Angel Investor
April 25th, 2009
Angel Investor
Great Tips Any Angel Investor Can Use
The AngelConf this year provided some great insights to angel investors. A great group of successful angel investors were the speakers at the conference and they imparted knowledge on other angel investors. Venture Blog shares the best of the advice that any angel investor would benefit from following:
- [My personal favorite]It’s a small community — if you screw one entrepreneur, you’ll be out of the angel business because entrepreneurs talk (Conway)
- Angel investing is about learning on the job, which means that you can plan on screwing up your first 10 deals at least (McClure)
- If you assume that the money is gone once you’ve invested it — that it is like a lottery ticket — then you will have a better time angel investing (Buchheit)
- Work with other angel investors so that you can get the advantage of their expertise (Zurich)
- There is no rational way to arrive at valuation, so don’t be overly concerned about getting it right (Graham)
- Don’t worry if the idea seems crazy — if it didn’t seem crazy, it would be too late to invest as an angel (Graham)
- The lifeblood of angel investors is deal flow — you need huge deal flow to find enough stuff that is worth investing in (Ravikant)
- The best deals come from other angels (Ravikant)
- Don’t be afraid to throw a little dynamite into the status quo and see what comes out of it — often times interesting stuff emerges (and sometimes nothing does) (Dearing)
- The Rule of 12 — you need to invest in 12 companies to have statistical diversity — invest in fewer than 12 deals and you run the risk of them all failing (Maples)
- Like in the movie “Oceans 11,” you want to pull together the best team of angel specialists there are out there — it increases the likelihood that the company will succeed (Maples)
- Help bring your entrepreneurs together so that they can learn from one another (Poler)
- * By being a connector, you will see the most interesting stuff and work with the most interesting people (Senkut)
- Angel investing is all about the syndicate — you can lead if you want to but it can be lonely until others join in the syndicate (Clavier)
- Angel investors need to distinguish themselves from others with money — what do you bring to the table? Contacts. Experience. Advice. (Young)
- Only invest in stuff you actually know something about — otherwise you’re just buying a lottery ticket (Young)
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