Throughout history, startup capital has driven the growth of major brands we’ve come to know and love today. Take Google for example — this giant controls over 68 percent of searches made on the internet, employs over 70,000 staff across the globe and is now worth $527 billion. Google’s earliest angel investors ultimately set the company on a fast-track to becoming the most anticipated public offering since the dot-com bubble burst.
Like most successful startups, early investors bring so much more to the table than just the money — it’s their connections, advice and endorsement that make the biggest impact. Seven years ago, I began my own journey as an investor. I stumbled upon a golden opportunity to get involved through an angel group, which is a conglomerate of high net worth individuals that review, assess, mentor and invest in local startups.
When I think back to the first investment I made in 2010, I realize that I had a lot to learn. It was an early-stage drug discovery and diagnosis company using shark antibodies that piqued my interest. I essentially rolled the dice after receiving an exciting pitch from the founders and watching my peers react positively. Admittedly, I thought the idea sounded cool.
But, investing is less about gambling and more about making calculated decisions. I quickly realized if I continued to invest based on the same set of criteria, let’s just say I’d be in a very different position. As an entrepreneur and an ideator, I’ve been on both sides of the discussion. I’ve identified big problems and built companies to solve them, while also seeking out startup partners to invest in — players who have passion, ambition and the dedication to see it through.
Whether you’re an entrepreneur thinking about where to place your next investment or a passionate startup seeking capital funding, here are the five rules I live by:
1. There’s safety in numbers.
If you’re new to investing, start by finding and joining a local angel investing group. My Australia-based angel investment group had access to good deal flow and provided ample opportunities for exposure. They brought like-minded people together that matched domain expertise with each investment opportunity. For startups, investors and accelerators, try searching for a local group in your area with Gust.