How to start angel investing

#News(General) [ via IoTGroup ]

Headings…
How to start angel investing
How did I start angel investing?
What’s an angel investor?
Why angel invest?
What does it take to be a good angel investor?
Getting started
Capital
Meet founders!
Learn from others
Provide value

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While discussions were theoretical at first — I wasn’t asking myself “would I invest my own money in this?” — my outlook slowly started to change as I thought to myself “this is super interesting” and “I could do this too.” The timing of this aligned with a good friend starting a company, and I wrote my first check.
Angel investors invest money in early stage companies, typically in exchange for equity in the company.
There is a lot capital chasing a small number of companies, so it’s possible that despite you reaching out to or meeting with a founder and deciding you want to invest, you’re not able to get into the deal.
The rest of this post walks through the nuts and bolts of investing in 4 sections: getting started, pitch meetings, evaluating companies, and deciding to invest.
Some people think about this as a % of the capital they are saving/investing each year, and then consider how many investments you want to make.
Ask about their process — how they got started, how they meet founders, who they have invested in recently and why.
Let people know that you’re interested in investing, and ask if they wouldn’t mind looping you in when they are looking at their next company — could you grab a coffee, check out the deck with them, ask what questions they asked, and how are they evaluating the company.
Not everyone has a formal sit-down meeting with a founder before deciding to invest, but it’s best practice to get to know the founder (if you don’t already) and their business idea before investing.
A good pitch meeting allows the investor to understand the company vision and business model, the founder to understand if the investor would be value-add and a good fit, and allows both parties time for questions and discussion.
But I don’t think there’s a “right way”, you just want to make sure you are able to assess both the founder and their idea by listening and asking questions, and allow them to assess you as an angel as well

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