Best of the Week
Most Popular
1. Five Charts That Show We Are on the Brink of an Unthinkable Financial Crisis- John_Mauldin
2.Bitcoin Parabolic Mania - Zeal_LLC
3.Bitcoin Doesn’t Exist – 2 - Raul_I_Meijer
4.Best Time / Month of Year to BUY a USED Car is DECEMBER, UK Analysis - Nadeem_Walayat
5.Labour Sheffield City Council Election Panic Could Prompt Suspension of Tree Felling's Private Security - N_Walayat
6.War on Gold Intensifies: It Betrays the Elitists’ Panic and Augurs Their Coming Defeat Part2 - Stewart_Dougherty
7.How High Will Gold Go? - Harry_Dent
8.Bitcoin Doesn’t Exist – Forks and Mad Max - Raul_I_Meijer
9.UK Stagflation Risk As Inflation Hits 3.1% and House Prices Fall - GoldCore
10.New EU Rules For Cross-Border Cash, Gold Bullion Movements - GoldCore
Last 7 days
Bond Market Bear Creating Gold Bull Market - 19th Jan 18
Gold Stocks GDX $25 Breakout on Earnings - 19th Jan 18
SPX is Higher But No Breakout - 19th Jan 18
Game Changer for Bitcoin - 19th Jan 18
Upside Risk for Gold in 2018 - 19th Jan 18
Money Minute - A 60-second snapshot of the UK Economy - 19th Jan 18
Discovery Sport Real MPG Fuel Economy Vs Land Rover 53.3 MPG Sales Pitch - 19th Jan 18
For Americans Buying Gold and Silver: Still a Big U.S. Pricing Advantage - 19th Jan 18
5 Maps And Charts That Predict Geopolitical Trends In 2018 - 19th Jan 18
North Korean Quagmire: Part 2. Bombing, Nuclear Threats, and Resolution - 19th Jan 18
Complete Guide On Forex Trading Market - 19th Jan 18
Bitcoin Crash Sees Flight To Physical Gold Coins and Bars - 18th Jan 18
The Interest Rates Are What Matter In This Market - 18th Jan 18
Crude Oil Sweat, Blood and Tears - 18th Jan 18
Land Rover Discovery Sport - Week 3 HSE Black Test Review - 18th Jan 18
The North Korea Quagmire: Part 1, A Contest of Colonialism and Communism - 18th Jan 18
Understand Currency Trade and Make Plenty of Money - 18th Jan 18
Bitcoin Price Crash Below $10,000. What's Next? We have answers… - 18th Jan 18
How to Trade Gold During Second Half of January, Daily Cycle Prediction - 18th Jan 18
More U.S. States Are Knocking Down Gold & Silver Barriers - 18th Jan 18
5 Economic Predictions for 2018 - 18th Jan 18
Land Rover Discovery Sport - What You Need to Know Before Buying - Owning Week 2 - 17th Jan 18
Bitcoin and Stock Prices, Both Symptoms of Speculative Extremes! - 17th Jan 18
So That’s What Stock Market Volatility Looks Like - 17th Jan 18
Tips On Choosing the Right Forex Dealer - 17th Jan 18
Crude Oil is Starting 2018 Strong but there's Undeniable Risk to the Downside - 16th Jan 18
SPX, NDX, INDU and RUT Stock Indices all at Resistance Levels - 16th Jan 18
Silver Prices To Surge – JP Morgan Has Acquired A “Massive Quantity of Physical Silver” - 16th Jan 18
Carillion Bankruptcy and the PFI Sector Spiraling Costs Crisis, Amey, G4S, Balfour Beatty, Serco.... - 16th Jan 18
Artificial Intelligence - Extermination of Humanity - 16th Jan 18
Carillion Goes Bust, as Government Refuses to Bailout PFI Contractors Debt and Pensions Liabilities - 15th Jan 18
What Really Happens in Iran?  - 15th Jan 18
Stock Market Near an Intermediate Top? - 15th Jan 18
The Key Economic Indicator You Should Watch in 2018 - 15th Jan 18
London Property Market Crash Looms As Prices Drop To 2 1/2 Year Low - 15th Jan 18
Some Fascinating Stock Market Fibonacci Relationships... - 15th Jan 18
How to Know If This Stock Market Rally Will Continue for Two More Months? - 14th Jan 18
Everything SMIGGLE from Pencil Cases to Water Bottles, Pens and Springs! - 14th Jan 18
Land Rover Discovery Sport Very Bad MPG Fuel Economy! Real Owner's Review - 14th Jan 18
Gold Miners’ Status Updated - 13th Jan 18
Gold And Silver – Review of Annual, Qrtly, Monthly, Weekly Charts. Reality v Sentiment - 13th Jan 18
Gold GLD ETF Update.. Bear Market Reversal Watch - 13th Jan 18
Stock Market Leadership In 2018 To Come From Oil & Gas - 13th Jan 18
Stock Market Primed for a Reversal - 13th Jan 18
Live Trading Webinar: Discover 3 High-Confidence Trade Set-Ups - 13th Jan 18
Optimum Entry Point for Gold and Silver Stocks - 12th Jan 18
Stock Selloffs Great for Gold - 12th Jan 18
These 3 Facts Show Gold Is Set to Surge in 2018 - 12th Jan 18
How China is Locking Up Critical Resources in the US’s Own Backyard - 12th Jan 18
Stock futures are struggling. May reverse Today - 12th Jan 18
Three Surprising Places You See Cryptocurrency - 12th Jan 18
Semi Seconductor Stocks Canary Still Chirping, But He’s Gonna Croak in 2018 - 12th Jan 18
Land Rover Discovery Sport Panoramic Sunroof Questions Answered - 12th Jan 18
Information About Trading With Alpari And Its Advantages - 12th Jan 18

Market Oracle FREE Newsletter

6 Critical Money Making Rules

The Rules of Angel Investing From Someone Who’s Tried

InvestorEducation / Learning to Invest Sep 10, 2017 - 06:24 PM GMT

By: Rodney_Johnson

InvestorEducation Salesmen rarely make good managers or business owners. But that doesn’t stop them from trying.

It used to be a hallmark of American business that successful salesmen were promoted. The logic is obvious. Whatever makes Joe or Amy great at selling the company wares should be emulated by others, thereby making the company more successful.

But selling and managing require very different skills, much like playing a sport and coaching are different.


Sometimes good salesmen, people with great interpersonal skills who grasp what’s important to other parties in conversation, can successfully transition to running a business. But more often than not, they lack the attention to detail and ability to switch between focusing on the big picture and mastering the nuances of daily operations to succeed.

In the end, everyone is frustrated, and the company hasn’t prospered as expected.

The same thing happens in our personal lives. We achieve success in one area, and assume that it’ll happen in other areas. For too many people, myself included, the result is frustration. In my case, I get the added bonus of losing money.

I started my Wall Street career trading bonds. I know the interest rate market inside and out. I can discuss Liquid Yield Option Notes (LYONs), inverse floaters, and repurchase option agreements, and I know the ins and outs of collateralized debt obligations (CDOs) as well as derivatives on debt. I understood the financial crisis at a level that made me sick.

I’ve also spent many years investing in equities and options, and I use a proven strategy to run my Triple Playservice. All of this makes me well educated in the world of finance.

None of this makes me an astute investor of early-stage businesses. But that doesn’t stop me from trying.

My History in Angel Investing

The siren song of 1,000% gains lures me in. And I’m swayed by the idea of bypassing all the noise on Wall Street. So from time to time, I open my checkbook and break one of my investing rules. I get involved in something that’s not my expertise. The outcome is predictable.

In 2008 I had the chance to invest in an ethanol plant. I passed. I saw ethanol on the rise, but our economic forecast called for slow GDP growth, and as a nation we were making strides in better fuel efficiency. Stepping aside was a good move.

I also got the chance to invest in old, land-based oil wells. Not shale fracking, but swabbing old-style wells. This would have been a disaster in the face of falling oil prices.

But a new memory chip company hooked me. This firm makes large chips that are used in many renewable fuel applications, and it has few competitors. The story was solid, as were the books. The management team had great experience and past success. The goal was to grow the business for 24 to 36 months, then either IPO or sell to a large competitor.

I’m still waiting.

The latest plan is to take the company public. In Hong Kong. In 2019. The company still makes a great product, but for whatever reason, it hasn’t attracted a buyer at the right valuation.

I’ve also put money into a biotech company. It’s not exactly angel investing since the shares trade publicly, but they trade on the bulletin board at less than $1. I heard about the company from a financial advisor I like and trust. I also met several investors over a meal. The company was expected to announce a breakthrough within the year.

That was three years ago. I still own the shares.

As with the chip company, this firm still has tremendous promise. I’m not counting it out. But neither investment has performed as expected. I haven’t earned the returns I anticipated, and, in the case of the chip company, I don’t have liquidity.

The point of reviewing these examples is to highlight what it takes to be a great angel investor. You have to do one of two things. Stick to something you know exceptionally well and resist the urge to be led astray by success in another field, or invest in a wide array of opportunities to increase your likelihood of success.

There is a third option. Follow someone who’s proven to be successful several times over in picking great, early-stage companies. We’ll have one, Howard Lindzon, at our Irrational Economic Summit in October. There’s nothing wrong with the “me, too” style of investing, especially if it gives you the results you want.

Those words echo in my head I as reflect on my latest early-stage investment. Earlier this year I put a small amount of money into a new microbrewery (yes, I know, the market is saturated). Their angle is that they partner with musical acts, perfecting brews that match the taste of the band.

If you’ve had Hootie’s Homegrown Ale, Rebelution’s Feeling Alright IPA, or 311 Amber Ale, you’ve tasted our wares. They also have a small, 175-person performance venue above the brewery in historic Ybor City in Tampa, Florida.

I have no idea if it will make any money, but at least I can kick back with a cold one and listen to some good music!

Rodney

Follow me on Twitter ;@RJHSDent

By Rodney Johnson, Senior Editor of Economy & Markets

http://economyandmarkets.com

Copyright © 2017 Rodney Johnson - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Rodney Johnson Archive

© 2005-2018 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules