👼🏽Aspiring angels: here's a Q&A thread for you, inspired by a series of qs that an aspiring angel asked me to answer. /1
Aspiring angel: I qualify as an accredited investor, but am not in a position to make significant investments. How can I dip my toes?
Me: You can write small checks, join a syndicate like @Backstage_Cap Crowd, or invest through equity crowdfunding sites like @joinrepublic. /2
Me: You can write small checks, join a syndicate like @Backstage_Cap Crowd, or invest through equity crowdfunding sites like @joinrepublic. /2
Aspiring angel: How do you estimate the potential upside of an investment?
Me: I look for a +$billion market size, a founding team w/ industry/tech/business expertise, traction that points to a market that is willing to pay for the cos solution, and cos differentiators. /3
Me: I look for a +$billion market size, a founding team w/ industry/tech/business expertise, traction that points to a market that is willing to pay for the cos solution, and cos differentiators. /3
Aspiring angel: What are your views on investments done through convertible bonds versus equity?
Me: Don't mind the vehicle. I care more about the founders/startup. That said, I like equity rounds bc it's easier to know how much everyone on the cap table owns. /3
Me: Don't mind the vehicle. I care more about the founders/startup. That said, I like equity rounds bc it's easier to know how much everyone on the cap table owns. /3
Aspiring angel: Are there part-time venture partners?
Me: They can be. /4
Me: They can be. /4
Aspiring angel: Do venture partners leverage their own money or pooled assets?
Me: Both can apply. /5
Me: Both can apply. /5
Aspiring angel: Are there consortiums of individuals operating like venture partners that share expertise?
Me: There are, like @NextGenVP @Portfolia1. /6
Me: There are, like @NextGenVP @Portfolia1. /6
Aspiring angel: Are there distinctions between angel investors that are willing to provide advisory services?
Me: You can be one or the other or both, depending on the angel's preferences. /7
Me: You can be one or the other or both, depending on the angel's preferences. /7
Aspiring angel: Will founders value angel investors/ advisors by offering additional advisory shares?
Me: Sometimes. Many angels, like myself, will support founders pro bono. Ideally, investors support founders w/ fundraising, BD/sales, recruiting, company building, etc. /8
Me: Sometimes. Many angels, like myself, will support founders pro bono. Ideally, investors support founders w/ fundraising, BD/sales, recruiting, company building, etc. /8
Aspiring angel: How complex are the tax implications to angel investing?
Me: You'll need to manage K1s. Some states provide perks, like tax deductions, for investing in cos in their geography. That said, I'm not a lawyer & I recommend you talk to your legal counsel on this. /8
Me: You'll need to manage K1s. Some states provide perks, like tax deductions, for investing in cos in their geography. That said, I'm not a lawyer & I recommend you talk to your legal counsel on this. /8
Aspiring angel: Any tips on how someone could network with founders to get on the radar for board opportunities?
Me: Jump into the ecosystem, develop relationships, build a brand, add value + earn an invite to serve. You can also negotiate a seat when you invest. /9
Me: Jump into the ecosystem, develop relationships, build a brand, add value + earn an invite to serve. You can also negotiate a seat when you invest. /9
