Last week I was catching up with a friend and he said he could never be an angel investor as he’s too worried the investment would fail and be worthless. I offered up that most angel investments fail and it’s better viewed as charity that helps entrepreneurs. Thinking more about it, investment failure doesn’t bother me for several reasons:
- What Could Be – Investing is a leap of faith that there’s an opportunity to build a great company.
- Opportunity to Learn – Every deal is different. Every market is different. Every entrepreneur is different. There’s so much learning with each investment.
- Paying it Forward – Helping entrepreneurs is a core value for me. It’s what I enjoy doing.
- Upside > Downside – If we succeed, the return could be 10x or 100x the original investment. If we lose, the downside is only the original investment.
Investment failure as an angel is never fun but the enjoyment and potential upside outweighs the risks.
What else? What are some more thoughts on investment failure as an angel?