Angel Investing 101 💰

Angel Investing 101 💰
What is angel investing?
How to invest in pre-IPO companies
Angel investors put their own money into early-stage startup companies.
This is the first in a series of episodes on becoming an effective angel investor / venture capitalist
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Lance Cottrell has been an active startup advisor and startup mentor for over a decade.
He has helped countless startups navigate the key decisions of their journey, like when to take venture capital investment and negotiating term sheets.
He works with many companies in accelerators like Y Combinator and Founder Institute.
He provides help with startup funding including raising venture capital and angel investment.
He can help you achieve liquidity for your company at a high valuation.
Feel the Boot is a startup vlog of tips and advice for early-stage founders.

[@FeeltheBoot]

Sign up for my newsletter to access my office hours. ftb.bz/join

[@joespear3581]

Founder of 2 different energy companies, struggle is real.

[@FeeltheBoot]

I see that struggle all the time in my advising. I also felt it first hand as a founder.

[@rampageskys5543]

​@@FeeltheBoot hi do angel investors get paid annually or monthly is the business begins to grow

[@FeeltheBoot]

@@rampageskys5543 In general, angel investors back companies with the potential to achieve a $1B valuation. They only get paid when the company goes public or is acquired. With companies that don't have that potential, they often receive a share of the profits. Those payments can be at whatever frequency works for the company and investor.

[@miguelangelramirezchavarri3801]

What is the expected percentage of return on investment (ROI) for investors in their companies, or what percentage of ownership in the company is typically offered to investors through shares?

[@FeeltheBoot]

Angel investors are hoping to make 25% per year on their whole portfolio. Most don't achieve that. To make those returns, every investment needs the potential to return more than 20 times the initial investment. Most investment rounds sell 20-30% of the company ownership, although that is usually divided among a number of investors.

[@DearDesignCoach]

I am a founder who just found your channel and I immediately liked and subscribed. Being in the early stage (prototyping) is a very humbling and lonely stage... but listening to your content helps a lot.

[@FeeltheBoot]

Thanks, great to hear!!! Best of luck with your startup! It can be lonely, so look for a community where you can. The entrepreneurial ecosystem is generally very warm and supportive.

[@GilaRappaport1020]

About to start A.I. pitch & search for my startup (In my opinion brilliant niche need that doesn't exist in our world). I'm filled with dread after watching this clip. Probably a common reaction for the ambitious, highly skilled in their particular field, with zero experience raising capital? A.G. Bell must have felt the same way! Thank you, Lance for sharing your expertise.

[@FeeltheBoot]

Best of luck on your fundraising! It is hard work. I have a bunch of episodes on pitching specifically and fundraising more generally.

[@ruialexandre2000]

Hi. Thank you so much for sharing... But i have a question: Do angel investors invest in real estate companies too? To they invest outside of their country? Thank you

[@FeeltheBoot]

It varies, but many do invest in both startups and real estate. Most angels I know prefer to invest within their country, but certainly not all.

[@antextra300]

Thanks Lance. I look forward to this series. Most people are so removed from the angel crowd and it is great to peek inside the brain of Angels. Also, thank you for your time and advice with your "office hours" It really helped me!! Keep up the great work!

[@FeeltheBoot]

Thanks, I appreciate the feedback!

[@humannatureunleashed]

But couldn’t you get dividends (or pay out on the net profit) on your angel investments like the car wash example you gave?

[@FeeltheBoot]

Most investors see those as very different types of investment. When I am angel investing, I expect potential 20X or more returns and 80%+ failure rates. If I was investing in a revenue share deal (or dividends) I know the payout will be much lower and I would need to see that the risk would also be much lower. The second type of investment would generally not fall under the "Angel Investment" category.

[@mauricemickel9131]

Hi Lance, what is the title for the next episode following angel investing 101? Thank you

[@FeeltheBoot]

It is "How to Start Angel Investing" the whole playlist is here kzbin.info/aero/PLgMU_ie96T-JQvKDM2T7TyMllHDTAN3Kd

[@bigbanknewyork3655]

Convochat is now entering seed stage.

[@jazzthewayyoulikeit]

How do I find a legit Angel club to be a part of?

[@FeeltheBoot]

The best place to start is angelcapitalassociation.org/ They have a list of almost all the angel groups in the world. Look for local groups that reflect your interests.

[@Potencyfunction]

You go at investing and finacial education and after you buy all what is behind and try to stick in your life while they did not give u a single cent. What is the meaning of staying in someones wellfare? Are u all screw up in the brain ? First of all I will never gather with mental delayed jerks. What they are talking about ? when u go to make business u say clear what is the goal. All the dhakers can suck it-

[@neilpike6758]

I have £60k to invest into my business relaunch plan. I seek two one third partners to help make a good exit in four years with a minimum of 800% mark up. I can present the details quickly if you can put me in front of other investors. My alternative is the slower route which would be boring and a relative waste of time.

[@FeeltheBoot]

33% of the company for ￡60k suggests a valuation of ￡180k, which is wildly low. It is just about as hard to raise a small amount as a large one. I don't know of any significantly faster paths to funding.

[@MuhammadBilal-rn5wh]

Hi Mr how do you do Is there any ipos available even by today

[@FeeltheBoot]

IPO activity is slow, but they are happening. However, they are typically not available to non-institutional investors.

[@allysegraben2196]

Awesome! Thank you

[@FeeltheBoot]

You bet!

[@SweatYourAssets]

Great intro

[@FeeltheBoot]

Thanks!!

[@ReeInvesting]

thanks for this

[@FeeltheBoot]

You're welcome! Are you just getting started as an angel?

[@SkyDogSocial]

Useful content. Thanks!

[@FeeltheBoot]

Glad you think so!

[@b00m3rh4nd_sol]

good content ty

[@barrosmartins7123]

Great content 👍👍

[@FeeltheBoot]

Thank you 🙌

[@ipozow]

Thanks for the video. ¡Chao!

[@FeeltheBoot]

You bet! Have you started angel investing?

[@ipozow]

@@FeeltheBoot well, I am a founder, but I am going to meet an angel investor in aprox 2 hours

[@bazgo-od7yj]

I don't understand, can't angels get dividends?

[@FeeltheBoot]

There is no legal restriction on Angels receiving dividends, but they generally don't want to. They would rather have the money put back into growing the company towards a big exit. The generally small returns from dividends won't compensate for the extremely high risk of the investment.

[@bazgo-od7yj]

@@FeeltheBoot oh, well that's sweet of them. thank you for the prompt response

[@searchbug]

Many angel investors bring valuable industry experience, mentorship, and guidance, helping startups navigate challenges and grow their businesses effectively. Appending contact names can help you get the email and phone numbers of angel investors, which allows you to reach them directly via email or call to pitch your business.

[@honestdudeguru]

How do I contact you

[@FeeltheBoot]

There is a contact form at www.FeelTheBoot.com as well as information on scheduling advising.

[@Potencyfunction]

You can write at school univeristy and contract all the sheets for yourself. Do it now before others take your place in th e first row.