Angel Investing

[SteveO]

@JScott . Do you have any quick pointers or places to go to learn more about this?

 

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[JScott]

There aren't a whole lot of resources out there that are better than just finding someone who does it, and taking them to lunch. Seriously...just talking to someone who does it for a living (I'm not in this category, btw) is worth more than any other resource I know about...

That said, if anyone is looking for a good place to start, I recommend Jason Calacanis' book:

https://www.amazon.com/dp/B01M9C1Y3S/?tag=tff-amazonparser-20

I'm not a huge fan of Calacanis -- he's arrogant and much of his success came from working with Sequoia on a couple big deals that were probably as much being in the right place at the right time as anything else -- but it's a good book and provides some insight especially for those who are just starting out.

Sorry I don't have any better recommendations... I've been learning the industry through trial and error for a few years now, and still have a lot to learn...

 

[SteveO]

@JScott
Do you think the average of returns would favor angel investing over non-performing note buying?

 

[JScott]

@JScott
Do you think the average of returns would favor angel investing over non-performing note buying?

There are too many variables to know what's a better investment -- certainly a great angel investment is going to outperform nearly any other investment you'll ever do. But, the biggest variable is risk tolerance...

The variance in angel investing is huge -- you could invest in 10 companies and lose all your money in all 10. On the other hand, if even one or two of those companies has a big exit (sale, IPO, merger, etc), you could make 100x your investment or more. So, it wouldn't be surprising to see a large negative return or to see a HUGE positive return.

On the other hand, investing in non-performing notes will likely generate a stream of income in the 10-40% range, and if you're smart, there's not a tremendous amount of risk or variance. You'll likely never get rich on a single investment (like you can with angel investing), but you'll likely also never lose all your money if you invest in at least a few assets.

Long story short, it will depend on your skills at each, and more importantly, it will depend on your risk tolerance and your ability to handle a total loss. I'd be comfortable investing 50% of my investment funds in notes, whereas I'd probably never invest more than 10% of my funds in angel investments. Just a lot more variance and risk (of course, also more potential reward).

 

[biophase]

@JScott . Do you have any quick pointers or places to go to learn more about this?

What about asking that dude on our Grand Canyon whitewater trip that said he was an angel investor and then later told me that he had to ask his wife if it was in their budget to feed their dog raw food?

 

[journeyman]

In this podcast, Jason Calacanis interviews other successful angel investors. I've found it quite informative and enjoy listening to it.