Youβre reading an excerpt of Angel Investing: Start to Finish, a book by Joe Wallin and Pete Baltaxe. It is the most comprehensive practical and legal guide available, written to help investors and entrepreneurs avoid making expensive mistakes. Purchase the book to support the authors and the ad-free Holloway reading experience. You get instant digital access, commentary and future updates, and a high-quality PDF download.
Angel investing can be challenging for a number of reasons. It can be time-consuming and may require you to quickly come up to speed on industries or technologies you know little about. It can involve negotiating investment terms and dealing with unfamiliar legal issues. Additionally, once you invest you may have very little insight into what is happening to your investment and very little (if any) control over what the company does. You will also be impacted by the rights and valuations the company negotiates with any follow-on investors, which can have a dramatic impact on your return. The goal of this book in part is to help you understand the legal issues, deal terms, rights, and limited controls that will have an impact on your outcomes. Ultimately an angel investment is a gamble, and your goal is to try to increase your odds of winning before you place your bet.