Angel Investing
Angel Investing
ANGEL INVESTING
The Gust Guide to Making Money and Having Fun Investing in Startups
by David S. Rose
Foreword by Reid Hoffman, CoFounder of LinkedIn
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They deliver more capital to entrepreneurs than any other source. And they often receive an incredible return on their investments. They’re angel investors, some of the most important—and least understood—players in business today, whose investments in startups exceed $20 billion per year. Many, if not most, of the world’s largest companies were originally funded by angels—companies like Apple, Microsoft, LinkedIn and Amazon.com. But until now, little has been written about these angels, due in part to their preference for anonymity. ANGEL INVESTING: The Gust Guide to Making Money and Having Fun Investing in Startups (Wiley; April 2014) by David S. Rose provides an inside look at who these angels are, how they operate, and how anyone with six figures to invest can potentially generate annual returns of 25% while funding tomorrow’s industry leaders…and having a lot of fun in the process.
In the past few years, angel investing has moved from an arcane, tiny backwater of the financial world to a business arena that receives coverage in mainstream newspapers and smash hit television shows such as ABC’s Shark Tank. Every year angels invest over $20 billion into startup companies in the US alone (and double that amount worldwide). Historically this been a virtually random activity, but over the past several years angel investing has begun to be recognized as a legitimate part of the Alternative Investments asset class.
With a foreword by Reid Hoffman—co-founder of LinkedIn and a prolific angel investor himself—together with hard research studies and a host of stories from his personal experience as one of the world’s leading angels, Rose explains in this book precisely how angels and venture capitalists differ, describes proven ways for entrepreneurs to attract them, and provides all the relevant resources for investors to enter into the world of startup funding.
Rose tackles all the challenging questions that have long confounded angel investors and the entrepreneurs seeking to attract them:
Who can be an angel…and who should be an angel?
Where do angels find hidden startup gems before the public hears about them?
How should an angel build a portfolio that can return 25% annually over a decade?
What is it like to lose all of an investor’s money? And, conversely, what does it feel like to invest in a failed startup as an angel investor?
What are some common mistakes that inexperienced angel investors make?
Successful angels know that investing in entrepreneurial ventures is more than just providing money. ANGEL INVESTING is the first complete, up-to-date guide to the subject, including what angel investing is, how one gets started, how to find deal flow, evaluate opportunities, negotiate terms, join an angel group, structure investments, and work with venture capital funds.
ANGEL INVESTING includes tools, tactics, and strategies for high-tech, low-tech, and every other kind of early-stage investing. Rose opens the doors to those angels who have limited experience, while augmenting the experience of seasoned investors. Entrepreneurs will gain access to the mind-set of winning angels, and learn how best to win them over, as well as finding information on how to value, structure and bring their companies to a successful exit.
The combination of advancing technology, changing federal regulations, rapidly dropping startup costs and new online investment platforms means that it is now possible for any serious investor to undertake angel investing the right way—and that is what the book ANGEL INVESTING is all about.
"As an angel investor and a long-time fan of David S. Rose, I was delighted to hear he finally captured his wit and wisdom in the pages of a book. David is a born teacher — clear minded, witty and provocative, with amazing stories to illustrate every key idea and insight. Those gifts — as well as his unsurpassed knowledge of his field — are teaching me so much more about investing than I've learned over the years doing it! Read every page of Angel Investing."
Barbara Corcoran
Real Estate Mogul, Shark Tank star, Angel Investor
“From the secret economics of angel investing and the best methods for finding and picking tomorrow’s big winners to proven techniques for adding value to any business you invest in, Angel Investing provides readers with everything they need to know to get started in this fascinating, fun—and lucrative—business arena.”
David Bach
#1 New York Times bestselling author of The Automatic Millionaire and Start Late Finish Rich, Angel Investor
“This is the most comprehensive and readable guide to angel investing ever written. The chapter on valuation and expectations lays out a clear framework for understanding one of the least well-known pitfalls in the angel world. And its emphasis on creating a win-win relationship with the entrepreneur is at the heart of being a long-term successful angel—and continuing to see the best deal flow. I recommend this book to anyone even thinking about making or receiving angel investments.”
Howard L. Morgan
Founding Partner, First Round Capital
“The world of entrepreneurial startups is where the most exciting and creative action is happening in today’s business world, which is why I was a strong supporter of the JOBS Act of 2012. No wonder millions of people are wondering how they can get involved as investors. There’s no better place to start than by reading David S. Rose’s Angel Investing.”
U.S. Senator Charles E. Schumer
Senate Finance Committee
“David S. Rose’s Angel Investing is the best book on early stage investing ever written. His method of step-by-step explanation is better than any I have read in 20+ years of professional angel investing. I will recommend this to every serious entrepreneur seeking investment as required reading before the effort.”
Dave Berkus
Chairman Emeritus, Tech Coast Angels and Author of Berkonomics
Read more comments from industry leaders about Angel Investing!
The Startup Checklist
The Startup Checklist
THE STARTUP CHECKLIST
25 Steps to a Scalable, High-Growth Business
by David S. Rose
Foreword by Bill Gross, Founder of IdeaLab
Get it today, in paper, digital or audio (or even better, have me inscribe it to you!)
The Startup Checklist is the entrepreneur's essential companion. While most entrepreneurship books focus on strategy, this invaluable guide provides the concrete steps that will get your new business off to a strong start. You'll learn the ins and outs of startup execution, management, legal issues, and practical processes throughout the launch and growth phases, and how to avoid the critical missteps that threaten the foundation of your business. Instead of simply referring you to experts, this discussion shows you exactly which experts you need, what exactly you need them to do, and which tools you will use to support them—and you'll gain enough insight to ask smart questions that help you get your money's worth. If you're ready to do big things, this book has you covered from the first business card to the eventual exit.
Over two thirds of startups are built on creaky foundations, and over two thirds of startup costs go directly toward cleaning up legal and practical problems caused by an incomplete or improper start. This book helps you sidestep the messy and expensive clean up process by giving you the specific actions you need to take right from the very beginning.
Understand the critical intricacies of legally incorporating and running a startup
Learn which experts you need, and what exactly you need from them
Make more intelligent decisions independent of your advisors
Avoid the challenges that threaten to derail great young companies
The typical American startup costs over $30,000 and requires working with over two dozen professionals and service providers before it even opens for business—and the process is so complex that few founders do it correctly. Their startups errors often go unnoticed until the founder tries to seek outside capital, at which point they can cost thousands of dollars to fix. . . or even completely derail an investment. The Startup Checklist helps you avoid these problems and lay a strong foundation, so you can focus on building your business.
Praise for THE STARTUP CHECKLIST
"Finally! The indispensable instruction book that takes you from your Big Idea to a Big Exit. In his inimitable wise and witty style, David takes founders through the nuts and bolts of how to start a company that can successfully make it all the way to the finish line. I"m giving copies to all of my entrepreneurs!"
—Barbara Corcoran, Business Expert and Star of ABC's Shark Tank
"I work with hundreds of first-time entrepreneurs and The Startup Checklist is the clearest, most useful resource I have seen for someone considering starting a scalable, high-growth business. Experience may be the best teacher, but right behind her is David S. Rose."
—Andrew Yang, Founder and CEO of Venture for America and author of Smart People Should Build Things
"This book is an absolute must for anybody looking to start a high-growth startup and get funding. David is an institution among high-tech angel investors, who brings his experience on both sides of it (as startup founder and angel investor) to play in this practical, realistic book."
—Tim Berry, Author of Business Plan Pro
"Everyone knows that a great business starts with a great idea. But the journey from a great idea to a flourishing, profitable business is a lot longer and thornier than most people realize. I can't imagine a more experienced, savvier, street-smart guide along the way than David S. Rose's The Startup Checklist."
—Howard L. Morgan, Co-founder, First Round Capital
"The Startup Checklist should be required reading for every entrepreneur. It walks you step by step through the entire process of building a seriously big company, and will save you from making all-too-common mistakes that can easily kill an otherwise promising venture."
—JJ Ramberg, Host of MSNBC's Your Business
"David S. Rose has seen it all, over many years and across thousands of companies, and then, to the great benefit of the rest of us, has distilled the essence of what it takes to succeed. I can't say strongly enough how much I feel that following the checklist David has created will help you make your company more successful."
—Bill Gross, Founder and CEO of Idealab
More Praise
More Praise
“Only an angel who has backed over 90 start-ups could possess the mastery to provide such illumination into our craft. David’s candor and insights will attract more investors to this entertaining and lucrative activity so essential to economic growth.”
John Huston
Founder & Manager, The OhioTechAngel Funds
"Angel Investing is an engaging, easy read, full of real stories and hard numbers, actual cases and a whole lot of good advice. David S. Rose brings tons of real-world knowledge to the subject that makes this required reading for every new angel."
Tim Berry
Author of Business Plan Pro, Entrepreneur, Angel Investor
"David S. Rose is one of the most insightful thinkers about the angel and venture investment markets. It's rare that an investment leader with so much experience and success takes the time to share (systematically!) his knowledge so openly. Whether you are new to angel investing or someone with lots of experience, you will learn a ton from reading this book."
Marc Bodnick
Co-Founder, Elevation Partners
“David S. Rose has distilled his vast knowledge into an easy to read yet comprehensive guide to angel investing. It is a must read for all angel investors as well as for entrepreneurs seeking angel financing.”
Jeffrey Seltzer
Managing Partner, Pierce Yates Ventures, Former Deputy Chairman, CIBC World Markets, Angel Investor
"Anyone with a checkbook can be an angel investor, but it takes insight to do it well. David S. Rose has written a terrific new book that will help would-be angels make money, rather than lose it. From explaining the value of diversification, to tips on evaluating deals, to offering up plans to attract good deals, Angel Investing will help you move from a money-losing amateur to a money-making professional angel. And if you’re an entrepreneur looking for angel money, you should read this book too. It will help you understand what knowledgeable angels are seeking and how they will evaluate you."
Scott Shane
Author of Fool’s Gold? The Truth Behind Angel Investing in America
“The future of financial markets will be based on the democratization of capital, as the funding of innovation is no longer limited to large institutions and venture capitalists. Angel Investing is the definitive guidebook for visionary investors seeking to profit from the startups of today that will become the superstars of tomorrow. David S. Rose is both a brilliant futurist and an engaging, accessible writer, and his book reveals the secrets behind investing at the leading edge of technologies and markets."
Faith Popcorn
Futurist, CEO and Author of The Popcorn Report
"Angel investing is a new global asset class, with cross-border investments in early stage companies fueling worldwide innovation. David S. Rose's Angel Investing should be mandatory reading for every current and prospective business angel. It brings into one readable volume everything you need to know to join the startup revolution, and clearly takes its place as the new standard textbook for our industry. I always recommend David's classic TEDtalk on "How to Pitch a VC" to every entrepreneur. Now I will recommend this book to all existing and potential angel investors!"
Paulo Andrez
President, EBAN, the European Business Angel and Early Stage Investors Network
“Lots of books explain fundamental theories of investing. David S. Rose's Angel Investing does too—but he also describes the on-the-ground reality of its frustrations and exhilarations, and he does it with candor, intelligence and flair. This book is a must-read for anyone interested in this rapidly growing asset class.”
Joan Finsilver
Former Managing Director, Brean Murray & Co., Angel Investor
“I only wish I had a translated edition of David’s observations when training overseas angels about the art of Mentor Capital. David tells it like it is, shares real life stories, and packages the entire process in one book – I will encourage all my emerging angels to read it before writing their first check!”
John May
Chair Emeritus, Angel Capital Association and author, Every Business Needs an Angel
“What a delightful read! Not only is this book a must-read for angel investors, it is also a must-read for all early-stage founders.”
Jilliene Helman
Founder and CEO, Realty Mogul
"David S. Rose explains the mysteries of angel investing in a clearly-written comprehensive guide full of great insights and stories. He's packed this book with everything you could possibly want to know about angel investing, gathered from his years of hands-on experience and research as one of the most active angel investors and angel evangelists in the country. I can attest this book is what David has been practicing and preaching since I met him in 2002. "
Thomas Blum
Partner, GC Andersen Partners, Angel Investor
“Angel Investing by David S. Rose is a how-to-invest book that is not merely informative and authoritative, but practical and enjoyable to read. Based on his many years running a reputable, leading angel group, and his own portfolio of over 90 angel investments, David tells it like is. He covers a great many things that other books don’t discuss, like “building your reputation”, and the “financial life of a start-up”. I especially valued reading Chapter 6 and the “signs of a weak founder”: the long list of “unrealistics” was spot on! Reading this book is like sitting across from David listening to him share his lessons from his storied career as an angel."
Catherine Mott
CEO/Founder, Blue Tree Allied Angels, and Past Chairman of the Board, Angel Capital Association
“Superb! Angel Investing by David S. Rose is without a doubt one of the best books I have read on the subject of angel investing, venture capital and entrepreneurship. It is easy to read and completely captivating—David’s real-world experience is compelling. He shows first hand how to take the casual sport of angel investing to a whole new level, and make a real business out of it. There is a world of difference between managing a single investment and managing a whole angel portfolio. This unique book addresses everything from the step by step process of due diligence, to negotiation win/win deals, to managing the most intangible—but most important—part of angel investing: your reputation. From every perspective, this is THE book that every prospective angel should read before writing their first check.”
David Freschman
Managing Principal, Innovation Ventures, CEO, Early Stage East, Founding Member, ARC Angel Fund
“As David S. Rose points out, angel investing can be ‘as much as it is possible to have with your clothes on’. But it isn’t for the faint of heart. Rose’s terrific book provides a sweeping guide for anyone interested in mastering the art of funding startups.”
Jeffrey Bussgang
Author of Mastering the VC Game
“David S. Rose’s Angel Investing is great fun and a must read for angels and would-be angels. For newbies it gives a very clear and simple explanation of the dynamics of angel investing, with a number of real-life anecdotes that drive the points home and make them unforgettable. For all investors, it gives a good sense of whether this asset class is something worth pursuing and if one has the right skills and attitude for making angel investments. Whether you are already an investor or are looking to become one, this book covers in detail—and in a non-intimidating fashion—all you need to know to start putting money to work. Read it and start investing!”
Alessandro Piol
Co-founder and Partner, AlphaPrime Ventures and Vendanta Capital and President, TiE New York
"David S. Rose’s Angel Investing is a must read for successful business people on why they should be angels: you get to use your experiences and capital for maximum effect and have a blast doing it. It is also a must read for entrepreneurs on why angels are important and what to look for from angel investors that goes well beyond the funding."
Brad Higgins
Managing Partner, SOS Ventures
Former CFO, US Department of State
“For newly minted angels, Angel Investing is a must-read; for existing angels, a great refresher; for those in need of information and entertainment, David S. Rose packages the arcane into accessible language—and with a sense of humor that will have you read the entire book in one sitting. Thanks a lot, David, now existing angels will have more competition sourcing great deals. Where were you seven years ago when I needed to read this!?”
Joseph Ferrara
Founder of Apparel Group International, angel investor
“David S. Rose has long been a staple in the angel world with a reputation for the highest integrity. While many will conclude this to be a must-read book for those considering angel investing, I'd also recommend this book to every entrepreneur before they go out looking for capital. For the entrepreneur, David will bring you into the mind of potential investors and help you fashion the content of your pitch and the best ways to be persuasive.”
Andrew Weinreich
Serial entrepreneur, inventor of social networking,
Founder of SixDegrees, Joltage, I Stand For, MeetMoi, Xtify
“Whether you are an angel investor or an impact investor, this riot of information and story will elevate your game. David takes us on a sometimes scary—but often hilarious—romp through the ins and outs of angel investing. Read it with caution as this book is addictive!”
Lisa Kleissner
Co-founder, Toniic and Co-founder, Social-Impact International
President, KL Felicitas Foundation
“David S. Rose has written a comprehensive, practical guide to angel investing. It is an excellent resource for anyone interested in the world of start-up finance. Angel Investing distills the tumultuous, esoteric world of start-up investing into a clear, paint-by-numbers guide for would-be participants and interested observers.”
Thatcher Bell
Managing Director, Draper Fisher Jurvetson Gotham Ventures
“Early stage investing involves both art and science, and David S. Rose’s Angel Investing brings together the best of both worlds. I've known and co-invested with David for many years, and he's one of the most knowledgeable and straight-shooting people I've met in the business of early stage financing. His book is the ultimate How To for this rapidly expanding field, written by someone who really knows what he's talking about.”
Chris Fralic
Partner, First Round Capital
"Angel investing is both fun and profitable…eventually. The journey requires the development of a personal investment style, unique to your interests and strengths. David S. Rose has achieved an incredible level of success as one of the world most prolific angel investors, and I know of no other angel having as much fun! His story gives you an insiders view of the world of start-up investing that will be appreciated whether you are a first-timer or an investment veteran. Angel Investing will help you discover your style faster, and with fewer costly mistakes. I hope you enjoy it as much as I did!"
Jeff Stewart
CEO of Lenddo, Chairman of Mimeo.com, angel investor
"David S. Rose’s new book sheds light on the exciting world of angel investing; a growing sector that is rife with risk in the absence of the guidance David provides. Anyone with a passion for innovation or an interest in startup investing should read this book."
Heidi & Stephen Messer
Co-founders of LinkShare, angel investors
“What a terrific book! David S. Rose, my co-investor and fellow board member in high tech startups for many years, talks his walk in this book. Angel Investing is a comprehensive perspective into early stage technology investing that will help any prospective angel investor.”
Dan McKinney
Managing Partner, NextStage Capital
“As an entrepreneur in whom David S. Rose has invested, I have seen him live by the rules he shares in the pages of Angel Investing. From a seed idea to a profitable company, he has provided invaluable counsel and thoughtful support during the often choppy waters of a startup journey, bringing his unique passion and enthusiasm informed by integrity and experience. In this book he lays out the rules of the road for making smart early stage investments and gives would-be investors the tools to define their goals in this emerging asset class. Whether you are an investor or an entrepreneur, David is unquestionably the guide you want to have at your side throughout your journey."
Steven Rosenbaum
Founder & CEO, Magnify Networks
Author of Curation Nation and Curate This!
“David S. Rose is one part iconic investor, one part eccentric entrepreneur and one part stand-up comic. Angel Investing is required reading for anyone who is thinking about becoming an angel, or raising money from them. David answers all the questions that everyone is afraid to admit that they don’t really get…in simple, straightforward, and downright delightful prose. The result is an oxymoron: an entertaining textbook that is actually understandable and jam-packed with information you can really use.”
Patty Meagher
Founder, Stamford Innovation Center
Finally, the definitive book on the subject, by New York's favorite angel, David S. Rose! Angel Investing is a clear, thorough and delightful guide to the pleasures and pitfalls of supporting exciting young companies.
Sunny Bates
Connector, Entrepreneur, Ignitor of Ideas
“David S. Rose’s philosophy and tips have been hall marks of Go Beyond Investing members' investment strategy, and it works! We are getting returns, making a difference and having fun."
Brigitte Baumann
International Angel Investor since 2003
Founder and CEO of Go Beyond Investing
President Emeritus EBAN
“Angel investing is one of the key reasons for the economic dynamism of the US economy in recent decades, and there is a lot to learn from this experience for other regions of the world. David S. Rose's Angel Investing is definitely a very important contribution to the industry, and the book provides great insight into the fun of being a business angel. Like being a grandparent, you get to enjoy the kick of a start-up without having to work 24/7."
Peter Jungen
Former President and Co-Founder of Business Angels Netzwerk Deutschland e.V. (BAND) and
Co-Founder of the European Business Angel Network (EBAN)
“David has a special way of bringing his real-life experience into the classroom. With this new book he provides an authoritative reference on the art of angel investing. It is a valuable and welcome resource for entrepreneurs and angels alike!”
Murray B. Low, PhD
Director of Entrepreneurship Education
The Eugene Lang Entrepreneurship Center
Columbia Business School
“Angel Investing is a must-read for all angels, as well as for entrepreneurs who are serious about raising money. It is highly relevant for angel investing in Asia, as many fundamentals are the same as in the US. I look forward to this book being translated into many languages to benefit readers internationally.”
Allen Yeung
Founding Chairman
Hong Kong Business Angel Network