How To Angel Invest Like The Sharks On Shark Tank
The ambitious entrepreneurs on Shark Tank always seem to motivate people to go after their own American Dream. But what if your American Dream is to sit on the other side of the table and invest in these startups?
In order to be a successful angel investor like the Sharks on Shark Tank, you need to have a lot of patience, a very high tolerance for losses and ideally some experience or skill set you can bring to startups. Oh yeah, and you also need to be an accredited investor as defined by the SEC.
Still interested? Great, because there are many ways you can be an angel investor and invest in startups like the Sharks on Shark Tank–
Invest through equity crowdfunding platforms
Now that the SEC has lifted the 80-year old ban on general solicitations, many platforms have popped up to help startups find investments from angel investors. The great thing about these online platforms is the sheer number of deals you’ll be exposed to. Here are some of the more popular platforms–
Angel.co
CircleUp
FundersClub
IndieGoGo + Microventures
Invest with peer-to-peer lending
Lending money to start-ups might not be as sexy as investing in convertible debt or pure equity, but it can be very attractive from a cash-flow perspective. And since not many angel investors are interested in lending money to startups, there’s a lot of low-hanging fruit in terms of attractive deals. And who knows– by lending a startup money and building a relationship with them, maybe in the future they’ll want you to lead a seed round for them. The two largest peer-to-peer lending platforms are–
Join a local Angel Investors Group
Although there’s an endless list of potential deals to be made through online platforms, one of the major pitfalls is you may not have regular face-to-face contact with the team you’re investing in. If you’d prefer to work with a local start-up, searching for deals in your local area should be your main focus. One of the best ways to do that is to join a local Angel Investors Group. An Angel Investing Group is essentially a group of accredited investors that pool their money and invest in together. Some angel investing groups take an all-or-nothing approach, some bring a steady pipeline of deals for their members to invest in individually.
Attend local pitch competitions
Another way to find local startups to invest in is to attend local pitch competitions run by local startup groups or local universities. Even if the start-ups are not looking for an investor at that moment, these competitions are a great way to both meet other investors as well as build relationships with promising companies that may need an investment in the future.
Join Startup-related Meetup Events
Another great way to build your local dealflow is through local Meetup.com events. There are so many Meetup startup groups currently operating that you should easily be able to find one close by. A quick search through your local area for anything related to entrepreneurship, startups, business owners, young professionals or tech would most likely yield fantastic opportunities.
None of this should be taken as official investment advice. I am not an investment advisor nor am I a lawyer. If you do try to channel your inner “Mister Wonderful”, please do so intelligently– seek counsel, do your due diligence, and don’t expect a quick payout. Other than that– good luck!
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