James Green's Angel Investment Experience Feedback and Personal Analysis

 Recently on Linkedin, I met a British man named James Green in Sweden. He created a very special Startup Studio (Venture Builder) called DQventures, and DQ = Don't Quit, which is to assist professionals, under the condition of having a job , how to turn a side-hustle into a business organization through continuous trial and error.

I read a few of his Linkedin posts, and they are all very usefull. And this one is a compilation of his experience in angel investment since 2012. He has invested in more than 85 companies. After sharing my personal experience, I will also share the original text of his article at the bottom of the article:

1. You don’t need to be very rich to be an angel investor.

James himself is also an entrepreneur, and being an entrepreneur definately have highs and lows, so he said: "I have invested up to 75,000 USD, and the minimum investment of 250 pounds." When learning how to be an angel investor, Crowdcube is a good platform to start with minimum investment threshold of 10 pounds. Being able to treat your own entrepreneurial projects from the perspectives of investors and entrepreneurs at the same time, and you will be able to see all aspects of the facts more completely.

For example, at the beginning, I would invest in brewing projects, but after investing a few times, I found that the upside for brewing is very low. Plus, there are always new brewing group fundraising cases, so I rarely invest in such cases anymore. 

2. James said that he loves every investment case, which is a bit counter-intuitive.

Personally, I think this is quite reasonable. From looking at the case to the actual investment, you must be emotionally motivated to invest in the moment. Even if you lose money later, you will at most lose the investment amount. According to Reid Hoffman, the co-founder of Linkedin, in an episode Podcast has mentioned: "The most heart-wrenching thing about investing in new ventures is not investing in the wrong company, but missing a good company, and then watching it grow rapidly!"

3. Try to keep the amount as consistent as possible because it is almost impossible to predict which company will succeed and which company will fail.

4. Diversify risk

Invest in at least 20 companies, and ideally invest in more than 50 companies, so try to make small investments, such as equity crowdfunding, Angelist Syndicate. Even venture capital now, start to use syndicate to make investments.

5. Equity crowdfunding is also good. James got 50/50, which is  crowdfunding versus direct investment. I am using my own money for equity crowdfunding. If we got a fund in the future, I should also join angel Clubs and invest with other angel investors.

6. Every company can fail. James has encountered founder burnout or been violently attacked. I myself suddenly became seriously ill in the process of starting a business.

7. If you want to retire within five years, it is basically not suitable for angel investment. Most of the funds are up to 10 years.

Recently, there are some so-called crypto funds to invest in new ventures. It is said that the return period is relatively short. I also recently met a Canadian venture capital that uses crypto currency to invest in a profit-sharing model. You may ask me if you are interested. 

8. James has had two disruptive investments that could completely change the lives of their entire family.

I haven't encountered this one yet, but this kind of fate can be met but not obtained, so the more angel investment, the better.

9. You are bound to lose money, so remember to invest your spare cash

10. Focus on low marginal cost items such as software and media.

I personally think this part is very vague and should be judged based on experience. For example, if it is a good IoT company, it is very likely that it seems to sell hardware, but in fact the core is software services, so if I explain this sentence, I will say It is to invest that the customer lifetime value can continue to grow, but the cost is controllable and manageable.

11. The power law applies equally to angel investment or venture capital investment. When a unicorn appears in the portfolio, there will be wind when walking, so remember to spread the eggs into multiple baskets.

This also applies when establishing a core team, so the earliest or core 10 people in the team basically determine the future of the entire company. For example, whether it is Google or Apple, the core code of their company is composed of a small team. Written by a group of top engineers.

12. Focus on the investment track of venture capital fairs, because the return on the stage should be high enough, almost all of them hope to have venture capital, but there are not many companies that will actually be invested by venture capital.

13. Data shows that it is recommended to invest in more experienced entrepreneurs.

14. It is recommended to invest as early as possible. It will be better if you can get the equity of the founding team. Although the company generally does not perform very well if it sells for less than 15 million US dollars, if you take the equity of the founding team, it could still change your life.

If the founding team is all Taiwanese and the target market is in Taiwan, I will be full of doubts about this. The post-epidemic era is the best opportunity for individuals to expand the international market in the history. If you happen to start a business recently, so why not target the international market from the start?

15. Don't be a founder unless you can't help it; James is still the co-founder of DQventures, but this path is really like what Lei Jun said: "Entrepreneurship is not something that people do, it's something that cats and dogs do!"

Here is the link to share the original text:

https://bit.ly/3Fnn7A5