Angel Investing: Team or Solo Sport


team or solo cyclist 150x150 Angel Investing: Team or Solo SportAngel investing is one of those activities that can be done alone or with partners. Your risk tolerance and ability to work within the whims of other people can help determine how much you will want to stomach on your own or share with a group. You will be susceptible to other people’s gut responses and even eccentricities, but they will also be exposed to yours. The success of your investments will greatly depend upon how well you know yourself and what situations are the most comfortable.

According to Vernon W. Yates, Chairman of Governors, Tech Coast Angels, angel investing is a team sport. In working together, angel groups provide a variety of benefits for both the entrepreneur and the angel investor as these groups bring a diverse set of talents and skills to the table that can be leveraged to maximize the return on investment. And, by participating in an organized group, angels can more professionally identify and fund the most attractive companies. [1]

In reality, the number of angel investment groups is growing substantially throughout the world. Those investors who are seeking to combine their skills and talents with those of others are finding that the networking benefits alone are enough to consider joining one of these groups. But there are other factors that enter into the decision to join a network or not. For one, you must decide just how much investing in startups you want to do and where you want to do it.

Many angel investors prefer to keep their investments local. For some, operating within the network is enough to make more deals “local”, but for others, geography matters, too. The ability to “re-live the startup adventure” is a perk for a number of angel investors who are also entrepreneurs. They want the same level of excitement that they found in their own startup experiences.

In addition, many angels invest by way of referral as a result of the circles they already travel in. Angels also often tend to want to support “local” entrepreneurs as they have been there themselves and want to “pay it forward”.

Jeanne Lee at Fortune Small Business recommends that first time angels should not enter into investments alone as they can get too emotional about deals. She recommends either informal or formal networks to help create more structure to investment deals and to allow the angels to invest smaller amounts in more deals to reduce the overall risk. [2]

Whether you decide to go it alone or work with a group, it is important to understand yourself and what you hope to gain from your investment experiences. If you want 100% involvement, going into an investment alone can often grant you as much access and control as the entrepreneur. But, keep in mind that won’t always be viewed favorably by the entrepreneur.

If you are seeking promising investments that require little time and just a portion of what you are willing to invest, consider finding a group that fits your needs. Understanding yourself and your limits will put you in a better position to enjoy the angel investing experience – no matter how much money you make.

Notes:

[1] Angel Investing Is a Team Sport

[2] Angel Investing 101

* For series, references are published in the last installment of the series.

 

  • andrew25

    I would certainly consider Angel investment as a team sport and it is an easy way for getting maximum profit through which the diverse set of skills and talents of the investors can be put into better use. For solo investments they can be only profitable when the Angel investor is a highly right minded and flexible person with instincts of making things right.

  • andrew25

    I would certainly consider Angel investment as a team sport and it is an easy way for getting maximum profit through which the diverse set of skills and talents of the investors can be put into better use. For solo investments they can be only profitable when the Angel investor is a highly right minded and flexible person with instincts of making things right.

  • http://vladadrugstore.blogspot.com/ vlada

    I'm absolutely agreeing with the thesis that investing is a team sport. It's very hard and sometimes it's absolutely impossible to create the perfect strategy of the investments while working alone. And pay attention that when you are acting alone, you are all the time under the hard pressure of the personal responsibility of the investments. That is why in reality, the number of the l investment groups is growing substantially throughout the world.

  • canan cansev

    unless we demonstrate a strong commitment on our objectives to sustainability in the longer run,we will neither have growth and stability the keywords here is “commitment and action.that's why the need to cooperate and became a part of a team

  • SHEELA SINGH

    I believe there's power in unity and by bonding with other angel investor you're a step a head,there's no such thing as a complete investor,what you're lacking in some thing,the other member can provide

  • Seenis Selva

    As an investor you always want to see your investment growing on a sustained basis that's why you need all the help you could get from your co-members or from outside source that's the way to run a business

  • canan

    the keywords here are 'commitment' and 'action' to invest consistently. that's why the need to cooperate and became a part of a team.

  • Selva

    As an investor you always want to see your investment growing that's why you need all the help you could get from your co-members.

  • flor bombase

    Although you stated that angel investing is one of those activities that can be done alone or with partners I would rather do it with partners in my case I sometimes made decisions that I could not thougrougly implemented I need to be surrounded by strong willed peers

  • kyrious

    Being part of a team,combining skills and talents with partners,participating in brain storming sessions,these are the habits of highly successful individuals if you could find two or three people in your circcles with this kind of attitude then you're in good hands

  • Ricardo

    I think as someone on the outside of this field looking in at this point, that I'd probably be more comfortable taking a position in something with partners.

    Also I imagine in a “hands on” situation it may be difficult at times to sit back and let the other people involved do their thing.

  • dobra

    the most important think is team work beacause lonely you can't do it so much good work like in a team.

  • http://venturehype.com The Hyper Team @ Venture Hype

    You're very clever — new angels are encouraged to co-invest as they learn the ropes. Angel investing is risky, even more so if you act solo.

    As to being a “hands-on” angel, we've commented on this in a previous comment:

    “The challenge is to decide where to draw a line between too much help and not enough help. As Carl said in Angel Investor’s Challenge #5: Now What?, “even before the investment is made, you need to think about how you’ll communicate with management. You don’t want managers to feel like you’re breathing down their necks, but you do want to establish regular channels of communication.” So, to avoid hard feelings, it's essential to communicate your expectations with the entrepreneur early in the game.”

  • SlayMe

    I personally would like it when I have people around me, people whom I could really trust, whom I get advice from and decision making tips.

  • jessyka

    Being in a group of investors is for me the better part. A group will know much more about a project or an investment and the needed skills as a single person can.

    That is why I found it interesting to be in an angel investment group. You will always have a few specialists on board.

  • http://venturehype.com The Hyper Team @ Venture Hype

    Most angel groups require its members to commit a minimum amount of investment within a certain time period, although it’s typically up to the members to decide which companies to invest in. So being in a group does help investors to take action and stay committed.

  • http://venturehype.com The Hyper Team @ Venture Hype

    Angel groups are either member-led or professionally managed, typically by non-affiliated managers. With member-led groups, members share responsibilities to decide whether a company is 'investable.' You receive much more help when investing as a group as oppose to going it alone.

  • http://venturehype.com The Hyper Team @ Venture Hype

    Good to hear. If you're new to angel investing, definitely try to co-invest with seasoned investors instead of going solo.

  • http://venturehype.com The Hyper Team @ Venture Hype

    Yes. Members of an angel group often come from different backgrounds (e.g. accounting, legal and technology). They often leverage on each other's skill sets and expertise to perform due diligence tasks. Investing as a group is typically a safer route for new angels.

  • http://venturehype.com The Hyper Team @ Venture Hype

    Yes. Members of an angel group often come from different backgrounds (e.g. accounting, legal and technology). They often leverage on each other's skill sets and expertise to perform due diligence tasks. Investing as a group is typically a safer route for new angels.

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Angels and Startups, Don’t Play in China Until You Read This

Angels and Startups, Don’t Play in China Until You Read This

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