kitter3's Profile
Train
15
points

Questions
4

Answers
3

  • Train Asked on September 7, 2015 in Deal Sourcing.

    For most people, it’s best to simply observe at first. Look at deals on sites like AngelList, FundersClub and MicroVentures.

    When you’re ready to jump in, I suggest a simple rule. Only invest in deals with a high-quality lead investor. Either a well-known angel investor or VC firm.

    In terms of angel investors, here are a few of my favorites:

    1. Tim Ferriss
    2. Fabrice Grinda
    3. Semil Shah
    4. Naval Ravikant
    5. Gil Penchina
    6. Phil Nadel
    7. Elad Gil
    8. Raj Mehta

    And in terms of VCs who invest in early-stage deals:

    1. True Ventures
    2. Andreessen Horowitz
    3. Homebrew
    4. Lowercase Capital
    5. Ludlow Ventures

    If you’re lucky enough to find a deal where any of the parties above are investing, it’s a great place to start. I’ve invested alongside almost all of them at one point or another.

    You don’t have to follow notable investors into deals, but it’s certainly not a bad place to start.

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  • Train Asked on September 7, 2015 in Other.

    They’re risky.

    But I believe if you do your homework, invest alongside top-tier investors and build a diverse portfolio of 15 to 20 (ideally more) high-quality companies, you’ve got an excellent chance of making money. And if you happen to hit a “unicorn” (a company with a $1 billion or more valuation), that’s going to move the needle no matter how big your portfolio is.

    It’s kind of like picking stocks. Don’t fall in love, especially with an idea. It takes a lot more than a good idea to grow a company from $5 million to $1 billion.

    Bottom line with early-stage stuff: Don’t invest money you can’t afford to lose. Start off slow, no matter how promising an opportunity seems at the time. There will always be others.

    Pre-IPO companies are certainly safer. Most pre-IPO companies today would have been public 15 or 20 years ago.

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  • Train Asked on September 7, 2015 in Other.

    Currently, U.S. residents still need to be “accredited” investors to buy startup equity. To be considered “accredited,” you need a net worth of $1 million, excluding your primary residence, or you need an annual income of at least $200,000 for the last two years, or $300,000 if you’re married.

    The rules are arbitrary and outdated, but the good news is they’re changing soon. If Title IV of the JOBS Act legislation goes through as planned, anyone will be able to invest as little as $100 in private startups this summer.

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