Do Angel investors make money? An interesting question for sure! Well, I can tell you from first hand experience that being an angel investor is sexier than it sounds! It’s not easy, requires a lot of study, and most importantly – time. So, if you are looking to make a “quick” buck, Angel investing isn’t it – you may have better odds winning the lottery! What’s even more interesting is that most angels aren’t really qualified to be angels – sure, they have money but they don’t have the knowledge to define what constitutes an investment worth making. Now, add the ever changing dynamics of the entrepreneurial tech industry and you’ve got variables that can be challenging even for an experienced VC.
The venture capital industry, of which angel investing lives as part of the ecosystem, is very interesting and there is a lot more to it than most people understand. (To read my posts on becoming a VC, click here.) Remember, for every Google or Apple, there are 100 companies out there that don’t provide any real returns and that is all factored as part of the “bet” angels (and VCs) have to make.
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The next time you are pitching your idea to someone, remember the 3 B’s…
To your continued success…
Okay – so let’s be clear on what a “board of directors” is. According to Wikipedia, “A board of directors is a body of elected or appointed members who jointly oversee the activities of a company or organization. The body sometimes has a different name, such as board of governors, board of managers, board of regents, board of trustees, board of visitors, or executive board. It is often simply referred to as “the board.”
All right – that’s done… so, let’s try to answer the question: Does a startup need a board of directors? The answer is… it depends. To be more clear – it depends on what stage the “company” is in specifically relating to its idea or product.
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No, we’re not talking about that awesome movie with Nicholas Cage… we’re talking about someone bailing on you when you ramble on about your idea!
It’s all about the ‘art of the pitch’. When you have an idea that you want to share, it’s important to understand that your ability to sell the idea, in the beginning, is potentially more valuable, than the idea itself. Continue reading →
If you take but one thing away from these posts, let it be this: venture capital is a tough business to get in, be in and stay in. During 2009, the VC industry continued the downsizing that became very visible in mid-2008. While the global economic issues that surfaced in 2008 (e.g. banking meltdown, subprime market, global economic recession) accelerated the decline and definitely added stresses to the industry, this resizing is a function of the technology bubble bursting several years earlier – also known as the “dot com to dot gone” era. With many firms that raised money during the bubble unable to raise new funds at this time, a further decline in the number of firms is likely. While fund raising and investment entered a new range, IPO activity remained at a mere trickle and the acquisition exit marketplace declined both in quantity and quality. Continue reading →
So, you still want to be a VC, eh? I don’t blame you… besides the challenges getting started, venture capital is exciting and provides a level of exposure, both technologically and business-wise, that is hard to match. And look at some the new friends you get to make… Mark Zuckerberg (Facebook), Marc Pincus (Zynga), Reid Hoffman (LinkedIn), Biz/Ev (Twitter)… you get the point. Continue reading →
So, you want to be a venture capitalist, eh? Why not? It just sounds cool, right? Imagine you’re at a typical Silicon Valley meet-up or in your social circle – usually, everyone around you is an “engineer” but you respond with, “I’m a VC!” All of a sudden, you’ve just moved up their speed dial and your personal stock skyrockets because you have everyone’s attention! Look at some of the perks associated with being a VC: you have the potential of doing well financially; you can meet some of the brightest minds with amazing ideas that are about to change the world; you can become part of that elite Silicon Valley (and now Silicon Alley, NYC) group like Jim Breyer, Ron Conway, John Doerr and Fred Wilson; you can ‘get in the know’ about what’s happening, and most importantly, be a part of something that can change the entire landscape of how we technologically live our lives! After hearing all of this, the question could easily change from “why do you want to be a VC?” to “why would you not want to be a VC?”, right? Ready to sign up? Slow your roll homeboy… it’s not as easy as you think! Continue reading →