Yes, it’s that time of year once again when we think about resolutions for the New Year. In last year’s New Year’s post, I suggested that you think about the composition of your investment portfolio, taking into consideration the amount you want to commit to this sector overall as well as the diversification goals that make the most sense for you.
Here are my three tips for 2014:
Know your co-investors:
If the three most important criteria in real estate are location, location, location, then the top three for angel investing would be alignment, alignment, alignment. Not only is it important for investors and portfolio company CEOs to have alignment in terms of their vision for the company, it is just as critical for the co-investors to be aligned. When the business needs to shift direction, there is a follow-on round required, or an exit on the table, having conflicting objectives among your co-investors can be quite problematic. The advent of funding platforms has made knowing who else is in the deal somewhat more challenging. Entrepreneurs will oftentimes do some due diligence on potential angels, I would suggest you do the same on potential co-investors.
Get your investment dox in order:
Whether there is a follow-on round contemplated or a potential exit on the table, it is also very important that you know both your rights and your obligations as an investor. Where did you file those stock certificates? Do you have pre-emptive rights? Know your options and obligations before a follow-on round or a potential exit.
Look at the world through the lens of an entrepreneur:
Whether it’s negotiating a term sheet or evaluating a major strategic shift, it is always helpful to put yourself in the other person’s shoes. When I review a term sheet for a potential investment, first I read it as an investor, then I read it as though I am the CEO receiving the term sheet. I also enjoy reading books and blogs directed at entrepreneurs. Here are a few of my picks:
If you have a great resource, let me know in the comment section below!
Have a very Happy New Year!
Earlier this week, I was listening to an NPR program on “energy vampires”, those special individuals whose interactions can literally drain the energy from us. The term “energy vampires” was coined by Dr. Judith Orloff, a clinical professor of psychiatry at UCLA in her book Positive Energy. Now everyone has had some experience with “energy vampires” – those special people who cause some of the following reactions:
Women Invest 