9 important things which I found out in early stage angel investing
I am amazed that a startup can be valued at a sizable billion dollar valuation, much more than an established multinational. And yet the startup hasn’t churned a single dollar of profit after years and years of burning cash to chase market shares. Think of it as a roulette where it spins and spins but never stops. Well, it may cease to spin once liquidity dries up, once the Investors stop pumping additional funds. This may happen if we are in a global crisis – remember 2008? So here we are, news headlines mentioning ABC Venture Fund invests in startup A. Therefore, startup A must be a hot potato that has a great potential of 30x return (or more), simply because the big boys are already vested. The analogy works similar for a public listed company. If a substantial shareholder invests into the business, this must be something valuable that THEY know and I don’t. Even if the startup doesn’t make a single cent of profit, ...