I’m 3.5 years into my 5 year plan and I’m on track to hit my goal. I’ve invested in companies either directly, through syndicates, via funds, a venture studio, some crowd funding sprinkled in, and leading this year to the launch of my own investing syndicate Interlock Capital.
My journey to be an angel investor has been met with obstacles (not enough capital, not an accredited investor), but new government policy has opened up some new and creative ways that allow folks like me to invest in some very exciting companies. Why angel invest? I’ve been lucky to have incredible mentors and investors on my entrepreneurial journey. I doubt I’ll ever be able to fully pay it back, but I can sure try! Angel investing is one way for me to do that. Plus it’s fun for me!
Even if I were accredited back then, I wasn’t in a position to write $50k or even $25k checks into a single company. This is typically the minimum required to invest directly with a sought-after startup. Actually, I probably COULD write that big of a check. The problem is that would be the ONLY check I’d be able to write for a long time. Meaning, I’d be putting all of my eggs into one basket. For angel investing, that’s a recipe for disaster.
90% of startups go to zero. They fail. 75% of funded startups fail. There are plenty of other stats out there like these. This is a risky business. It’s not for the faint of heart. This is nothing like investing in the stock market, mutual funds, or even higher risk/reward investments like hedge funds. The way to win here is to invest into a LOT of companies. Diversify. Get more swings at bat. Leverage whatever budget you have, and split it amongst as many companies as you can.