Why Consider Angel Investing?

An article we liked from Thought Leader Mike Greenfield:

Why I'm An Angel Investor

People, learning, impact

The other day a friend asked me about angel investing. He told me that several entrepreneurs had invited him to invest, and he wasn't sure how to think about it. I thought it would be worth writing up a formal answer.

Angel investing generally refers to the process of investing money into an early stage private company. Sometimes the investment involves equity directly (e.g., I invest $25,000 for 1% of the stock of a company), and in other cases it is structured in a slightly more complex form like a SAFE. Angel investments are generally high-risk investments, and require that the investor has money that they are willing to lose. In most cases, companies will ask that all investors are accredited.

Though there are a few people who treat the label “angel investor” as a status symbol like “Tesla owner” or “person with a summer home in the mountains,” it can and should be a serious endeavor. It takes time, it requires sometimes saying “no” to entrepreneurs who are pouring their hearts into their businesses, and it obviously takes money. Though some early stage companies will take $5,000-$10,000 investments, most ask angel investors to invest at least $25,000-$50,0001.

I invested in a bunch of companies between 2012 and 2016, then slowed down significantly after starting Change Research in 2017. I plan to invest a little more in the years to come. Here are some of the reasons I’d recommend angel investing:

You get to work with amazing entrepreneurs. Angel investing gives a view into the work world of people who are, in many cases, both exceptional at what they do and...