This is the second article in a series on what it takes to be a great
angel investor (and why this should matter to entrepreneurs). Part 1 –
Access to Great Deal Flow – is here.
I have talked extensively about “social proof” in fund raising in the past. But the problem is that most deals – even really promising ones – fail. Just ask the people who poured money into once “hot” companies like RazorGator or Friendster. And we all know that Ron Conway is considered the savviest of angel investors and yet by definition not all of his investments succeed.
So being buddies with “all the right people” clearly isn’t enough to be successful. AngelList – as great and innovative as it is – does not guarantee success for investors. Obviously. In fact, sometimes seeing social proof (e.g. lots of brand names piling on) can lead to group think and price creep. I personally try to avoid many of these club deals. I like to invest where I have a personally strong connection with the entrepreneur and/or a strong intuition on the market from prior experience. I like to be early – usually first or near enough to it.
To read the full, original article click on this link: Angel Investing Skill 2 – Domain Knowledge | Both Sides of the Table
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