Success as an angel investor doesn’t come overnight — it takes years of business achievements (and failures) in order to truly have an understanding of what’s required to do well as an angel.
Growth Hack
“Try to gain as much experience as you can by Googling industry-related phrases, researching and [reading up on the latest trends in publications like] Inc., Forbes and the Huffington Post. If you’re sitting next to someone on a plane with 10 years of experience and you have zero, try to get a few years from that person by talking to them about the dos and don’ts. Within a few short weeks, you could gain four or five years of experience,” says Birg.
Remove Emotion From the Equation
“This is a long-term numbers game: you’re most likely not going to get it right on your first try, but unfortunately a lot of angels approach angel investing with emotion while professional investors approach it more objectively,” says Crowder. “You want to make sure you have a strategy around angel investing so you can get a broad enough diversity in your portfolio -- maybe make a few safer bets, as ‘safe’ as early stage investing can be.”
Know the Risks
“Making money from angel investing is really difficult, and the odds [of success] are lower than with a more secure investment.” says Gupta. “You have to have a really high risk tolerance and do it because you love doing it, and not stress too much about the returns — especially in [the] short term. You have to stay emotionally detached.”
Stick to What You Know When Investing
“I invest in people and companies that are relevant to my business or have similarities, so I’m able to bring them in-house and use shared resources,” says Kurji. “I try to stay away from investing in things that I don’t have too much control or say in. I’m more of a conservative investor.”
Focus on Your Core Offerings
“I think the key is to pick the companies you work with to be relevant to your core,” says Rayess. “There's my ‘core’ software services, my ‘core’ marketplace, my ‘core’ staff and my ‘core’ B2B. Look for where there's synergy and an opportunity to work together.”
This feature originally appeared in YEC Quarterly, a print magazine for YEC members. YEC Quarterly is no longer producing new issues.
