Fool's Gold - The Truth Behind Angel Investing in America (see also my blog at www.gasellit.com)

This book is essential read on angel investing for investors, entrepreneurs, and public policy makers.

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Fool's Gold - The Truth Behind Angel Investing in America (see also my blog at www.gasellit.com) by Mind Map: Fool's Gold - The Truth Behind Angel Investing in America (see also my blog at www.gasellit.com)

1. What should government do

1.1. Angel groups

1.2. Also NON-accredited investors

1.3. Startups are born where there are other startups, entrepreneurs, and respect

2. Is there a problem

2.1. There aren't enough (growth) entrepreneurs

3. Role of Angel Investors

3.1. They do not fill the "gap" between F&F and VC

3.2. Having angel investment does not make getting VC easier

4. Investment process

4.1. No complex contracts

4.2. Typically no DD

4.3. Gut feeling valuation

5. Typical investment target

5.1. Also service business

5.2. Typically not high-growth business

5.3. Not only high-tech

5.4. Later stage

5.5. Often home-based

6. Typical startup

6.1. No complete management team in place

6.2. Older entrepreneurs than in media

6.3. More educated

6.4. Often solo entrepreneurs

6.5. Often not even only startup, 100% focus on one company not needed

7. What should we do

7.1. Entrepreneurs

7.1.1. 1. Avoid believing "specialness" of angels as a category of investors

7.1.1.1. No "value difference" to F&F

7.1.2. 2. Understand the true alternatives, such as banks and boot-strapping

7.1.3. 3. Develop an accurate profile of angel investors

7.1.4. 4. Understand what angels are looking for - no need to be next Google

7.1.5. 5. Have a realistic sense when one can get angel money

7.1.5.1. It's much later than one thinks (hopes)

7.1.6. 6. Be aware that raising money as a process is typically haphazard

7.1.7. 7. Understand what you can get out of angels

7.1.7.1. It's just money, actually

7.1.8. 8. Not all angels are the same - a small minority can provide more than just the money

7.2. Angels

7.2.1. 1. Have realistic earning expectations

7.2.2. 2. Ask yourself why you want to make angel investment

7.2.3. 3. Have realistic expectations of what you will get in return

7.2.4. 4. It's not difficult to become an angel investor

7.2.4.1. "All you need to do is find somebody who needs money and write a plain vanilla contract to provide the funds that are needed in return for a stake in the company"

7.2.5. 5. Remember the angel groups

7.2.6. 6. Be selective and focus

7.3. F&F investors

7.3.1. Treat angels with less awe

7.3.2. Don't believe the added value

7.4. VC

7.4.1. Angel goals are not completely aligned with VC goals

7.5. Policy Makers

7.5.1. 1. Remember that the angel market is small

7.5.2. 2. Remember the differences WITHIN angel market

7.5.2.1. Remember that the majority is non-accredited investors

7.5.3. 3. Carefully assess the reasons to intervene

7.5.3.1. Tax credits do not work

7.5.3.2. Could lead to few startup over-valuation

7.5.4. Motivate to invest in angel groups

7.5.4.1. And help the non-accredited investors

8. Angel investing is 8% of all informal investing

9. Market size

9.1. Angel investments = VC investments

9.2. Angle investments is 14% of all informal investments

9.3. 3% of M&A market

10. Types of investors

10.1. Accredited

10.2. Non-accredited

11. All variations

11.1. Sophistication

11.1.1. Naive

11.1.2. Knowledgeable

11.2. Role

11.2.1. Passive

11.2.2. Active

11.3. Investment stages

11.3.1. Early stage

11.3.2. Later stage

11.4. Investment size

11.4.1. Small

11.4.2. Large

11.4.3. Median 10,000 USD

11.5. Instrument

11.5.1. Debt

11.5.2. Equity

11.6. Risk level

11.6.1. High

11.6.2. Low

12. Typical Angel Investor

12.1. Not especially wealthy

12.2. Not especially well-educated

12.3. Not especially old

12.4. Not necessarily male

12.5. Not former entrepreneur

12.6. No difference to typical Friend's and Family Money

12.7. No more startup experience than F&F investor

12.8. Makes less than 1 investment per year

13. Motivations to invest

13.1. To remain involved in the start-up scene

13.2. To learn something new

13.3. To find a job

13.4. As a hobby

13.5. To make money

13.6. To give back to the community

14. Added value

14.1. No added value

14.1.1. There are few exceptions

14.2. It's just money