Angel Investing (1): A High Risk Activity

 

This is part of my Series on Angel Investing.

There’s loads of material on angel investing on the web. You can also dig up a slew of statistics about angel investing, angel groups, exit rates and find a bunch of charts various well-intentioned academics have concocted. 

I’d like to begin this series with one core principle that’s been driven home to me after just about a decade doing this.  It’s definitely a more simple take: Angel Investing is just another form of gambling, nothing more, nothing less.

If you're steeped in mathematics and find this statement somewhat imprecise, I'll provide a formula:

Traditional Angel Investing = Gambling

Yes of course you do your diligence. Of course you’ve assessed it like a 10 foot birdie putt from every angle.

But make no mistake. You’re simply betting on one thing:

Another human being.

I guess this is my way of saying that in my experience, nothing else approaches the importance of the leader and the team.

For the next post in this Series, click here.