Tech Investing Alongside an Expert

In the past couple of weeks, three different friends have reached out for assistance in evaluating a potential private tech investment. In each case, these individuals are not tech investors, nor are they investing alongside an expert. Typically, these opportunities emerge through connections like a friend of a friend within a civic group or a social club. Being a cool tech startup idea, it’s easy to get excited and want to write a check.

My recommendation:  invest alongside an expert that has done similar deals in the past. 

In instances where no experienced investor is simultaneously committing under the same terms, work to find one. Much like the Lemon Law, there tends to be an information asymmetry in selection. This implies that when professional investors have opted out of an opportunity, it increases the chance it’ll get to a non-professional investor. This particular investment could potentially be the one-in-a-thousand home run or, conversely, it might be a dud. Part of the fun lies in dreaming about the possibilities.

When the next angel deal or private tech investment opportunity arises, find an expert and get them to invest alongside.