[HN Gopher] You can't have too many angel investors
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       You can't have too many angel investors
        
       Author : wdaher
       Score  : 42 points
       Date   : 2021-05-26 21:26 UTC (1 hours ago)
        
 (HTM) web link (waseem.substack.com)
 (TXT) w3m dump (waseem.substack.com)
        
       | antonzabirko wrote:
       | Nice try angel investors. On a more serious note, investors need
       | more companies to invest in. What does this post spread but
       | propaganda? Why exactly should we take more money early when the
       | real question is efficacy and speed of growth? Throwing more
       | money at this issue likely won't fix it, so a headline like this
       | is misleading. Less angel investors is better, and it's better to
       | be picky about them and get better terms if possible. The
       | opposite of this article.
        
       | TruthWillHurt wrote:
       | Well you now have 44 people looking over your shoulder, giving
       | you advice based on half-baked opinions formed on partial
       | information, and freaking out whenever you do something that
       | slightly surprizes them. congrats.
        
         | jacquesm wrote:
         | That's complete nonsense. A good angel-company relationship is
         | not driven by the angels but by the company management. It's on
         | their terms that advice is sought, evaluated, and quite
         | possibly rejected. If you let your angel investors drive your
         | company you are doing it dreadfully wrong.
         | 
         | As a participant in well over 20 investments now I've yet to
         | see this go wrong even once.
        
       | ylere wrote:
       | Does anyone have experience with Angelists RUV? Is it worth the
       | costs? Does it make it in any way harder for an angel to invest?
        
       | jacquesm wrote:
       | The 'malicious' bits are typically covered by good shareholder
       | agreements, the ones with teeth in them. Angel investors that
       | intend to 'do tricks' tend to bail out when they come across
       | terms like that so a good shareholder agreement not only serves
       | you well for the shareholders themselves but can also serve as a
       | filter for prospective shareholders. Of course the more angel
       | investors you have the bigger the chances that you draw someone
       | who does not have your interests at heart. So you will still need
       | to vet them, the easiest way is to contact founders of other
       | companies they've invested in. With a lot of first time angels
       | flooding the scene this is of course not always possible.
       | 
       | A good way to deal with having a lot of angel investors is to
       | create a separate 'angels' vehicle where angels participate, this
       | vehicle then participates in your company.
       | 
       | That way you have all of the benefits and none of the drawbacks
       | of having a lot of smaller early stage investors. You can roll
       | your 'friends and family' round if you have one in there too.
       | 
       | Edit: Ah, the author mentions the 'roll-up' vehicle at the end of
       | the article. Good.
        
       | Animats wrote:
       | Well, if you have too many, you've done an unregistered
       | securities offering and the SEC will come after you. At 35
       | investors, the rules change. Read up on Regulation D.
        
         | Jorge1o1 wrote:
         | Well, presumably angel investors are accredited. If they don't
         | have at least a million in net worth, what does that say about
         | their track record? And if that's what it says about their
         | track record... what does that say about your company? ;^)
        
           | jacquesm wrote:
           | This all needs the context that it is US specific. Other
           | countries usually do not have this 'accredited investor'
           | limitation, nor do they have low limits on how many named
           | investors can participate in any one undertaking.
        
         | paxys wrote:
         | The rules change at 35 _non-accredited_ investors. This has
         | zero bearing on angel investing.
        
         | huac wrote:
         | Usually angels invest in an SPV right? So technically the SPV
         | holds your shares, they hold shares of the SPV, and you only
         | have one investor?
        
           | Aperocky wrote:
           | Dread it, run from it, encapsulation always arrive.
        
             | tobyjsullivan wrote:
             | Forgive my ignorance. "encapsulation" is a new term for me
             | in this context. What does it mean?
        
               | Aperocky wrote:
               | Personally, I feel like many software principals can be
               | applied to real life, and it has a tendency to make
               | things simpler.
               | 
               | Sometimes it's a joke, but other times it is quite
               | fitting.
        
           | icedchai wrote:
           | Not in the startups I'm familiar with. You have individuals
           | investing anywhere from 10K to 100K+.
        
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       (page generated 2021-05-26 23:00 UTC)