One of the big advantages if you are investing in angel investments in the US is that all those returns up until $10M are tax free as part of the tax code. As a foreigner sadly you get none of those benefits tax breaks for high risk investments.
Real-Life Angel Investing Returns 2012–2016
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Re: Real-Life Angel Investing Returns 2012–2016
#62Great article, not many people write about this. The return is higher than I expected, though it wasn't clear about over which time period.
Re: Real-Life Angel Investing Returns 2012–2016
#63> I also had no clue that KiwiCo could become so ubiquitous and my kids love them. Bits like this read like an advertisement to me, especially since my child has tried Kiwi crates and we found them to be pretty awful value. Maybe they're fun if you're an investor and you get a whole bunch of them at no cost, but for 20 bucks each we'd rather buy Legos.
I would say I have mixed feelings about kiwi crates. The continual freshness of ideas is definitely appealing especially during pandemic. The durability of the toys is not ideal. I also recognize that they can't produce high quality toys at low cost on a SAAS model. I do think they are making some engaging content for my kids. I don't like overwhelming amount of toys at the house so we had to kill off our sub.
Re: Real-Life Angel Investing Returns 2012–2016
#64Seeing how there’s a lot of investment/maths inclined nerds on this thread I will (selfishly..) point out the one key point nobody seems to have picked up on yet: she talks about the importance of diversification. Imho that it is the key differentiator between a well performing and atrocious angel portfolio. The math is pretty well explained in this piece by Abe Othman of AngelList here: https://angel.co/blog/venture…
That's not the right way to think about. Diversification reduces volatility by a sqrt factor thus increasing absolute return due to reduced volatility drag and risk-adjusted return through the reduction in volatility.
Re: Real-Life Angel Investing Returns 2012–2016
#65One of the big advantages if you are investing in angel investments in the US is that all those returns up until $10M are tax free as part of the tax code. As a foreigner sadly you get none of those benefits tax breaks for high risk investments.
Really? What law covers that?
Re: Real-Life Angel Investing Returns 2012–2016
#66One of the big advantages if you are investing in angel investments in the US is that all those returns up until $10M are tax free as part of the tax code. As a foreigner sadly you get none of those benefits tax breaks for high risk investments.
Really? What law covers that?
Re: Real-Life Angel Investing Returns 2012–2016
#67I kind of doubt that doing VC without being very high profile has better risk adjusted returns than SPY. Of course this somewhat hard to calculate on the VC side due to the lack of transparency and illiquidity of the market. But in fact that author is going about this all wrong. It doesn't really matter if VC outperforms. The point of VC or hedge funds or any other alternative investments isn't to outperform the mark…
Also she literally says she performance isn't the most imporant, she wants to improve the economy rather than shuffle ownership of existing corporates.
> When you invest in a startup, the money directly goes to the economy to build up a business, to create jobs and to actually contribute to the trickle down economy. On the contrary, investing in the public market is simply buying stocks from other investors. The money doesn’t directly go into the economy.
Re: Real-Life Angel Investing Returns 2012–2016
#68I kind of doubt that doing VC without being very high profile has better risk adjusted returns than SPY. Of course this somewhat hard to calculate on the VC side due to the lack of transparency and illiquidity of the market. But in fact that author is going about this all wrong. It doesn't really matter if VC outperforms. The point of VC or hedge funds or any other alternative investments isn't to outperform the mark…
Also she literally says she performance isn't the most imporant, she wants to improve the economy rather than shuffle ownership of existing corporates. > When you invest in a startup, the money directly goes to the economy to build up a business, to create jobs and to actually contribute to the trickle down economy. On the contrary, investing in the public market is simply buying stocks from other investors. The mone…
Then why did she write an article about angel investing returns?
Re: Real-Life Angel Investing Returns 2012–2016
#69I kind of doubt that doing VC without being very high profile has better risk adjusted returns than SPY. Of course this somewhat hard to calculate on the VC side due to the lack of transparency and illiquidity of the market. But in fact that author is going about this all wrong. It doesn't really matter if VC outperforms. The point of VC or hedge funds or any other alternative investments isn't to outperform the mark…
I strongly disagree that using such methods to calculate a minimum variance optimization is a reasonable benchmark for portfolio performance. The issue is limited historic data is a very poor fit for future risks. Looking at gold over the last say 2,000 years years shows a very bumpy ride with large long term negative returns. Stock data doesn’t have anything close to that kind of history, but looking at various hist…
I agree with this analysis. Anybody going off on Sharpe ratios has to extend that analysis to long tailed distributions, which venture investing certainly is. For example, if you do actually hit the Uber of companies, one early investor in Uber put in $5000 and reaped 20 million.
Re: Real-Life Angel Investing Returns 2012–2016
#70Earlier quoted context omitted.
Maybe at FAANGs, but $250K is far above the median SWR salary in SV.
Maybe for salary but not for TC. I suspect median TC in the bay area is close to $250,000 just because of how many people are earning $300k+ at public companies.
According to levels.fyi, you're right: https://www.levels.fyi/Salaries/Software-Engineer/San-Franci...
Median Compensation Package: $237,000
- Base Salary: $152,000
- Stock Grant: $85,000
- Bonus: $1,000