If you look at the evolution of the startup investment industry from the dotcom bubble era of the late 1990s to date, it’s like things have changed a lot and yet have remained the same.
Venture Capital (VC) and Private Equity (PE) still dominate late-stage (Series B, C, and D) funding of startups just like they did back then. They stand alone at the top of the startup investment food chain. So not much change there.
Conversely, at the bottom of the chain, Angel Investors (Angels) are no longer the sole players in early-stage startup funding. In fact, their dominance of this space is now threatened by “celebrity” investors, crowdfunding (spurred by the 2012 JOBS Act), and even the so-called “Super Angels”, who straddle early-stage and late-stage startup financing.
Consequently, when a startup founder is looking for seed or startup funding nowadays, an angel is not necessarily at the top of the totem pole.
What can you do as an angel investor to stay on top of your game?
Here are five strategies you can use to become or remain highly visible to startup founders:
1. Join an Angel Network or Group
Because there’s strength in numbers, angel networks continue to be the most popular way for angels to see good deal flow.
Often localized and sometimes industry focused, angel networks have exploded all over the world as the number of high net-worth individuals (HNWs) have risen sharply.
One of the benefits of joining these groups is that you can pool capital (“syndicate”) with other angels to take on large startup funding opportunities you might not have been able to handle with only your money. Another benefit is that you get to share investment risks with others.
2. Invest as a Limited Partner in a Venture Capital-backed Fund
If you’re the type of angel investor who’s unable or unwilling to spend time to mentor a startup founder, then you might be better off putting your money in a Venture Capital investment fund as a limited partner investor. Just cut a check for the general partners of the fund, sit back, and they will find and manage investments for you.
The downside to this strategy is that you sacrifice some of your returns to the fund manager.
3. Become an Advisor to a Coworking Space Company
This strategy might seem like an unconventional way to find startup investment opportunities, but it’s not a moonshot.
Coworking spaces are shared offices, and many startups work out of these places while “growing up” to save money.
If you can get on the advisory board of a coworking space company, then you’re more likely to cross paths with startup founders.
4. Organize or Speak at a Startup Investing Conference/Seminar
Obviously, you can just attend industry events to network with founders and other industry players. But you will get more “visibility” when you speak at an event or better yet organize one.
5. Blog Your Angel Investing Expertise
The truth is that all the strategies previously discussed are to varying extents self-advertising: you’re really advertising your expertise as an angel investor to founders and other investors.
So why not leverage the biggest advertising platform in the world today to find investment opportunities?
Given the very wide reach of the internet, blogging about your angel investing knowledge and experience will help you cast your net wider in your search for opportunities, especially if you’re a niche investor.
You never know. One of your blog readers might just be the founder of a startup in your niche.