How to become a secondary angel investor

I'm planning to become an angel investor but during the initial stages dont want to be directly looking over all the operations.

Thus looking for something like helping another angel investor,so that person can take care of most of the operations and in turn would help me also learn the tricks of the trade.

So, how can I become a secondary angel investor?

Investors

asked Nov 25 '12 at 18:43

Rock Win
16 points

Get up to $750K in working capital to finance your business: Clarify Capital Business Loans

2 Answers

Perhaps this would be of interest.

Angellist just announced a new service - Angellist Invest - which allows accredited investors participate in a "party" investment. Minimum raise is $150K - Investments can be as low as $1K. There is a lead investor assigned... details on the program can be found in this Techcrunch article.

answered Dec 20 '12 at 08:40

Jim Galley
9,952 points

Stole my words. I however do not know how one becomes accredited. – Bhargav Patel 12 years ago
http://www.sec.gov/answers/accred.htm defines what it means to be accredited (in the US, at least) – Jim Galley 12 years ago
Well I knew that but I don't know what I can do to qualify. I am 19. They only require you to invest $1000. Edit: By #4, if you are owner of a company.. are you considered accredited or have I misunderstood the point. – Bhargav Patel 12 years ago

Angel investors are hands on folks. Angels are probably the most expensive way to raise capital next to getting money from friends and family. The reason most angels do so well is because they are hands on.

Having said that, there are Angel groups all over the country. If you dont have the time to dedicate to investing, but just want to grow your money, I suggest you attend some of these events. Sometimes you will find a startup that really does not require the coaching but is in need of startup capital. An investment with a startup that is already got the wheels turning but only needs "growth" capital might be a good fit for you. The more mature the company, the less risk, and thus less return.

Making friends with other angels will help you out, but these guys are not investing their time for charity. If they are using your money for an investment, then trust me they are going to take a cut of your earnings.

Investing in inventory is another option. For example, giving angel loans to small car dealerships may be a safe bet, because you are not investing in the physical business, but rather are investing in inventory of which you can hold titles as collateral for your loans.

Last, and easiest option is to give your money to a VC firm and let them make money for you. Wont give you the highest return, but its probably a very safe bet since its going to be spread among multiple ventures.

If you have 250k + to invest, then you may consider hiring an experienced CFO or someone with good Entrepenuer expereince to help manage your startup investments.

answered Nov 27 '12 at 20:24

Frank
2,079 points

Thanks for explaining the scene with the Angel groups,Couple of things: The Car dealership example - are you suggesting something like lending money/giving personal loan to people who want to buy car (or similar) and rather than a bank I finance it through this shop dealer? Typically how much should one have to give money to the VC firm? – Rock Win 12 years ago