Welcome
This notion summarizes the key take-aways about everything I've read on Angel Investing. It includes small snippets of knowledge from over 30 sources including advice from some of the most successful investors like Jason Calacanis, Naval Ravikant and David S. Rose.
It should give you a first overview on:
- what angel Investing is,
- why people invest as angels,
- and how they do it.
Use the Menu on the right, to get your questions answered quickly or just explore by scrolling through the feed. Enjoy!
What is angel investing?
In short: Angels are private persons that invest their own money in start-ups. In return, they receive equity - a share of the company - they invest in.
The motivation for start-ups: Start-ups are very young companies that ususally doesn't have a fully developed product and therefore often no revenues. As a result, they need
- money to survive
- advice to make the right decision to grow.
The motivation for angels: Angels want to contribute to and participate in the growth of the company to make a profit by selling their shares at a later point in time. They contribute with
- money to support the company financially
- their experience - usually from own founding experience - to add value to the start-up and improve their investment.
"In Angel Investing the key question you should ask yourself is: How much are you willing to lose?" - Marianna Hudson, Forbes
Why would I risk my money as an angel?
The truth is that investing in start-ups is risky. One of the biggest risks is the
There are 3 main reasons why angel investing is still interesting.
Angel investing can be:
„In the short run the market is a voting machine but in the long run it is a weighing machine.“ - Benjamin Graham
What do I need to be an angel?
- Enough money is necessary to achieve a minimum of 25 investments to diversify your risk
- David S. Rose suggests
- $25,000 initial investment
- $40,000 over the life of the deal
- Dealflow means not only seeing investment opportunies but also having access to the investment opportunities
- Naval Ravikant emphasizes that access is the ability to get into a deal that you want to get into to the terms you want to get into
- Good judgement is crucial because money and dealflow doesn't matter if you cannot pick the right start-ups
