

Five Common Myths of Angel Investing - wave
http://blogs.wsj.com/independentstreet/2008/10/23/five-common-myths-of-angel-investing/

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olefoo
I'd add a number 6.

Angel Investors are competent negotiators.

I just lived through a startup where the board, led by the Angel Investors
representative turned down a multi-million dollar offer because they thought
they could get a better one. (They were wrong.)

So instead of getting their money back plus a bit, they are losing it all and
trying to recover it by trashing what's left of the business.

Eventually I will write my blog post on "More tales of greed and incompetence
on the electronic frontier."; right now I'm too busy picking up the pieces and
making sure that our customers aren't going to be left stranded when we fold
up the circus and put it away.

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netcan
I think that this post along with similar ones I've seen (eg Guy Kawasaki) are
misleading in a sense that they define the Universe of discourse more widely
then the 'Myths.'

I imaging the majority of Angels described here just would not meet normal
definitions.

Median investment $10,000, 92% friends & family, fewer than 5% go on to get VC
money.

These are statistics about a (seemingly) very wide category of investors.
Since most of these are not relevant to those that take these 'Myths' into
consideration, these stats aren't really worth that much.

What would be interesting is to hear about the 10, 5 or 1% of those that are
'angels' in the sense that they do conform to the 'stereotype.' How many of
them are in groups? How many of them are around? ...

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wheels
It sounds like they're defining _angels_ differently than is typically meant
around here. This sounds more like a write-up of asking your rich uncle for a
push. That said, it's nice to see it as a counterpoint to some of the
conventional wisdom.

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pg
Yes. There two senses of the word "angel:" people who invest in private
companies, and a narrower sense meaning people who invest in startups. A study
of the former will yield a portrait of an investor very different from the
latter, who are a tiny minority of the total.

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13ren
Article's definition of "angel investor" includes "friends and family" (which
they claim make up 92%, in myth #5). Whereas I think of investors as:
founders, friends/family, angel, VC rounds, IPO.

I think the other myths are more true of angels, if friends and family were
excluded from the definition.

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mixmax
Interesting article, but some numbers would be really great.

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known
Stock Markets = Zero-Sum

Angel Investing = Not Zero-Sum

