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How to Become Successful Angel Investor: Top 10 Mistakes to Avoid

When we talk about entrepreneurship, we often emphasize on the mistakes that the entrepreneurs make and the consequences these mistakes bring to their startups. But making mistakes is very common thing not just in entrepreneurship, but in the business world in general. Failure is the only certain thing in the uncertain path of every entrepreneur, yet the most valuable lessons are learned through it.

Angel investors can also make mistakes and these mistakes can cost them a lot of time and money. So, what can a novice angel investor do in order to avoid dramatic mistakes and improve their investment experiences? Luckily, some of the most experienced investors share their knowledge not only with entrepreneurs, but with other investors as well. During Startup Turkey 2015 event, that was attended by world class investors, mentors and advisers, David S. Rose, CEO of the startup funding platform GUST and one of the speakers at the event, shared with the audience a list of the top 10 mistakes that novice angel investors make.

Top 10 Novice Angel Mistakes according to David S. Rose:

  1. Investing in one of the first deals they see
  2. Not doing thorough due diligence
  3. Investing outside of their domain of experience
  4. Investing at too high a valuation
  5. Investing on an un-capped convertible note
  6. Signing the company’s documents without having a lawyer review them
  7. Not reserving additional capital for the inevitable follow-on round
  8. Investing in fewer than 20 deals
  9. Becoming an angel with no long-term commitment (10 years or more)
  10. Dragging out the investment process unnecessarily

davidrose

─ March 2, 2015