Why I'm Failing As An Angel Investor

One of my personal and professional goals for 2014 was to get into the Angel Investor game. I've spent 20 years writing about technology. Surely, I could use that expertise and my Rolodex to spot the Next Big Thing, make an investment, and cash in (over the long haul, of course). If only it was that easy...

My journey toward angel investing started in late 2013, when a former cloud backup CEO invited me to an angel investor meeting in Manhattan. The gatherings involve startup executives pitching their companies and describing financial needs -- and seeking money to fund those dreams.

By May 2014, I had quit my full-time job to focus on (A) family and (B) figuring out the next stage of my life. My personal journey involved a range of moves, including lots of time off before co-launching After Nines Inc. -- and more angel investor meetings in Manhattan. 

But unlike Shark Tank -- where deals are neatly consummated or rejected every 15 minutes --  the true world of angel investing involves longer-term research, due diligence and careful consideration before any money potentially changes hands. Teams of experts from the angel investor group participate in the due diligence. As for me, I'm facing a range of personal challenges as I try to find a potential deal that's right for me. 

In some ways, I'm suffering from a mental block. I "think" I know the tech market so well that I sometimes overlook great companies in other verticals. Consumer Products? Life Sciences? I'm less than a novice in those verticals. And in the tech market, perhaps I've been a bit too snobbish -- dismissing some tech ideas because "it's never been done that way before."

Now here comes a potential panic attack: Am I turning into the very naysayer -- part of the old guard I.T. establishment -- that I told myself I'd never, ever become?

Dollars and Cents

The other problem is I tend to go to extremes with my investments. I really, truly love quarterly dividends from Blue Chip stocks and Exchange Traded Funds (ETFs). 

What's this? Another $10 dividend in my money market account from Procter and Gamble? Awesome. Sure, I also love tech investments -- I remain long on Red Hat (RHT) forever, and I also own Salesforce.com (CRM) and WorkDay (WDAY) because I think overall market forces will move in their direction over the next few years. The day-to-day stock gyrations don't bother me much because I'm focused on the long haul, and I never put all my eggs in one basket. 

But owning a tech stock -- while risky -- is far different than investing in a startup, where you can often lose your entire angel investment.

I'm set to attend more angel investor meetings over the next few weeks. I'm wondering which version of me will show up:

  • The I.T. journalism veteran looking for the next great opportunity.
  • Or the value and dividend investor who gets cold feet when big risk/big reward opportunities show themselves.

I'm hoping the I.T. version of me makes an appearance...

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