Bill Reichert Managing Director
Garage Technology Ventures
The Art of Angel Investing
FiBAN
September 20,2012
Top Ten Myths of Angel Investing
Myths of Angel Investing
“Invest in what you know.” 1 Reality: Most winners are black swans
Myths of Angel Investing
“Focus on making money.” 2 Reality: Need to focus on creating value.
Myths of Angel Investing
“The key is good due diligence.” 3 Reality: The key is good intuition
Myths of Angel Investing
“Don’t let emotions cloud your decision.” 4 Reality: Recognize your emotions; don’t deny them.
Myths of Angel Investing
“Build consensus among a syndicate of investors.”
5 Reality: Controversial investments do better
Myths of Angel Investing
“Success comes from adding value.” 6 Reality: The harder you work, the less successful the startup
Myths of Angel Investing
“Make sure you protect yourself.” 7 Reality: Keep it simple; don’t invest if you are worried about control.
Myths of Angel Investing
“Valuation is important.” 8 Reality: Shared expectations are more important.
Myths of Angel Investing
“It’s cheap to start a company now.” 9 Reality: It’s really expensive to build a successful company.
Myths of Angel Investing
“Diversify your portfolio.” 10 Reality: Make few big bets, and buy options in several others.
Other Tips . . .
• Your influence is not based on the size of your check
• Buy high, sell higher; there’s no such thing as a bargain in venture capital
• Don’t chase fads; once a sector is hot, you are probably too late
Other Tips . . .
• Monitor the “Surprise Ratio”: Positive surprises to negative surprises
• Lower expectations do not result in higher returns
• Learn from your mistakes; better yet, learn from the mistakes of others
Bill Reichert [email protected]
The Art of Angel Investing
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