Monthly Archives: January 2013

Angel Investing – Rules for Investing

stockpile 05There are many screens that angel investors employ when trying to decide which investment opportunities make sense for them. Selection criteria often include:

  • The “big” or “disruptive” idea
  • Quality Management Team
  • Large addressable market
  • Significant barriers to entry
  • Plausible Exit Strategy & “reasonable” valuation Continue reading

Angel Investing – Valuation Methods

Question Gold Dollar CoinsFor those of use entering the world of angel investing with a background in evaluating publicly traded equities, the valuation process for this investment class can be a real challenge. PE multiples and comps are very difficult to apply to companies that are not only pre-earnings but in many cases pre-revenue. The earlier the life cycle of the company, the less data points exist to determine a reasonable valuation.

In this post, I will outline some of the valuation methods you may want to consider for evaluating these early-stage investments (Note: please click on the title links to learn more about these methods): Continue reading

Angel Investing – Follow-on Rounds

DecisionIn my last post, I discussed planning your angel investment strategy for 2013 and taking into consideration not only new portfolio additions but also participations in “follow-on” rounds emanating from your current portfolio. So how do you decide, if you have the option to invest, whether or not to participate in a “follow-on” round? When I am considering this question for my own portfolio, I first determine what type of “follow-on” round this investment opportunity represents. I use the following three categories: Continue reading

Angel Investing – Resolutions 2013

Ready for year 2013It’s a New Year and time to make those resolutions. In addition to thinking about personal goals for the year, it’s a great time to review your angel investment portfolio. As angels we see many interesting investment opportunities and it helps to set a goal at the beginning of the year for the investment amount that you want to commit to this sector over the next 12 months. When setting this goal take into consideration: Continue reading