Angel Investor Advice
Angel investors are usually wealthy individuals with an eye for a special industry or niche investment areas. But becoming an angel investor is not easy and it involves a lot of risk. Brad Feld has some great advice to those aspiring to be angel investors, here is the abbreviated version:
1. Be promiscuous: To be a successful angel investor, you have to make a lot of investments.
2. Have a long term financial strategy: Early on I decided that I was going to write the same size initial check in every angel investment.
3. Understand the difference between 0x and 100x: I’ve had two of my angel investments return over 100x each. Since I had a strategy of investing the same amount in each company, all I needed was one 100x to allow me to have 99 companies completely flame out and return 0 and I’d still break even.
4. Choose people over ideas: I have never regretted making new friends through an angel investment that failed.
5. Decide quickly: My best investments as an angel were made after one meeting and I’ve often committed in the meeting.
6. Don’t torture entrepreneurs: Remember, you are supposed to be an “angel investor”, not a “devil investor.”
7. Run in a pack: The best angels run in packs. They share deals. They love to work together. They don’t feel obligated to invest in each others stuff, but they often do. And they communicate with each other. Source