Good essay - and I also liked the video (posted earlier) that it was based on. Tiny pedantic point; there's one too many 'should's here:
"Similarly, founders should also should not get hung up on deal terms"
Either 'Similarly, founders should also not...' or 'Similarly, founders also should not...'
Didn't want to detract from the message of the piece, but thought it worth pointing out in case it helps.
How to Be an Angel Investor
31–40 of 55 posts
Re: How to Be an Angel Investor
#32Paul - you're the man, thanks and gratitude from me and lots of people for another essay. Learned some good stuff this time.
Also, did you write this one either Etherpad? I took a lot from watching you write your last piece in Etherpad, so if that's available that'd be very cool. Cheers.
Re: How to Be an Angel Investor
#33How much does an angel invest? ... The upper bound is obviously the total amount the founders want to raise. Obviously this is an upper bound; but it isn't necessarily the upper bound. I'm sure there are instances where the limiting factor is how deep the angel's pockets are.
as a "private amateur" angel investor, i put ~$300K into 13 deals over a period of 4 years ('04-'84(, at a median size of around $20K. my largest investment was $100K; my smallest was $5K. most of them were at valuations south of $3M (in a few cases i did A rounds north of $5M pre, however in both cases i was working or consulting with the company). so far it looks like 3 of the 13 will do >5x, another 2-3 are likely going to return 0, and the other 5-6 are still tbd. i'm hopefuly i'll end up with 3-5 wins, and an aggregate return of 4-5x over a period of perhaps 7 years.
as a "professional" angel investor now for a VC fund, i typically invest $50-$250K at valuations between $1-3M pre-money (however i'm new on the professional side; only done 4 deals since December). too early to say on either wins or returns, but i'm happy with the deals i've done so far.
i think most private angel investors (in Silicon Valley) who dabble do deals at between $10K-25K. most professional angel investors in Silicon Valley who do it as their primary profession invest between $25K-250K per deal.
your mileage may vary.
some angels may do deals as high as $500K - $2M, however those are select cases. most times there are multiple angels syndicating.
Re: How to Be an Angel Investor
#34How much does an angel invest? ... The upper bound is obviously the total amount the founders want to raise. Obviously this is an upper bound; but it isn't necessarily the upper bound. I'm sure there are instances where the limiting factor is how deep the angel's pockets are.
as a "private amateur" angel investor, i put ~$300K into 13 deals over a period of 4 years ('04-'84(, at a median size of around $20K. my largest investment was $100K; my smallest was $5K. most of them were at valuations south of $3M (in a few cases i did A rounds north of $5M pre, however in both cases i was working or consulting with the company). so far it looks like 3 of the 13 will do >5x, another 2-3 are likely…
sorry that should be "over a period of 4 years ('04-'08)"
Re: How to Be an Angel Investor
#35Great article.
Re: How to Be an Angel Investor
#36Several good hacks from the writing:
1) Be relentless resourceful.
2) Lower your risk to be decisive.
3) Be good.
Re: How to Be an Angel Investor
#37Perhaps the single most pragmatic and understandable description of angel investing I've read to date. I am courting angel investors currently and have only run into a small handful who meet the criteria you describe.
Thank you so much for writing this.
Ted Ray, Founder & CEO, Ted's Tinctures Inc. http://jetlagformula.com
Re: How to Be an Angel Investor
#38Perhaps the single most pragmatic and understandable description of angel investing I've read to date. I am courting angel investors currently and have only run into a small handful who meet the criteria you describe. Thank you so much for writing this. Ted Ray, Founder & CEO, Ted's Tinctures Inc. http://jetlagformula.com
Good luck with the fundraising!
I'm curious about your product though. I find it hard to believe that your formula is more effective than 1-3mg of melatonin when the time comes to sleep.
Is it the particular combination of ingredients that is so effective? It doesn't seem like any of the individual ingredients would have much of an impact. It doesn't mean you don't have a business model though, you have very nice packaging and there is currently no package on the shelves that treat jetlag.
It would complicate dosing instructions, but would not bundling your product with 1mg of melatonin to take when it comes to sleep dramatically improve effectiveness?
Edit: After reading the testimonials on your site, it seems that you are not trying to (supplement) sleep cycle issues, but are dealing with the fatigue and haziness one feels after flying for 18 hours. I would believe your product helps with that.
Re: How to Be an Angel Investor
#39Earlier quoted context omitted.
I was looking through the legal documents just to get a sense of what technically happens when a corporation issues a new type of stock. Thanks for sharing these documents. Not sure if this is relevant, but http://ycombinator.com/seriesaa/aa-boardconsent.doc has a typo... there is no section 1.iii .. it skips to 1.iiii and then 1.iv.
You mean section 1.iii is misspelled as 1.iiii
Yes, exactly.
Re: How to Be an Angel Investor
#40Earlier quoted context omitted.
as a "private amateur" angel investor, i put ~$300K into 13 deals over a period of 4 years ('04-'84(, at a median size of around $20K. my largest investment was $100K; my smallest was $5K. most of them were at valuations south of $3M (in a few cases i did A rounds north of $5M pre, however in both cases i was working or consulting with the company). so far it looks like 3 of the 13 will do >5x, another 2-3 are likely…
sorry that should be "over a period of 4 years ('04-'08)"
FYI, in the first 2 hours you can edit your posts via the direct link to make corrections like that. (And thanks for the great specifics in the grandparent post.)