Cameron Chell here again.

In my 30+ years as an angel investor, I’ve never seen a startup landscape as ripe as this one.

Opportunities are flying out of the woodwork every single day… and if you haven’t taken the investing leap yet, this is the best year to do it by far.

To attract the best deals, however, you need a solid strategy first.

Oftentimes, rookie angel investors just want to dive in and find the coolest investments right away. And while that’s not a bad place to start, it misses a few critical steps in the process.

These steps – five, in total – could mean the difference between chump change or a lifechanging return… so it’s important you take them to heart.

Let’s dive into all five, kicking it off with one of my favorites…

1. Discover your WHY.

Before investing a single penny, it’s important that you understand exactly WHY you want to be an angel investor.

The answer may seem obvious at first: to make money. But if that’s all you’re in it for, you’ll restrict your own enjoyment and effectiveness as an investor.

To really determine why you want to become an angel investor beyond making money, ask yourself why you want to make money.There are many great reasons out there for making more money, from financial freedom, to leaving behind a legacy for your kids and grandkids, and more.

By figuring out this why, you’re getting to the heart of the matter. You need to clearly understand the impact your potential returns will have.

This will have a profound effect on the type of investments you make, why you make those investments, and which founding teams you invest in.

2. Determine your investment limit.

The second thing you’re going to want to do is determine the amount of money you’re comfortable investing. This is best done in conjunction with your registered financial advisor or another professional.

They can help you determine what is a prudent amount to invest into what are often high risk and relatively illiquid opportunities. Once you’ve done that, you can start looking deeper at the types of investments that may interest you.

If you’re a member of Angels & Entrepreneurs, you can start by scouring all of your deal opportunities over there.

3. Find your deal.

Next is the fun part… going out and finding your deals. Of course I’m biased, but I’ve found the best place to get great deal flow is right here in this community – especially if you’re new to investing.

Mark off the deals that are of interest to you, and look at their common themes before you go any further. Why are you interested in them? Is it their industry? Is it their potential return on investment? Is it the management team? Make sure each deal fits your “why.”

Spend some time really looking into this, and never make an impulsive decision. There are always more deals out there, and you’ll make more money walking away from deals than continuously investing in ones that aren’t worth your time.

Take a look at those deals you’ve chosen and narrow them down. Make a chart of all the pros and cons, the themes, and the things that are most interesting to you about each one. Out of all of them, decide on one deal you’d invest in over everything on your list.

Of course, this doesn’t mean you can only invest in one of these companies, but it is an important game to start honing your discipline as an investor.

4. Get feedback.

The power of community is something an angel investor should never take for granted. While you’re making an investment decision, it’s a good idea to get feedback from both your professional advisor and the angel investing community.

This type of socialization is great for a number of reasons. It can help you better understand investment timelines, liquidity potential, competitors, and more. It’s also helpful to lean on other people in the community for your own research.

Their perspectives and opinions matter greatly because these are often the insights that these companies’ customers have. In talking to them, you may come up with some surprising realizations that the investment you thought best suited you initially may not be the one that works best for you after all.

5. Sleep on it.

No matter how excited you are about a company and its potential, don’t make an investment right away. If there’s time, I suggest you take a few weeks to read through all of the materials available about a company before making an investment decision.

Before investing, make sure you completely learn the process of what may happen after you invest. Understand how you can stay involved and how you can contribute. And of course, make sure you clearly understand the expectations of the market.

After all of that, if you’re sure a deal fits your “why,” then go for it.

Once you’ve invested, see how it goes. While you wait for that investment to mature, continue to diversify your portfolio and continue to search for the next potential deal.

I would suggest you take at least a month before you make your next investment, as your opinions of angel investing as a whole will likely change. You’ll learn a lot in this phase.

As you become a more experienced angel investor, you’ll find that you will start to garner deal flow from other investors or other communities. This is incredibly valuable.

And to be honest, I think you’ll find that there are few communities like this one that provide so much deal flow and insight, as well as so many other people to bounce your thoughts and ideas off.

In other words, if you’re a part of this community, you’ve already taken an incredible first step. As you progress, make sure you follow these five steps to keep your deal flow in tip-top shape for this year and beyond.

That’s all from me for now, but I’ll be back very soon to talk about one of my favorite investing strategies: momentum investing.

Talk soon,

Cameron Chell