No Such Thing as Best Practices?

Know More: Best Practices 2.0, Best Practices

Brad referred us to a fantastic article about the myth of "best practices" in venture capital. The author concludes that there's really no science to finding the best deals -- its all about having good gut instincts and a reputation that will attract the best deals.

The same is absolutely true about angel investing. Sure, it takes a some hustle and bush beating to hunt down dealflow if you're an independent angel, but when it comes down to choosing good deals, there are no hard, fast rules.

This is what makes angel investing so great. Venture capital firms are a much more accountable for what they do. A venture capitalist can't just go to his or her limited partners and say "I know this team has no experience or traction, but I've got this gut feeling about them ..." Angel investors are accountable to no one but themselves. If they get a gut feeling, they can follow it.

I'm not saying that angel investing is nothing but a roll of the dice. Angels should certainly pay attention to the usual areas of importance -- team, traction, connections, market viability, etc. Angel groups should be aware of the best practices in running an angel group -- how to encourage participation, deal structures, etc.

But when it comes to investing in the best deals, either you've got it or you don't.

Ifeel there should be more "local" angel investing networks. There are so many people..including myself..who have great ideas but there are not many places to present them in a detailed manner. I do enjoy success stories and am amazed at the minds of many people and their new inventions.

Sincerely,
Carl Peterson, President
Mega 1 Marketing Group, Inc.
Job For America
2326 Liberty Street
Erie, PA 16502
E-Mail: mega-1@hotmail.com

Posted by: Carl Peterson | July 6, 2006 7:12 AM | Permalink to Comment

Jeff,

For the most part, I agree with your post: you either have it or you don't.

The part that I don't agree with is that "Angel investors are accountable to no one but themselves."

The reality is that most angel investors are accountable to their wife (most angels are men) or spouse, and a spouse can much more difficult than a few limited partners! :)

Brock

Posted by: Brock Blake | July 6, 2006 9:29 AM | Permalink to Comment

Angel Investing enabling start-up companies

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