Private equity is, and always has been, where real fortunes are made. And, for a long time, it was the best-kept secret of the ultra-rich.
But that’s all changed – now, just about anyone can become an angel.
A few weeks back, we talked about the importance of building your reputation as an angel investor.
The takeaway: it’s really, really important. Your reputation plays a huge part in the quality of your deal flow – and that can make or break your track record as an angel investor.
So how do you go about maximizing your deal flow and making a name for yourself in startup-land if you’re not a Silicon Valley hotshot with a million bucks in your pocket?
Optimizing your deal flow can be both the most difficult and most rewarding part of getting started as an angel investor.
Here’s a deal flow boosting tip you can use right away:
Get involved in the startup community. I’m talking about going to tech events, checking out demo days at startup incubators, attending meetups and lectures, and participating in online angel networks (including the comment sections you see here!).
As an angel, you’ll find that your deal flow really takes off once you do.
Finding great deals is all about networking, so it only makes sense that expanding your network will result in more (and better) deals.
Not to mention the fact that you’ll meet other angel investors, some of whom have probably been in the game a long time. These guys and gals are not your competition. Rather, think of them as your mentors – or, at least, as good examples to follow.
Participating actively in the startup community will also keep you up-to-date on everything from startup news to market trends and more. In fact, if you’re not staying involved, there will be a big knowledge gap between you and your fellow angels.
Half the fun of startup investing is the fact that you’re always chasing the next big thing: the hottest startups, with the newest tech, solving the world’s biggest problems. How will you know a great deal when you see it if you’re not keeping up with the overall landscape?
Answer: you won’t. When the founders of Twitter went looking for investors, a great many angels turned up their noses at the deal. Why? Because they didn’t understand the overall market trends that would launch Twitter more than 70,000% in less than 8 years. Ouch.
I’d bet my hat that those angel investors have never stopped kicking themselves for missing that one, especially when you consider how easy it is to stay involved. Don’t be like them.
Until next time,