5 Mistakes Rookie Angel Investors Make
Startups are exciting again. Reeling from the 2007-2008 financial crisis, investors seemed to sour on illiquid investments. Too many financially-engineered investments in derivatives and wacky mortgage products made investors feel that the game was fixed. But that’s all changed as America’s economic engine — small technology-driven companies — is revving up. Companies with big visions and ambitious growth goals are getting snapped up, merged and acquired, and IPO’d, making their early investors celebrities… and extremely wealthy. Events like Facebook’s multi-billion dollar IPO in 2012 and its subsequent purchase of Whatsapp for $12 billion in 2014 have attracted new investors seeking their fortunes in angel investing. New investors, new mistakes Many of the same rules of the game apply to angel investing, as they do to investing in the stock market. But given the fact that most startups are private, small, and closely-held companies, investors new to the asset class are finding that there is a learning curve to scale before they’re able to reap the historical returns which average close to 30% per year, according to a Kauffman study. While we have...
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