As others have stated, you really likely shouldn't be investing in early-stage startups at your level of capital.
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Ask HN: Getting Started Investing
31–40 of 100 posts
Re: Ask HN: Getting Started Investing
#32Have you considered getting your start by investing in micro cap tech stocks? The transaction is much easier. You get all the risk of total wipe out you may crave. But most importantly you get a lot more information and that might help you get practice. The most valuable practice is when you think a company has a great strategy and is a no brainer and it shuts down. Or when you do a lot of work and invest in a rocket…
Do you want him to lose every dollar? Most penny stocks are garbage. Generally low volume, occasional pump-and-dump scams, fake news from paid stock promoters, etc.
So you’re saying it great practice! Do a study on the survival rate of the average AngelList offer.
I didn’t say penny stocks. You can try names you know and like: SMAR, SSTI, PS, etc
Re: Ask HN: Getting Started Investing
#33If you're in Western Europe, why does that weird USA regulation about "accredited investor" matter to you?
I run a Dutch startup. As far as I know, all our (also Dutch) angel investors did was:
* Sign papers
* Transfer money
Re: Ask HN: Getting Started Investing
#34Earlier quoted context omitted.
Some people seeking funding don’t seem like good investments.
Sounds like it's just a problem of identifying arbitrage opportunities then. I.e. the problem isn't actually that there isn't enough places to put money. The problem is identifying systemic biases in the investor landscape (e.g. a bias against diversity, as just one potential example).
I mean, yes, obviously if there are people who aren't getting money despite actually being a good investment, then of course that's something that should be identified. However, I don't think that's a necessarily large amount of people (I could be totally wrong, this is just a gut feeling). It's a pretty well known failure mode that investors try not to fall into.
I think a much bigger arbitrage opportunity, one that e.g. YC tried to exploit a lot at first, is getting people who aren't looking for money, but would actually be a good investment, to try building a startup. That's why pg wrote so much about why people should build startups - he thought (and I imagine still thinks?) that there are way more good startups that can be built, if only more people were trying to build them.
Re: Ask HN: Getting Started Investing
#35These days there is too much money and not enough places to put it. It’s difficult as an unconnected angel to find decent opportunities. If you met the threshold to invest as an LP in a fund that would keep you diversified and the GPs would have access that you do not.
But there's clearly a lot of people who still seek funding but can't find it, so how does that mesh with the idea that "there's too much money and not enough places to put it"?
I could rephrase to “too much money and not enough risk adjusted places to put it.” Also I’m not particularly tapped in but in major cities in the US I believe seed is still reasonably easy to come by. Series A+ is getting tougher with rates higher than they were in ~’13 risk appetite is lower at that investment size.
Sure we could have a discussion about how geography shouldn’t matter, but right now being physically close to the money is an important factor.
Re: Ask HN: Getting Started Investing
#36Re: Ask HN: Getting Started Investing
#37Earlier quoted context omitted.
Some people seeking funding don’t seem like good investments.
Sounds like it's just a problem of identifying arbitrage opportunities then. I.e. the problem isn't actually that there isn't enough places to put money. The problem is identifying systemic biases in the investor landscape (e.g. a bias against diversity, as just one potential example).
This might be related but I think the bigger arb opportunity is looking outside of SF/NYC. There are some PE funds operating in the Midwest and doing great, but I think it’s still pretty difficult to find early/growth equity funding.
Re: Ask HN: Getting Started Investing
#38Earlier quoted context omitted.
Contrary to the stock market, Bitcoin _is_ a zero sum game.
Could you expand on that please?
First, there's no intrinsic value. If a healthy company's share price drops to zero, I'll buy up as much as I can, making a profit on just its cash reserves. Bitcoin isn't "healthy" (or unhealthy); it doesn't hold assets; it is the asset.
Second, companies (hopefully) generate value and return it in buybacks or dividends.
It goes a little bit beyond your question, but Bitcoin on its own doesn't create value in the same way a company does. Investing in Bitcoin is much more like buying Turkish Lira.
Re: Ask HN: Getting Started Investing
#39If you want to someday build a product, save your capital and use it to seed your future company. In the meantime, put it in US Treasuries or munis.
Re: Ask HN: Getting Started Investing
#40Do you want to invest, or to gamble? At your level of available funds, investing in startups is gambling, because you can’t spread your bets widely enough to hedge them and increase the likelihood that gains on one will make up for the losses or break-even on the rest. If you want to invest , I recommend index funds.
> If you want to invest, I recommend index funds.
This. I've gotten this question from family, and the answer's just pair VTI and BND at some ratio you're happy with (or buy a target date fund) and wait.