The startup ecosystem is currently fraught with uncertainty and peculiar challenges. However, there’s no denying that it still remains one of the most exciting and profitable spaces if the right bets are made, as at the end of the day, investments in startups are nothing but long-term, strategically placed bets.
There’s a plethora of investment opportunities, the dynamism of angel investing being the most lucrative of them all. But it is this wealth of information that may throw newbies for a loop. To combat this, we have curated a list of essential resources that will positively aid newcomers kick-start their angel investing journey.
This digestible article, penned by Paul Graham and derived from a talk at the 2009 Angel Conf., is an introductory course in itself. Covering the A to Z of angel investing, this should be your go-to article if you’re looking to gain a broad perspective on the subject.
http://www.paulgraham.com/angelinvesting.html
Through this article, Jay Fuchs provides a brief glimpse into how angel investors work, the pros and cons of angel investing and the Top 5 angel networks.
https://blog.hubspot.com/sales/what-is-an-angel-investor
Watch Himanshu Verma, the co-founder of Shift Alt Cap, explain the barriers to angel investing, namely ‘loss aversion’ and ‘lonely investor syndrome’.
This is the perfect guide to constructing a kick-ass investment thesis summed up in one article. (Bonus: Check out Earnest Sweat’s ‘Notes on a Thesis’ on Medium for his deeply analytical articles on the development, creation and findings of his investment theses in EdTech, FinTech and Real Estate Tech.)
With this podcast episode, Stella Garber, the Head of Marketing at Trello, takes you on her personal angel investing journey and lays emphasis on the value of creating and believing in your own investment thesis.
https://www.thevitalizepodcast.com/stella-garber-podcast/
Even though not strictly limited to startups, PitchBook’s downloadable guide is handy for those who wish to start with a general overview of deal sourcing (baby steps!) Not to forget, the data collected from nearly 3 million private companies will enable readers to create a list of the most promising investment opportunities.
https://pitchbook.com/blog/deal-sourcing-guide
“Five proven methods to get that pipeline flowing,” the sub-heading says it all.
https://thehelm.co/how-vcs-and-angel-inesvtors-source-deals/
Startup evaluation is more than just numbers and financials. It’s the idea that should appeal to an angel investor prima facie. Learn how to assess the viability and sustainability of startup ideas from Kevin Hale, a prominent investor, former partner of Y Combinator and co-founder of Wufoo.
Don’t be fooled by the brevity of the video. This informative installment in Backstage With Millionaire’s Startup 101 Series covers the basics of various valuation methods in a beginner-friendly way. (P.S. You wouldn’t want to skip reading the description for this one!)
Pretty self-explanatory, Arsalan Sajid walks readers through each stage of a startup’s life, from Seed to IPO, to help budding angel investors like you ensure that your expectations are in line with the financial and non-financial requirements of each stage.
https://www.cloudways.com/blog/startup-funding-stages/
Let’s get into the financial technicalities. Depending on your risk appetite, investment time horizon, cash available on hand and several other factors, a variety of financial instruments ranging from Convertible Equity to SAFEs can help investors finance a deal.
https://operatorcollective.com/the-financial-instruments-of-angel-investing/
Even if VCs and angel investors work differently, the metrics talked about here are key to understanding what investors, whether individual or institutional, should expect to gain from their investments. Startups are a risky business for VCs and angel investors alike. Hence, it’s always best to structure the outcome of your deal using relevant parameters.
Angel investing is dynamic and complicated. Added to the fact is that there are no ubiquitous, one-size-fits-all laws for the same. The legal process of angel investing has evolved over time and differs geographically as well. Take a gander into the legal process of angel investing in India below:
https://timesnext.com/legal-process-of-angel-investing-in-india/
Angel investing is risky, sure, but the tax benefits and exemptions investors can avail are aplenty. India is just one of the numerous countries that provides lucrative exemptions, thereby facilitating the startup ecosystem to thrive.
Fenwick's quintessential 'Dos and Don'ts' list, presented by Ash Fontana of AngelList at RockHealth, may have been published in 2013 but it still holds up well today. These are a few general but pertinent guidelines that you, as an angel investor, must be cognizant of.
https://www.fenwick.com/insights/publications/12-dos-and-donts-for-angel-investors
This incisive, anecdote-filled conversation pertaining to the startup ecosystem, capitalism and automation between two masters of their fields, Jason Calacanis and Lex Fridman, is bound to broaden your perspective through the comprehensive outlook on angel investing.
In a world where just about everything is commoditized, it is important to differentiate yourself as an angel investor. Both investors and startups employ their own screening processes to find the best match. Read this mini-guide which encapsulates opinions of prominent DanBAN members - Esben Gadsboell, Rolf Garde, and Christian Jantzen - on angel branding.
https://fiban.org/how-to-build-a-personal-brand-as-an-angel-investor/
Joined by Hall T. Martin, this episode spills the beans on the benefits of angel investor networks, major differences between incubators and accelerators, and which cities have become the next great tech hubs.
3. We don't want to be redundant, but you might want to check out Angel Investor: The Key Details & 5 Best Networks by Jay Fuchs to explore prominent angel networks. (See: Everything About Angel Investors).
We cannot recommend this all-encompassing book enough. Covering the A to Z of angel-investing, if you want to glean practical insights into the world of startups, the founder of Gust himself is here to help you.
Even though this starter-kit by no means is an exhaustive list of resources nascent angel investors can explore to make sound investment decisions, it is sufficiently comprehensive, and we're fairly certain that you'll never have to end your google searches with ELI5 hereafter.
Credits: Tarun Singh for illustrations
