“There are three ways to do early-stage investing,” Nelson Chu insightfully said.I was meeting with three of the smartest investing minds I know: Nelson Chu, Graham Osborn, and Chris Dardaman. We were discussing Graham’s upcoming presentation to Angel Lounge at the ATDC. His topic was applying Peter Thiel’s Power Law of Venture Capital to angel investing.Chris had a concern about this topic, “I don’t want this presentation to convince our group to stop investing in startups.” Given the way the majority of angels invest, the reason he said this was simple. The risk-reward does not look good. In fact, the numbers look downright dismal.Then he asked me, “Why do you think our members invest in startups?”“I believe they do it for a couple of reasons. One, it is a meaningful way to stay engaged in our community. Our members have lots of experience, and they want to help entrepreneurs be successful. Being around startups is fun. Two, they want to make money,” I said.“But the odds of success are slim,” he pressed. “What kind of returns are they expecting?”“To be honest with you, I think most of us would be happy simply getting our money back over time,” I said.That’s when Nelson jumped in, “There are three possible investment strategies. I just read a Bloomberg
What Type of Angel Investor Are You?
“There are three ways to do early-stage investing,” Nelson Chu insightfully said.I was meeting with three of the smartest investing minds I know: Nelson Chu, Graham Osborn, and Chris Dardaman. We were discussing Graham’s upcoming presentation to Angel Lounge at the ATDC. His topic was applying Peter Thiel’s Power Law of Venture Capital to angel investing.Chris had a concern about this topic, “I don’t want this presentation to convince our group to stop investing in startups.” Given the way the majority of angels invest, the reason he said this was simple. The risk-reward does not look good. In fact, the numbers look downright dismal.Then he asked me, “Why do you think our members invest in startups?”“I believe they do it for a couple of reasons. One, it is a meaningful way to stay engaged in our community. Our members have lots of experience, and they want to help entrepreneurs be successful. Being around startups is fun. Two, they want to make money,” I said.“But the odds of success are slim,” he pressed. “What kind of returns are they expecting?”“To be honest with you, I think most of us would be happy simply getting our money back over time,” I said.That’s when Nelson jumped in, “There are three possible investment strategies. I just read a Bloomberg