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Angel Investing

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  • Angel Investing

    I am wondering what The Collective thinks about angel investing. ( I know one doctor on here had a truly horrible experience.) I’m wondering if it is worth the risk/reward of looking at this class. As for me, I am squared away with respect to “traditional” investing/savings/debt, my share of the practice, some real estate, a minority share of a private business, and a couple fun but minimally profitable side gigs. I guess I’m looking for something to further scratch my itch of non-traditional investing, but not something which is going to take up too much free time.

    My specific questions:

    1) As I drop down to half time with my practice, I find that I have more 9-5 time free that I could conceivably spend evaluating deals. Could one expect this research to reasonably lead to good outcome? (I am thinking of crowdfunded real estate and my assertion that private banking is scooping the best deals. Or stock-picking in general.)

    2) One purported benefit of being an angel investor is the chance to be involved with new and interesting people. As a bona fide introvert, this is unappealing, particularly as I get more crotchety with advancing age. Something such as “AngelList” (a fund of investments) might be a possible option. Any experience with these?

    3) I don’t have enough contacts (or money) to be a stand alone angel investor to reasonably invest in 10-20 companies, so barring the use of a fund, I would go through a club/group. (Such as Space Angels or a local group.) Thoughts about these? Two things give me pause, the expectation of required capital commitment ($50-100k/yr) and involvement with the founders. Regarding the money, I worry that I’d not find something good enough to justify that price tag year after year. Regarding the involvement, refer to point 2 above.

  • #2
    I think any amount you put into angel investing needs to be an amount consistent with "play money."
    Helping those who wear the white coat get a fair shake on Wall Street since 2011

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    • #3
      Angel investing = lighting money on fire

      That being said: god bless angel investors for doing what they do.

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      • #4
        I have some experience here.  I was asked to join a local angel investing group.  A neonatologist friend of mine was a member. If you want to feel dumb try joining one of these groups in a tech area.  Medical education and personal investing are not what these groups are all about.  Most of the members of the local group had founded businesses employing 1000s of people.  Some companies went public and were bought by larger firms.  Lots of military defense contracting, biotech etc here.  Most people in my angel group had much more money than I and lots of knowledge about what it takes to start a large company and get patents.  Basically the group meets once a month and about 3 deals were presented.  If something sounded promising then a due diligence committee was formed and the numbers, management, etc were carefully examined.  If the company passed due diligence then a member could decide to invest and how much.  I was on a due diligence committee for a biofuels company.  The company ended up failing because the price of gas dropped.  I did not invest in it.  I did invest in a company that was going to produce a new type of incubator for neural tissue.  I have posted before that this investment failed when the founder killed 3 people at a faculty meeting because she was denied tenure.  I know it is anecdotal experience but I am sour on Angel investing.  It was very interesting to meet the people who had founded most of the local successful businesses.

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        • #5




          I think any amount you put into angel investing needs to be an amount consistent with “play money.”
          Click to expand...


          I totally agree with this.

          I have been involved in 2 angel investing ventures, both of which lost 100%.  At the time, I invested an amount of money that wouldn't break me if I lost everything, but it was also large enough that it burns when I think about it.  I did not do enough due diligence, although even if I had, I'm not sure I wouldn't have invested in at least one of the opportunities.

          The other general rule is 1 in 10 may hit (possibly big) and the remaining 9 will fail.

          I'm still interested in opportunities, despite my poor history, because I don't mind the occasional higher risk investment.

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          • #6




            I have some experience here.  I was asked to join a local angel investing group.  A neonatologist friend of mine was a member. If you want to feel dumb try joining one of these groups in a tech area.  Medical education and personal investing are not what these groups are all about.  Most of the members of the local group had founded businesses employing 1000s of people.  Some companies went public and were bought by larger firms.  Lots of military defense contracting, biotech etc here.  Most people in my angel group had much more money than I and lots of knowledge about what it takes to start a large company and get patents.  Basically the group meets once a month and about 3 deals were presented.  If something sounded promising then a due diligence committee was formed and the numbers, management, etc were carefully examined.  If the company passed due diligence then a member could decide to invest and how much.  I was on a due diligence committee for a biofuels company.  The company ended up failing because the price of gas dropped.  I did not invest in it.  I did invest in a company that was going to produce a new type of incubator for neural tissue.  I have posted before that this investment failed when the founder killed 3 people at a faculty meeting because she was denied tenure.  I know it is anecdotal experience but I am sour on Angel investing.  It was very interesting to meet the people who had founded most of the local successful businesses.
            Click to expand...


            that's a terrible story.   :cry:

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            • #7
              Resurrecting this thread after a couple years.

              Anybody have experience with Space Angels?

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              • #8
                Read my post from 2017.

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                • #9
                  I stick with my Earth Angel. Oh the 50's!

                  https://www.youtube.com/watch?v=VJcGi4-n_Yw

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                  • #10
                    I like EquityZen for pre-IPO shares of well known brands, and have made a small investment in one, but I went in knowing that if I lose that money, it's fine.

                    Play money to scratch that itch.

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