What Is an Angel Investor? Who Qualifies and the Odds
TL;DR: An angel investor is an accredited individual who puts their own money into an early stage startup in exchange for equity or convertible debt. Check sizes are modest, the odds of a good outcom…
Angel Investor Checklist: Check the Downside First
TL;DR: Before writing a check, an angel wants to know how the money gets lost. That means the team, the document, the cap table and the odds of a follow on round, all before the upside. Per an Angel …
Venture Capitalist vs Angel Investor: Key Differences
TL;DR: An angel investor puts in their own money. A venture capitalist invests other people's money from a pooled fund, according to Chase , and the fund runs on a 2% annual management fee plus 20% c…
Convertible Notes: How Angels Evaluate the Terms
TL;DR: A convertible note is a loan that turns into equity at a startup's next priced round. Three terms decide what you end up with: the valuation cap, the discount and the maturity date. The cap an…
What Is a Cap Table? An Investor's Reading Guide
TL;DR: According to Investopedia , a capitalization table is "a detailed breakdown, typically in spreadsheet or table form, of a company's ownership structure, outlining who holds equity and in …
SAFE Notes for Investors: Caps, Discounts, Dilution
TL;DR: A SAFE note is an agreement where you give a startup cash now and receive stock later, when a priced round happens. It carries no interest and no maturity date. The valuation cap and the disco…
Angel Investing: How a Portfolio Actually Works
TL;DR: Angel investing means buying early equity in private startups with your own money, and it only makes sense as a portfolio. Any single check can lose everything, so results depend on how many c…
Stealth Startup Investing: Risks Before You Wire Money
TL;DR: A stealth startup is a company that keeps its product, team or customers private on purpose. Investing in one means writing a check against claims you can't independently see. You can still ve…
409A Valuation: What Angel Investors Should Check
TL;DR: A 409A valuation is an independent appraisal of what a private company's common stock is worth for tax purposes, used to set employee option strike prices. It is not the price you pay for pref…
Convertible Notes vs SAFEs: An Angel's Downside View
TL;DR: According to Almanac , citing the Angel Capital Association's 2020 Angel Funders Report, 37% of angel deals in 2019 used convertible notes, and SAFEs have gained ground since. If you write che…
Cap Table Basics: What Every Investor Must Check
TL;DR: Carta's data puts the median Series A option pool at 15% of fully diluted equity, and every point of it comes out of your stake, according to Carta . Read a cap table for three things: how lat…
What an Angel Investment Network Actually Does
TL;DR: An angel investment network is a membership organization of accredited investors that screens startups, splits due diligence work among members, and pools capital through syndicates or single …