During ACA 2020 – The Summit of Angel Investing

Angel Capital Association

By: Emily Angold, ACA Marketing Manager Three new board members were elected at the ACA Annual Members’ Meeting during ACA 2020 – The Summit of Angel Investing held virtually May 12-14, 2020. The Board of Directors focuses on supporting the success of angel investors through industry voice, professional development and public policy advocacy while maintaining the mission and values of the Angel Capital Association. Linda Smith , Sierra Angels, former ACA Board Chair.

Which angel investing journals are the most useful, either online or in print?

Gust

There are actually no angel investing ‘journals’ per se, because there simply are not enough active, professional angel investors to make a market. There are, however, quite a few blog posts on the subject, although most are written for an entrepreneurial audience, rather than angels themselves. One good place to start would be with Bill Payne’s book The Definitive Guide to Raising Money from Angels. Good luck with your investing!

500’s Past & Present: Betting on International Startups

500

All Announcements Diversity Venture Capital Investing 500 Startups 500strong angel investing international founders Investing Investors southeast asia venture capital venture capital venture capital investingIn 2010, 500 Startups started as a new kind of venture capital firm in Silicon Valley with a contrarian belief that talent can come from anywhere in the world.

7 Reasons Why Angel Investing Became Serious Finance (Inc. Column)

Scratch Paper

Magazine devoted to the topic of de-mystifying angels and the early-stage investing process. My first piece was on the seismic forces which have slowly but profoundly re-shaped the early stage investing landscape. 7 Reasons Why Angel Investing Became Serious Finance. Discover the forces converging to make angel investment a serious source of capital for savvy, high-growth focused entrepreneurs. I’ve been contributing a column at Inc.

Reflection on Local Angel Investment From Inside Out

Gust

This is a good time to reflect on my experience with locally based angel investment. I just finished with the fourth of our annual angel investment event for my local group based in Eugene and Corvallis, Oregon. I’ve been an investing member since the group — the Willamette Angel Conference , nicknamed (ugh) the WAC — started. . We try to make our investments as convertible debt.

Which angel investing journals are the most useful, either online or in print?

Gust

There are actually no angel investing ‘journals’ per se, because there simply are not enough active, professional angel investors to make a market. There are, however, quite a few blog posts on the subject, although most are written for an entrepreneurial audience, rather than angels themselves. One good place to start would be with Bill Payne’s book The Definitive Guide to Raising Money from Angels. Good luck with your investing!

Angel Investors Do Make Money, Data Shows 2.5x Returns Overall

Gust

I began studying angel investing returns about 10 years ago as a result of a problem I couldn’t resolve: The investing world seemed certain that angel investors were rubes. Conventional wisdom dictated that they made reckless investments in very early-stage ventures mostly doomed to fail. Are angel investors just unwitting philanthropists or legitimate entrepreneurial investors? The best estimate of overall angel investor returns from this data is 2.5

Will Investing Move Online as WFH takes over?

propel(x)

And, conversely, investing. So will there be no investments made in that time? Investing for example, where we have unique perspective. Newton Fund, managed by Propel(x) Advisors (a Propel(x) subsidiary), has made most of its investments on the merits of the opportunity, based on phone calls or video conferences with founders. And, of course, the classic example is investments made by angel investors online on the Propel(x) platform.

Nuggets from our recent Angel Investment panel in Boston

Fred Destin

Jeff Fagnan , angel and venture capitalist, first money behind VentureHacks. the blurring of angel and venture. how the fundamental shift in velocity means traditional angel club methods are probably dead or in need of drastic evolution. Angel Investing Panel - Highlights - 201105 by fdestin. . Angel Investing - BoCoupAtlas Panel - 201105 by fdestin

Investors are Aiming for the Big Win, Not the Mean or Average

Gust

I tell those stories because angel investment is a hit business too. Statistics notwithstanding (my apologies to Rob Wiltbank, the world expert on angel investment statistics), it’s a business in which the rare big hit pays for all the failures. They know that only 1 of every 10 investments (or so) will be successful, so they need to believe each one has a chance to return 100 times or more the initial investment.

Preparing for the Inevitable: Angel Investors, Death & Taxes

The Seraf Compass

Things don’t always go exactly as planned in life or in angel investing. And just as in life, with angel investing, it pays to be prepared. So here are some thoughts on planning for the inevitable, and how to prevent catastrophes by fitting your angel investments into your estate plan from the beginning

3 Reasons Top Startup Investors Want More IP in Their Portfolios

propel(x)

Investor Brian Cohen, a part of the New York Angels and author of What Every Angel Investors Wants You to Know outlines eight questions when looking at potential companies to invest in. Managing IP diligently may take effort and investment, but it can be well worth it. When a company has strong IP, such as patents, in the market and has gone to correct lengths to protect it, it can make your investments potentially much less risky.

Do most angel investors make money?

Gust

The reality is that results in angel investing tend to bifurcate: “Professional” angel investors, who are investing calmly, steadily, relatively-rationally, over a long period of time and with a strong knowledge of both investment math and early stage realities, tend to not only make money, but do quite well: the average return for a comprehensive, well-managed angel portfolio is between 25% and 30% IRR.

Convertible Debt, Priced Equity Rounds and Deal Timing

Gust

Invested Interests angel investment convertible debt convertible note deal terms due diligence financials fundraising priced equity priced rounds tactics valuation valuations VCs venture capitalAn impromptu Twitter debate arose among Fred Wilson, Dave McClure, Mark Suster, Chris Dixon and others about convertible debt, priced equity rounds, and the nuances of early stage financing. It was such a good discussion that Fred asked that someone Storify it.

Trends in Seed Stage Funding for Entrepreneurs

Gust

I’ve recently taken a look at seed stage funding by venture capitalists (VCs) and angel investors over the past five years. Here are the trends in venture capital financings from 2006 through 2010 – the number of seed stage deals funded and total investment by region in millions of dollars. . VCs in NYC invested, on average, only $2.4 And, according to MoneyTree© for the first three quarters of 2011, the average invested in NYC Metro seed stage VC deals was even less.

The Funding Gap

Gust

Angel Investors. $20 Super Angels. It is clear from this table that Friends and Family, Angel Investors and Venture Capitalists provide 95% of the capital for new ventures. Friends and Family typically invest a few thousand to perhaps $10,000, and only a small number of investors provide more than $50,000. Angel investments range from $100,000 to $1.5 The figure below shows the number of investors by investment size for startup ventures.

Great Startups Can Hook an Investor in 60 Seconds

Gust

Power Pitches angel investment angel investors entrepreneurs entrepreneurship fundraising pitching startupsAn “ elevator pitch ” is a concise, well-practiced description of your startup and your plan, delivered with conviction and enthusiasm, that your mother should be able to understand in the time it would take to ride up an elevator. Everybody knows about these, but few people seem to deliver a good one.

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