Thoughts on startups by investors that
fund them & entrepreneurs that run them

As a new independent angel investor, how will I find new companies to invest in?

The two sites you mentioned are both secondary listing services, for later stage companies. For a new angel investor, by far the best thing to do is to join a local angel investor group that belongs to the Angel Capital Association. There are hundreds of them, with at least one in every state. Major metropolitan areas typically have more than one.

Some groups specialize, investing primarily in life sciences or tech companies or women-led ventures or other areas. Some are wide open, investing in everything from real estate to films. Most are somewhere in between, focusing primarily on early-stage, high-growth companies with scalable business models. These are typically Internet-enabled, or consumer products, or medical devices.

But regardless of the specifics, what they all have in common is bringing together a group of active Accredited Investors interested in supporting young startups. Benefits of joining a group include pooling deal flow, capital, domain expertise, and investing experience. Most groups run regular education sessions for new members, and provide mentoring for less experienced investors by those with many deals under their belt.

The typical US angel group will receive a dozen or more funding applications from startups each month; the most active ones, such as New York Angels will receive over 100. Groups also often “syndicate” investments, working cooperatively to fund larger rounds that are bigger than one group can easily handle alone.

As a very rough idea of what these groups are like, the typical member invests in one or two companies each year, putting in $25,000 to $100,000 in each one.

To find one or more local angel groups near you, use the industry’s official investment group search engine at http://gust.com/find-investors.

And for a more in-depth view of angel investing, check out Angel Investors: If I want to invest $5,000 as a new angel investor, what chances do I have of making a profit in 5 years?.

 

*original post can be found on Quora @ http://www.quora.com/David-S-Rose/answers *

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Written by David S. Rose

user David S. Rose Founder and CEO,
Gust

David has been described as “the Father of Angel Investing in New York” by Crain’s New York Business, & a “world conquering entrepreneur” by BusinessWeek. He is a serial entrepreneur & Inc 500 CEO who chairs New York Angels, one of the most active angel investment groups. David is also CEO of Gust.

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