ShaulaBlog - clear-eyed capitalism

Great advice for Angels

If you read much of my blog, then you’ve probably quickly caught on that I’m referring to early-stage investors. Often called Angels. Sometimes called Friends, Family and Fools. Angels are usually one more step removed from the original founders, and are accredited investors who can legally make these early stage investments. As part of my explorations into understanding how companies are funded and built, I’ve been looking into angel investing. I have yet to actually make an investment because the intial layer of opportunites make me wary. In many cases the companies that come and pitch angel investing clubs come do a 10 minute pitch, answer questions for 2 minutes and walk out the door. Admittedly, that’s just the taste and if we’re interested we follow up for a more in-depth look, possibly as a group of a few of us. However, the other kicker is of the many I’ve seen so far, they’re looking to raise some 3 million dollars with a minimum investment of $25,000. I can’t help but notice what a big ratio that is, and be skeptical of how much time or energy they’ll realistically have to look out for my interests or even respond to me looking out for my own, were I to make such an investment. I mentioned these concerns to my esteemed business school founders, the Pinchots, and Libba pointed me to a blog that very articulately outlines, based on experience, what I have merely begun to suspect. Most excellent reading follows here.