Investor How-To Guides — Batch 2

Investor How-To Guides

Comprehensive, actionable guides for investors evaluating and managing private market investments. Built on 27+ years of experience facilitating $1B+ in capital formation across nearly 1,000 raises.

1. How to Evaluate a Private Placement Offering

   Five-dimension evaluation framework, PPM analysis from the investor perspective, fee structure benchmarks, 20 questions to ask before investing, and a complete red flag checklist for identifying problematic offerings.

2. How to Verify Accredited Investor Status

   Income test, net worth test, professional certification pathway (2020 SEC update), entity accreditation, third-party verification services ($50-$500), and the March 2025 minimum investment shortcut for 506(c).

3. How to Perform Due Diligence on a Startup Investment

   50-point due diligence checklist across team, market, product, financials, and legal. Diligence depth by stage, reference check methodology, and competitive analysis framework.

4. How to Build a Diversified Angel Investment Portfolio

   Power law of venture returns, optimal portfolio size (20-30 investments), position sizing, sector allocation, stage diversification, follow-on reserve strategy, and 7-10 year time horizon expectations.

5. How to Use a Self-Directed IRA for Alternative Investments

Custodian selection, prohibited transaction rules, UBTI/UDFI tax traps, checkbook control LLCs, Roth vs Traditional strategy, and step-by-step investment process. References Mr. Barnes' book.

How to Read a PPM — What Every Investor Must Know

Investor reading order (not page order), where risks are buried, fee disclosure analysis with benchmarks, management section fact-finding, subscription agreement terms, and side letter provisions.

How to Calculate Risk-Adjusted Returns on Private Deals

IRR vs MOIC vs cash-on-cash comparison, J-curve effect timeline, illiquidity premium, Public Market Equivalent (PME) benchmarks, and how GPs manipulate IRR with subscription credit lines.

How to Negotiate Investment Terms as a Limited Partner

MFN clauses, fee discounts for anchor LPs, co-invest rights, advisory committee seats, reporting requirements, key-person provisions, no-fault divorce clauses, and side letter negotiation strategies.

How to Identify Red Flags in a Pitch Deck

16+ specific red flags with severity ratings across financial, market, team, product, and structural categories. Pattern recognition from reviewing 1,000+ pitches, including the four most common failure archetypes.

How to Exit a Private Investment

M&A exits (85-90% of outcomes), IPO scenarios, secondary markets ($50-80B annual volume), buyback provisions, tag-along/drag-along rights, liquidation preferences, and typical timelines by asset class.

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Next: Fund Manager Guides (Batch 3) — Launching a fund, fund PPMs, LP outreach, management fees, placement agents, fund administration, FINRA/SEC registration, and more.