Start-up Wealth audiobook cover - How The Best Angel Investors Make Money in Start-ups

Start-up Wealth

How The Best Angel Investors Make Money in Start-ups

Josh Maher

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Start-up Wealth
Angel Investor Types+
Momentum Investing Strategy+
Value Investing Strategy+
Alternative Investing Strategy+
Collaboration & Due Diligence+
Actionable Advice+

Quiz — Test Your Understanding

Question 1 of 8
According to the text, what are the three main types of angel investors?
  • A. Momentum, Value, and Alternative investors
  • B. Strategic, Financial, and Social investors
  • C. Short-term, Long-term, and Lifetime investors
  • D. Corporate, Independent, and Syndicate investors
Question 2 of 8
Which of the following is NOT one of the three key criteria momentum investor Brad Feld looks for before investing in a start-up?
  • A. A passionate entrepreneur
  • B. Great initial product feedback
  • C. A long-term relationship with the company
  • D. A proven track record of past entrepreneurial success
Question 3 of 8
Why does value investor David Verrill's group, Hub Angels, generally avoid investing in pharmaceutical companies?
  • A. The founders lack the necessary background in the life sciences to evaluate them.
  • B. Pharmaceutical companies require massive capital funding that exceeds the group's scale.
  • C. They prefer investments that send a specific social message rather than focusing on profits.
  • D. Pharmaceutical companies typically refuse to allow multiple rounds of investments.
Question 4 of 8
How does Hub Angels' investment strategy differ from the traditional approach of many angel investors?
  • A. They require a controlling stake in the start-up before providing any funds.
  • B. They participate in multiple investment rounds for a single company to boost returns.
  • C. They only invest in companies that have already gone public.
  • D. They offer loans with high interest rates instead of purchasing equity.
Question 5 of 8
What alternative exit strategy does David Bangs often use if a start-up isn't set up for a quick exit?
  • A. He immediately sells his shares to competing venture capital firms.
  • B. He requires the company to go public within the first two years.
  • C. He purchases shares on the condition that the company owners will repurchase them at an agreed price.
  • D. He liquidates the company's physical assets to recover his initial investment.
Question 6 of 8
Why would a start-up entrepreneur agree to a share repurchase deal with an investor?
  • A. It legally prevents the investor from ever leaving the company.
  • B. It increases the founders' ownership stake and potential for a bigger exit.
  • C. It allows the founders to avoid paying corporate taxes on their profit margins.
  • D. It guarantees that the start-up will receive venture capital funding in the future.
Question 7 of 8
According to alternative investor Catherine Mott, what is a primary benefit of joining an angel investor group?
  • A. It allows investors to completely bypass the 4-to-6 week due diligence process.
  • B. It guarantees a successful product launch by pooling global marketing resources.
  • C. It provides critical opinions from peers that help ground an investor's enthusiasm.
  • D. It eliminates the need for start-ups to have a concrete business model.
Question 8 of 8
What actionable advice does the book offer to new angel investors to help them navigate the investment landscape?
  • A. Only invest in industries where you have previously worked as a corporate executive.
  • B. Find an experienced investment mentor to provide insider information and advice.
  • C. Limit your investments strictly to family members and close friends.
  • D. Always invest the minimum legal amount during the first round of funding.

Start-up Wealth — Full Chapter Overview

Start-up Wealth Summary & Overview

Start-up Wealth (2015) is your guide to better investing. From momentum investors to value investors and alternative investors, the range of angel investment strategies is broad. These blinks will help you better determine which of today’s start-ups are worth your time and cash.

Who Should Listen to Start-up Wealth?

  • Current and aspiring investors
  • Entrepreneurs and start-up founders

About the Author: Josh Maher

Josh Maher is an investor and technology consultant. He is also the president of Seattle Angel, a non-profit organization focused on the capital market for start-ups in the Pacific Northwest.

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