Key Traits of Successful Angel Investors – Guest Post by Angel One Intern, Sam Houpt
Key Traits of Successful Angel Investors – Sam Houpt
Although there is some overlap, the qualities and habits of a successful investor are not always synonymous with the virtues that make a great angel investor. Both study the market and dive deep into the backgrounds of companies, both are ideally weighing exit strategies and creating long-term plans for their portfolios, and both navigate that tricky valley of risk vs. reward. Nevertheless, there are some traits that stand out as inherent to successful angel investors.
An essential trait to being a successful angel is also an obvious one: choose an industry you, or a trusted advisor (i.e. a fellow angel) are familiar with. Top angel investors do not limit themselves to investing only money – they are investing their time and knowledge. One of the key factors separating angel investing from other forms of portfolio management is the role an angel has of mentor.
“An investment in knowledge pays the best interest.” – Benjamin Franklin
Mentoring is a cornerstone of angel investing that elevates an investor’s potential dividends above that of traditional equity investments. This is where the motivation from an angel investor to bring out the full potential of a startup shines a light on future decision making.
For more on the importance of mentorship: http://angelonenetwork.ca/2017/07/27/highlighting-the-importance-of-mentoring-in-angel-investing/
Because angel investing is a more involved process, every pitch, every cheque, and every choice have something to teach an investor should they take the time to study it. Once you have made an investment, look at what worked, and look at what needed improving. Did you trust your gut feeling or go against it? Constantly ask yourself questions throughout the investment process and remember, proper diligence begins with a strong curiosity.
By acknowledging your strengths, putting in the effort to mentor; providing advice for your portfolio companies, and taking the time for self-reflection, you will steadily grow into a more vigilant and successful angel investor.