Angel investing is one of the most interesting and dynamic fields in the realm of finance. It’s constantly evolving and pushing the boundaries of traditional investing. If you have a strong interest in learning about angel investing the best way to start is by reading some of the best books on angel investing.
In this post, we have compiled a list of some of the best books on angel investing from old to new. If you plan to get into angel investing it’s important to have a solid understanding of how angel investing works and who some of the biggest players in the industry are.
Let’s dive right in!
Understanding Angel Investing
Angel investing is done by wealthy investors who are focused on a particular niche or industry they have experience with. The “angel investors” finance small to mid-sized start-ups in exchange for part ownership of the company. They partner up with companies that have a unique position in the market in which they compete. Angel investors can provide capital to companies in different seed rounds as the company shows promise or all at once. It all depends on the investment philosophy and style of the angel investor. Typically, angel investors have an exit strategy in place. This is can be accomplished in many ways such as a de-Spac transaction or through an IPO.
Now that you have a better idea of how angel investing works, let’s take a look at some of the best books on angel investing and what you can learn from them.
Angel : How to Invest in Technology Startups by Jason Calacanis
Why You Should Read This Book
You should read this book if you want to get some helpful tips from a seasoned angel investor who has experience in making serious money investing in start-ups. Jason Calacanis shares his past experiences of investing in start-ups and some of the important things you need to look for when investing in start-ups. He not only shares his success but also some of his failures.
Calacanis takes investors through his step-by-step approach of analyzing, vetting, and finding new start-ups that are set up to succeed. Whether you’re a new investor or an experienced entrepreneur, this book will give you helpful tips and take you through the ins and outs of angel investing.
Quote From the Book
“The number one reason a startup shuts down is not actually running out of money, which is what most people believe. The number one reason a startup fails is that the founder gives up.”
Angel Investing: The Gust Guide to Making Money and Having Fun Investing in Startups by David S. Rose
Why You Should Read This Book
This is perhaps one of the most popular books on angel investing. This book takes investors and entrepreneurs through the journey of angel investing. It shows them how it can be both a fulfilling and fun process. David Rose takes us through his personal journeys of founding companies and how you need to think in order to become a successful investor.
He helps you learn how to build your reputation the right way. David also gives powerful tips and tricks on negotiating deals along with adding value to your existing companies. In addition, he expands on how joining angel investing groups can help you partner up with other investors and expand your resources. It’s an amazing read if you have some investing experience and want to take your knowledge base to the next level.
Quote From the Book
“However, angel investors by definition are not philanthropists or do-gooders in this area of their lives.”
Zero to One: Notes on Startups, or How to Build the Future by Peter Thiel
Why You Should Read This Book
Peter Thiel is one of the most popular investors in the world. From co-founding PayPal and being one of Facebook’s first outside investors, he is an experienced co-founder and investor who is not only successful but thinks very differently than most traditional investors.
In this book, Peter helps to break the traditional investing mold and explains how the process of building successful companies actually works. He goes through important details about how to build companies that create new and exciting things. Peter strongly believes that success comes from finding hidden value in unexpected places. He expands on this idea by helping people understand and think about business from the basic principles instead of complicated financial formulas.
He pushes people to ask not what would someone do, but instead ask what valuable company is nobody building. This is a great book to help investors and entrepreneurs think differently and discover ways of providing real-world value through building a company.
Quote From the Book
“The best entrepreneurs know this: every great business is built around a secret that’s hidden from the outside. A great company is a conspiracy to change the world; when you share your secret, the recipient becomes a fellow conspirator.”
Cracking the Funding Code – Judy Robinett
Why You Should Read This Book
This is an excellent book to read if you want to get better at pitching your ideas to angel investors. It goes into great detail about what angel investors look for from start-up founders in order to get funding for their idea or company. The book also makes it clear that most traditional entrepreneurs simply don’t know where to go and seek out angel investors.
Cracking the funding code will show you how to find investors, structure pitches that attract angel investors, and how to make the deals hard for investors to pass up. It will also help entrepreneurs understand the funding process and the best way to set up their company in order for investors to fund their deals.
Quote From the Book
“Different funding levels of course, I didn’t write each of those 800 entrepreneurs checks for $1 million dollars”
Angel Investing Start to Finish by Joe Wallin and Pete Baltaxe
Why You Should Read This Book
This book has an interesting spin on angel investing. It teaches entrepreneurs how to think about angel investing in terms of missed opportunities. The book makes a strong case that it’s important to be very cost conscious as an angel investor. Otherwise you can take hard financial hits that can be difficult to come back from. It helps investors approach a business without having a strong bias or an emotional attachment.
As such, the book teaches how to properly evaluate deals, make sense of term sheets, and how to have both short-term and long-term perspectives of the overall business. This book is especially helpful for founders who are in the process of raising funds for their initial or second round.
Quote From the Book
“Angel investing is different from other types of investing. Like venture capitalists, angels typically invest in companies they hope will grow rapidly and eventually reach a liquidity event.”
Angel Investing: Insider Secrets to Wealth Creation by Sanjay Kulkarni
Why You Should Read This Book
Sanjay Kulkarni uses his vast experience in investing and entrepreneurship to teach people and advise start-ups on the right methodology when building a company. With plenty of real-world examples, this book will provide you with important tools and strategies to use when building a company from the ground up.
This book will help you navigate the complicated world of start-ups, avoid making costly mistakes and invest wisely by identifying start-ups with massive growth potential. Sanjay does a great job of cutting through the hype associated with investing and gets down to reality. He explains how difficult but possible it is to build a successful company.
Quote From the Book
“Over the years there’s been some professionalization over the investor class.”
The Angel Investor’s Handbook: How to Profit from Early-Stage Investing by Gerald A. Benjamin
Why You Should Read This Book
This is a great hands-on manual for future investors to use to profit from early-stage private equity and SPAC deals. Gerald Benjamin does a great job of helping investors locate high-quality deals and structure deals with favorable terms. In addition, the handbook provides entrepreneurs with a good methodology to conduct proper due diligence. It provides a great way to differentiate between good deals and bad deals.
Gerald also makes it very clear that investors have to focus on having a deep understanding of the deals and company structure. This is critical to avoid making poor investment decisions. It’s a great resource to reference to avoid investing in bad start-ups.
Quote From the Book
“We can no longer ignore the significance of the angel investor contribution. Investors understand that these new companies are the cornerstone of our economic success”.
27 Counter-Intuitive Aspects of Start-up Investing by Simon Ardiss
Why You Should Read This Book
Simon Ardiss quickly makes the case that not all start-ups need investors. He makes a strong case that investors shouldn’t simply invest to invest. They should be conscious of the type of start-ups that require a strong investment partner and ones that don’t need money. He believes that investing in companies that don’t need the investment fails to provide value for both the investors and founders. However, he does believe certain investors are better suited for companies that only need a cash infusion instead of angel investors who can contribute with ideas and a long-term vision. This is a unique spin to traditional investing methodologies.
As such, he expands on this philosophy by providing his 27 counter-intuitive aspects to investing. His principles are a good core foundation to use to find deals that fit your investing style and approach. He also helps investors discern between the different levels of risk associated with starts up. This is an important process to help avoid making costly mistakes. This book is filled with a well-rounded makeup of angel investing. It doesn’t simply stick to one type of investment approach.
Quote From the Book
“Careful though with “averages”. I am of the opinion that using “averages” means the death of the neurone.”
FAQ’s
Do Angel Investors Make a lot of Money?
Angel investors have the potential to make millions of dollars per year. However, not all angel investors make money. Quite a large percentage of angel investors lose money due to not being involved enough in the business or having a full understanding of its working dynamics.
