
Ask HN: Getting Started Investing - wantrepevestor
I, like probably most of the people here, want to someday build a product and sell it. But, until I can come up with an idea I believe in I would like to invest in other people&#x27;s ideas. I&#x27;m a well paid independent consultant and have $100-150K yearly profits that can be used for investments.<p>My problem is getting in touch with startups to invest in. Investing through AngelList, but I unfortunately do not (yet?) meet the requirements to become an accredited investor.<p>Is $100-150K yearly enough to get started? Do I have the &quot;buy in&quot; necessary to join a fund?<p>Any real life advice on how to get started would be greatly appreciated. I&#x27;m based in western Europe btw.
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icedchai
Do you really want to invest in early stage, high risk ventures that have a
low probability of return? Open a Vanguard or Fidelity account. Buy index
funds. Invest regularly. In 10 - 15 years you'll have a small fortune.

~~~
badfrog
> In 10 - 15 years you'll have a small fortune.

More specifically, if you invest $150k per year for 15 years and get a 7%
return, you'll end up with right around $4 million.

~~~
bad_good_guy
What percentage of people, even in this industry, can afford to invest 150k a
year?

~~~
icedchai
150k would be nice! Personally I was investing over 50K/year for 10+ years.

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gshdg
Do you want to invest, or to gamble?

At your level of available funds, investing in startups is gambling, because
you can’t spread your bets widely enough to hedge them and increase the
likelihood that gains on one will make up for the losses or break-even on the
rest.

If you want to _invest_ , I recommend index funds.

~~~
dehrmann
> If you want to invest, I recommend index funds.

This. I've gotten this question from family, and the answer's just pair VTI
and BND at some ratio you're happy with (or buy a target date fund) and wait.

~~~
o-__-o
Very weird time we are in right now. US Markets at all time high, stronk us
economy, faltering global outlook, plus tariffs. Market may go to the moon, or
it may collapse.

That ratio needs to be tweaked at least monthly maybe bimonthly through the
rest of this year (lots of uncertainty coming up)

~~~
darkteflon
The times are always weird. You’ll be perpetually waiting if you’re waiting
for stuff to get “normal”. Absorbing the essential truth of this is part of
the zen of indexing.

Nobody knows what outcome you’ll get, but indexing is a solid process. That’s
all you can do - maximise the quality of your process. Anything else is noise.

~~~
o-__-o
We’re at all time highs, is the market going up or down? You have an increased
risk here because the wrong decision can be decimating (short the market and
it continues to rally, or buy the market and we’ve hit the top). Nope I would
wait for a confirmation signal and act on that. Even long term investing, you
should have an edge never invest and withdraw blindly.

~~~
darkteflon
Unless you are a PhD in finance working at one of a handful of the world’s top
money managers, I guarantee that what you confidently refer to as your “edge”
is gonna end up poking you in the eye. Age and experience will teach you that
if you let it.

~~~
o-__-o
Or maybe age and experience has seen this before and went balls deep in ITM
calls after the market washed out 100+ points. I mean if you reread what I
said, it’s spot on to what happened over the last few days

But keep thinking a paper giving you a title with some mixed case letters
makes you a top money manager and that no one could have possibly avoided a
40% loss during 2008

Also an edge can simply be moving averages which has a proven backtest but
there are a lot more analytical tools that exist today

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formercoder
These days there is too much money and not enough places to put it. It’s
difficult as an unconnected angel to find decent opportunities. If you met the
threshold to invest as an LP in a fund that would keep you diversified and the
GPs would have access that you do not.

~~~
tw1010
But there's clearly a lot of people who still seek funding but can't find it,
so how does that mesh with the idea that "there's too much money and not
enough places to put it"?

~~~
charlesdm
Because most people doing things are not worthy of investment (i.e. crappy
ideas, bad execution, not ready for investment, etc)

~~~
o-__-o
Again way too many barriers to entry. I just need $100k to prove my idea.
These funds have billions. They won’t lend 100k because it has a prototype
app, a handful of interest, but no investor pitch? But they will give $1m to
someone who can pitch a dream with no product?

Please come to me with $100k and I’ll offer you simply a guaranteed 0% return
(no loss on investment) so I can pad my bank account and make “real” investors
interested because it makes us look like we can manage our money.

It’s all smoke and mirrors and I wish I could get access to the same cheap
money big corps get. $300k at 6, 7, or 10% interest is just robbery when
public companies and home owners are walking away with 2-3% APRs

~~~
charlesdm
Lol dude, "just" $100k. Barriers to entry? Totally honest: I'm an investor and
I wouldn't invest $100k in you with a mentality like that. We're all in this
to make money.

What you need is to prove your idea. No one is going to put $100k (or $100
million for that matter) in an untested idea, unless you have a relationship
with an investor. And investing is a relationship business.

If a friend whom I trust and I know is a talented chef comes to me with a
restaurant idea, I'll consider investing. If a random person comes to me,
there is <10% chance (unless his food is absolutely amazing in every regard)
that I will consider investing.

I'm happy to invest in a good tech business. But most things that I see just
aren't great businesses.

You're likely in the US, but many EU countries have investment entities
(generally funded by EU funds) that "give out" loans at 3% APR. If you want
it, you can get it done. But there are very few barriers to entry. A good idea
in need of funding will find funding.

~~~
shifto
Might be a bit late but do you have some more info on these EU funds? I'm just
a very technical guy but somewhere on the horizon there will be a point where
our proto is matured enough we probably should seek some funding if we want to
do something with it. Thanks.

~~~
charlesdm
I'm not up to date on the particulars for each country, but where are you
based? Happy to help if I can.

~~~
shifto
I'm based in the Netherlands. After my post I went searching and found we have
a "early phase funding" from the government.

[https://www.rvo.nl/subsidies-
regelingen/vroegefasefinancieri...](https://www.rvo.nl/subsidies-
regelingen/vroegefasefinanciering-vff)

~~~
charlesdm
Also this [https://www.rvo.nl/subsidies-
regelingen/groeifaciliteit](https://www.rvo.nl/subsidies-
regelingen/groeifaciliteit)

~~~
shifto
Thanks for helping! :)

------
paulriddle
Martin Shkreli said $100k is not enough money to start investing, you can't do
anything with such a low amount. The reason for that is because investing is
competitive, you have to make smart decisions. To make smart decisions you
have to spend a lot of time and effort evaluating companies you want to invest
in. If you actually spend this time and effort, you won't have enough time for
anything else. With your $100k you will be happy to make 10% in one year, so
it's $10k per year full time.

You need millions of dollars, then it starts being worth it. You should listen
to Martin Shkreli, even though he is in prison for fraud, because he knows
more about investing than almost anybody here on HN. Most people on HN will
not be able to record 1 hour video talking about investing, let alone 35+ of
them. They don't have the stamina and knowledge. They also don't have the
results to back up their advice, unlike Martin Shkreli.

It seems foolish to think that you can spend just a few hours per week and
think you're going to beat the market.

I don't want to insult anyone, I myself don't know much about investing. The
reason why I mention Martin here is because his videos on youtube are very
accessible for layman people who are uninformed about the market.

------
sourcepath
This book by Jason Calacanis is actually pretty good for beginning angel
investors. Worth the read.
[https://www.angelthebook.com/](https://www.angelthebook.com/)

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startupdiscuss
Have you considered getting your start by investing in micro cap tech stocks?

The transaction is much easier. You get all the risk of total wipe out you may
crave. But most importantly you get a lot more information and that might help
you get practice.

The most valuable practice is when you think a company has a great strategy
and is a no brainer and it shuts down. Or when you do a lot of work and invest
in a rocket ship only to notice that Facebook would have been a better
investment.

~~~
icedchai
Do you want him to lose every dollar? Most penny stocks are garbage. Generally
low volume, occasional pump-and-dump scams, fake news from paid stock
promoters, etc.

~~~
startupdiscuss
So you’re saying it great practice! Do a study on the survival rate of the
average AngelList offer.

I didn’t say penny stocks. You can try names you know and like: SMAR, SSTI,
PS, etc

~~~
icedchai
You did say micro cap though. The ones you list are really small caps...

~~~
startupdiscuss
You’re right.

------
ChefboyOG
If you're committed to investing in startups (as opposed to index funds/real
estate), I'd recommend checking out AngeList's spinoff
[https://republic.co/](https://republic.co/)

Their startups raise crowdfunded equity rounds that you can invest in for
smaller amounts without meeting the requirements for being an accredited
investor.

~~~
pedrorijo91
looks similar to seedrs [http://seedrs.com](http://seedrs.com) (which was used
by revolut to get investment AFAIK)

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cerberusss
Have you considered other types of investment that are more liquid, like
stocks, bonds, commodities, or real estate?

If so, did you gain experience with them? Why or why not?

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pjc50
Find the startup places: conferences, meetups, etc. Be somewhat discreet about
saying you have money to invest, that's a good way to get scammed. Basically
you need to social-network the hell out of the place so you can get good
startups to come to you. You may also need to provide some additional benefit
to startups - domain knowledge or contacts about something of value to them.

Eventually you will find the other angel investors in your area, and
collaborate with them.

$100k is probably enough to build a small software product, especially if you
can find a tech co-founder who is putting in sweat equity. The process of
doing this will teach you a lot even if you never make back the $100k.

------
charlesdm
Can you? Yes. But it's going to be like taking a second job, because sourcing
good deals is hard and a lot of work.

If you want to deploy a few 100k, your best bet would be to invest directly
into a private fund -- if you can find one that is in need of capital. One
fund manager I know with a small 50m fund takes tickets starting at 100k when
fundraising, for example. So X00k should be sufficient to buy in.

Which country btw? Some countries offer tax advantages to investors as well,
depending on how you invest.

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skrebbel
If you're in Western Europe, why does that weird USA regulation about
"accredited investor" matter to you?

I run a Dutch startup. As far as I know, all our (also Dutch) angel investors
did was:

    
    
        * Sign papers
        * Transfer money
    

So unless I'm missing something, and if you're serious about doing high risk
investing, it's just ("just") a matter of finding good startups that are
looking for money.

------
darkteflon
The objectively best advice you can get is to buy index funds - either ETFs or
through a Vanguard account. This will give you the highest probability of a
favourable outcome over the long term.

Unfortunately people also find this advice to be too boring and therefore
usually ignore it. I expect that’s what you’ll do, too - no offence intended.

Best of luck!

------
andreshb
If you are in the U.S., wait until you become accredited and have enough
excess cash that you can do this part time.

Otherwise, make this your full time job and make sure you have enough income
to wait 8-10 years before you start seeing return.

You can also invest in a first time fund, where the manager will charge 2%
management fee and 20% carry (success fee).

Getting access to entrepreneurs depends on your geography but generally if you
make yourself useful to entrepreneurs, with or without investing, you can
start generating dealflow.

Start with small checks, you will mess up in the beginning, so make these
mistakes less painful.

Read venture deals and watch all the videos from YC investor school.

~~~
tedmiston
Startup Investor School links for the curious:

\- Videos:
[https://investor.startupschool.org/](https://investor.startupschool.org/)

\- Blog post: [https://blog.ycombinator.com/startup-investor-
school/](https://blog.ycombinator.com/startup-investor-school/)

------
tjbiddle
As others have stated, you really likely shouldn't be investing in early-stage
startups at your level of capital.

Read all of the content available on /r/financialadvice /r/investing and
/r/financialindependence

------
ronreiter
You can't start investing in start-ups and expect to hit the good ones without
excellent access and knowledge. You will almost certainly lose all your money.

Invest in the S&P 500 using an index fund, that's it. Investing in the S&P 500
is another way of investing in "the world's economy", and that will,
hopefully, go up over time. And if it goes down, then at least you're not the
only one who lost money so your money will be worth as much as it used to
anyways.

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rcar1046
[https://www.seedinvest.com](https://www.seedinvest.com) is really good for
this. They are the best at vetting companies and only allow a small amount
(something like 3 out of 1,000) companies that apply raise funds through the
Reg A (and other various regulations passed in the JOBS Act) exemption and I
believe these are now available to accredited and non-accredited investors in
some form.

------
monkeydust
That's enough to start Angel investing in in the UK at least. My first round
clip size is about 25k and I keep some back for the invetible future funding
rounds. Being doing this for around 4 years and looking at my first exit next
week (about 2.5x net). Learnt so much aside from any money I might make and my
contacts list has exploded. Reach out if your UK based and want some some
tips.

~~~
matallo
Hey, not OP but I’m interested (London based). What’s the best way to reach
out?

~~~
monkeydust
email addy on my hacker news profile.

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hkmurakami
What are your goals for your investing? What does it help you do in your life
in 5 years, 10 years, etc.

Usually these answers won't fit in ski well with startups as an asset class.

Also you're right. Startup investing is all about deal flow.

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obayesshelton
Do you see yourself ever needing some of that money in a short period of time
e.g. 2-4 weeks? As you move away from listed equities to alternative assets
access to that money moves from days to a decade.

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IdiocyInAction
As another person based in Western Europe who would want to start investing, I
would also like to ask for good resources. Particularly for a long-term
outlook.

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anonuser123456
If you want to someday build a product, save your capital and use it to seed
your future company. In the meantime, put it in US Treasuries or munis.

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rscho
Also western Europe. If you've got no clue, index funds is pretty much the way
to go.

Otherwise read. A lot. BEFORE making decisions.

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LMo
Early to the game myself but my sense is that starting with syndicates for the
first ~10 investments is the way to go.

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jimmy_l
If you would like to discuss investing feel free to contact me through Reddit,
/U/Jj_leahy.

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hernantz
Why not going to a hedge fund?

~~~
obayesshelton
doubt anyone would accept such a small amount.

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easymodex
I unironically suggest cryptocurrencies.

~~~
F_r_k
Contrary to the stock market, Bitcoin _is_ a zero sum game.

~~~
tw1010
Could you expand on that please?

~~~
dehrmann
First, there's no intrinsic value. If a healthy company's share price drops to
zero, I'll buy up as much as I can, making a profit on just its cash reserves.
Bitcoin isn't "healthy" (or unhealthy); it doesn't hold assets; it _is_ the
asset.

Second, companies (hopefully) generate value and return it in buybacks or
dividends.

It goes a little bit beyond your question, but Bitcoin on its own doesn't
create value in the same way a company does. Investing in Bitcoin is much more
like buying Turkish Lira.

------
hanniabu
The best startup to invest in is Bitcoin

~~~
DJBunnies
Just double check your offsite backup strategy!

------
Temasik
BitCoin wants to replace Aws
[https://twitter.com/_unwriter](https://twitter.com/_unwriter) if you are
interested

