Ask HN: How do I start investing in startups?

[throwaway113344]

Throwaway account...obviously.

Over the past 6 or so years I have made some decent money doing various Internet consulting, contracting, and salaried jobs. I am very knowledgable about the startup industry and like to think I can determine winners vs. losers with regards to early stage startups. I also know the areas of interest to me very well (local/geo, cloud, and online advertising).

My question is this: how do I get into investing in startups? I will be upfront and say I don't have nearly as many connections as typical angel investors, but I do have money to invest.

What is the best way to begin finding companies to invest in and actually investing in them? I would like to invest between $10k and $20k in a couple startups. What is the process to go about doing that? Are startups looking for someone like me who may not have as many connections? Are there startups that are looking for this amount of investment? Am I crazy to even consider this?

Thanks in advance!

[SwellJoe]

Are you a high net worth individual? If not, don't bother. Companies can't afford to take your money, as it's way too much trouble to deal with the regulatory hurdles for a few grand.

If you are a high net worth individual, invest in a few YC companies. That'll get you an invite to the next demo day, which will introduce you to the best investors in the valley.

[throwaway113344 → SwellJoe]

Can you give a little more insight into what you mean by dealing with regulatory hurdles? How does taking the same amount of money from one person vs. another change the cost to take that money? What's the minimum amount of investment that would make it worthwhile to take money?

[throwaway234234 → throwaway113344]

I'm the same as the throwaway later in the thread (forgot my password). Can you please write to me at 5YER414bfi5G@meltmail.com -- it goes straight to my real e-mail address and we can continue from there.

[throwaway245235]

Hi, so people here say you have to be a very high-net-worth individual, etc. That's probably true for investing $20k in a speculative startup. What I have is a mundane business, it is a physical shop which needs some expansion, however it is already the second shop we've opened. It makes very good use of capital, there's just very little of it (this is in a developing country); if you would like to talk about floating $3000-$5000 or so, please give me a call by first writing to this disposable e-mail for my number: 5YER414bfi5G@meltmail.com this address will "melt" in 24 hours. We can probably work out extremely good terms for you, as like I said at this small stage we are making really good use of capital. Anyway a phone call won't hurt - you can at least have a perspective on something more mundane and have an interesting story to tell.

[markca]

You should read Paul's article first... http://www.paulgraham.com/startupfunding.html

AngelList, connecting startups and investors http://angel.co/