Welcome to the World of Angel Investing
Congratulations, you’ve “made it”!
As a potential Angel investor, you are a high net worth individual who is qualified to be an Accredited Investor. Kudos – you have made it to the stage in your life when you are permitted by the Canadian government to invest in opportunities outside of the public equity markets without the required use of a broker. These investments are typically higher-risk with higher potential for reward. The good news is that you are now allowed to make private Angel investments outside of the normal public stock markets. You don’t need to spend money on management expense ratios or brokerage fees. The bad news is that the government permits this because it thinks you are smart enough to do all the work yourself and wealthy enough to afford losing all your money in these investments! This book will help you manage this risk and improve your potential for a good return on investment (ROI). It will help you find good opportunities, structure good deals, grow good companies, determine good exit strategies, and manage an investment portfolio, to maximize your chances of gaining high investment returns on your Angel investments. If you do it right (and maybe get a bit lucky), your Angel investment portfolio can achieve significant returns. The average US Angel participating with an Angel group achieves 27% annual return on their portfolio of Angel investments. However, in order to achieve this return, the average Angel will have to wait four to eight years to get their money through an exit event, such as the company being acquired or going public. (Wiltbank & Boeker) Risk vs Return for Angels
Angel investing
Venture capital
Private equity
Small caps
Emerging markets
High-yield and emerging market debt Large-cap value Large-cap growth
Domestic government bonds Investment grade bonds Real estate
Short-term treasuries
Real Return = 0%
Cash in the mattress Cash at the bank
Risk
8 A Practical Guide to Angel Investing
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