Beginner's Guide to Building an Angel Investment Portfolio - Part Three

Subscribe

This is a 3 part guide to starting your own angel portfolio. The third part will focus on looking at deals, keeping track of them and quick evaluation. The first part can be found here.
The second part of the series can be found here

This is the last post in the series so hopefully everyone will have a good place to start once they've read all three posts. If you have not, please refer to above.

We now come down to, what I would consider the most important part of angel investing. Sourcing good deals. People often ask me,

I have heard on average people will say no to 50 - 100 companies before investing in one, how do you even find 100 deals?
Yes, that's true for venture investing. Statistics show, venture firms looks on average at 87 deals before investing in one. This is 87 QUALITY deals. The reality is slightly different with angel investing and I can tell you a way to make the process more systematic efficient, and set yourself up to make some nice returns .

If you have read the previous posts, then you''ll know I'm making these suggestions with the expectations that I want a good 5-10x + my money in the foreseeable future. The best general way to invest for a beginner general investor is to only look at deals that they personally understand and can add value to. The experience should come from previous experience, and you can see how you will add value to the investment other than money.

A good way to start is to troll the hell out of angellist, Gust, hackernews, tech crunch. You can search by industries on angellist and you can take a good look at deals that are raising money either through accredited investors or to the public. This method is pretty straight forward and you just have to know what you are looking for.

The second way to do it, is proactively think about problems that really need a solution. For example, maybe you feel there really should be an app created to help you find the best nightlife in a city. You came up with a problem that you think should be solved, then you go and look for companies trying to solve these problems. Having what you are looking for in mind, you can loop back to method one, contact a bunch of companies, take calls, compare them and make a decision there.

The third way is to build up a network of angels around you who can pass deals to you that they're interested in. This way, not only has it gone through an initial filter (Your angel friend), it's pass on to you.

This is a short post compared to the others but really you should just try to go out there and try it out. Hopefully these three parts will get you started on building your angel portfolio!

Region

Comments (2)

 
Dec 8, 2013 - 6:10pm

I've read that the best ways to get in contact with an angel investor or VC for your startup is to get an introduction from a mutual connection, but what are some other alternatives? Also what types of quantitative data(market sizing, problem identification) do you expect an entrepreneur to present to you when he makes a pitch?

P.S. Loved your angel series by the way!

Start Discussion

Popular Content See all

Received my PWP rejection email!
+91IBby Prospective Monkey in Investment Banking - Mergers and Acquisitions">Prospect in IB-M&A
Is Evercore the next Bulge Bracket bank?
+24IBby Intern in Investment Banking - Mergers and Acquisitions">Intern in IB-M&A
I got a top IB SA offer thanks to WSO
+17IBby Prospective Monkey in Investment Banking - Mergers and Acquisitions">Prospect in IB-M&A
Is Liontree the next bulge bracket bank?
+17IBby 1st Year Analyst in Sales & Trading - Equities">Analyst 1 in S&T - Equities
Biggest Regret in Undergrad
+16IBby Prospective Monkey in Investment Banking - Mergers and Acquisitions">Prospect in IB-M&A
Virtual Summer Interns - which banks sent you WFH gear?
+15IBby Intern in Investment Banking - Industry/Coverage">Intern in IB - Ind

Total Avg Compensation

October 2020 Private Equity

  • Principal (6) $693
  • Director/MD (14) $640
  • Vice President (53) $361
  • 3rd+ Year Associate (60) $272
  • 2nd Year Associate (112) $246
  • 1st Year Associate (242) $222
  • 3rd+ Year Analyst (23) $162
  • 2nd Year Analyst (52) $141
  • 1st Year Analyst (150) $118
  • Intern/Summer Associate (17) $66
  • Intern/Summer Analyst (167) $60

Leaderboard See all

1
LonLonMilk's picture
LonLonMilk
98.4
2
Jamoldo's picture
Jamoldo
98.3
3
Secyh62's picture
Secyh62
98.2
4
CompBanker's picture
CompBanker
97.8
5
redever's picture
redever
97.7
6
Addinator's picture
Addinator
97.6
7
Edifice's picture
Edifice
97.6
8
NuckFuts's picture
NuckFuts
97.5
9
frgna's picture
frgna
97.5
10
bolo up's picture
bolo up
97.5