Once you have made the decision to become an angel investor, you need to decide if you want to fly solo or join forces with an angel group to make your investment decisions.
Over the past 15 or so years that I have been investing in this space, I have acted solo, invested through funds and also invested as a member of angel groups. All three methods have advantages and disadvantages. Solo investing is great if you really have expertise in the space and want to be able to make quick decisions. It also helps to have a “significant” amount of capital to invest. Funds can provide great diversification to your portfolio. Angel Groups can bring many different perspectives and expertise not only to the investment decision itself but also to supporting the entrepreneur post funding.
If you decide that an angel group makes sense for you, the next step is to identify what type of angel group fits both you and your investment style. Angel Groups come in all shapes and flavors. Some, like Life Science Angels out of California, are very focused on a specific sector in the market. Angel Groups may require that you become an “active” member of the group and require a minimum commitment of both your dollars and your time. There are groups like Investors Circle that incorporate social impact into the investment process and are considered “triple-bottom line” investors.
Golden Seeds, the group that I am involved with, has focused on investing in companies where women are members of the “C-Suite” and have a significant equity stake in the company. Golden Seeds also provides training to both investors and entrepreneurs. The Pipeline Fellowship, recently started by Natalia Oberti Noguera, trains women philanthropists to become angel investors through education, mentoring, and practice.
A great place to begin to find an angel group is the Angel Capital Association (ACA). The ACA serves as the US trade association for angel groups and lists participating angel groups by region. Once you identify some groups in your area, meet with the members and also attend some meetings in order to determine if that is the group for you.
Whichever method you chose as you don your angel wings, best of luck in the journey. There is nothing more rewarding in the investment world than helping to launch a new company.