Over the past few months I’ve asked a number of angel investors about their experience and strategies when it comes to angel investing. As expected, there are a variety of different approaches and outcomes. Most angels say they’ve made money angel investing, when leads me to believe there’s some survivorship bias as well as returns included from companies they’ve operated.
Here are four of the most common angel investing strategies I’ve encountered:
- Domain Expertise – looks for startups in a field related to personal background and areas of previous experience
- Bet on Previous Winners – focuses exclusively on investing in entrepreneurs that have already been successful
- Small Bets and Double Down – invests the minimum amount in a large number of startups and then invests significantly more in the winners
- Follow the Leader – takes the lead from another angel investor and follows him/her in investing
I don’t have much experience with this yet but I’m looking forward to learning more and getting a better understanding of each strategy.
What else? What are some other angel investing strategies?