Keeping Track If you are trying to maintain a portfolio of companies, it can quickly become a titanic task to monitor all of your investments, yet this is one of the only ways to stay disciplined about your investing. It is for this reason that tools such as Hockeystick (www.hockeystick.co) have been developed – by a serial Angel investor no less – endorsed, and used by Angels and organizations such as NACO. — Bryan Watson , Partner, Flow Ventures 1.4 Value Investing vs Momentum Investing Angels should consider whether they are going to take their time to look for long-term value or try to catch a wave with momentum investing to get in on a hot deal. The NACO Academy modules emphasize the value investing approach, but there are other approaches that can also provide good ROI. In Startup Wealth: How the Best Angel Investors Make Money in Startups , Josh Maher classifies Angels into three different types of investor: value investor, momentum investor and alternative investor. In some cases, quotes from different types are so at-odds with each other that one can hardly believe each can be classified as an Angel. When hearing conflicting advice from successful Angels, consider that they might be speaking from different camps. “One of the biggest dichotomies right now is there’s this rift between this somewhat consumer-led, consumer-mobile kind of deal flow that is prevalent in Silicon Valley [momentum investors] and the rest of the world [value investors]… [Momentum deals] are like popularity contests and it’s all about moving fast… [Value investors] are trying to find great teams and great opportunities at good companies – need-to-have products, rather than nice-to-have products… and then – and this is crucially important – help the companies afterward.” (Christopher Miribile, in Maher) The momentum approach recognizes that at times there is competition for the best deals, and the meta-trend is that it is becoming easier and easier to find smart money. So the best entrepreneurs may have lots of choices and get the most money from the best investors. The only way to get in on these great deals is by being better- connected, writing cheques faster, and/or offering better deal terms. Some Angels view each deal independently and assess whether the deal itself requires a momentum, value or alternative approach.
26 A Practical Guide to Angel Investing
Powered by FlippingBook