How to Make Money Angel Investing as an Operator with Maia Bittner & Michael Daugherty
Most operators don’t have the time (or risk tolerance) to become full-time angel investors. So how do you build wealth through early-stage investing while leading at a high-growth company? Michael Daugherty, Co-Founder & CTO of Quill and Maia Bittner, Investment Partner at XFactor Ventures came together to share real-world experience on writing first checks, avoiding early mistakes, and smarter strategies for investing in startups as a busy executive.
If you’d been there, here’s what you’d still be thinking about:
Making money as an angel investor is really, really hard and takes a really long time. To be successful, you’ll need to think in the 5-7 year range. Maia noted that she’s invested over $1m in 139 companies as an Angel, and so far has only seen $43K in returns. That doesn’t mean her portfolio is bad, but it does mean it’s not a great way for those looking for fast returns. “I’ve put all this money in,” she reflects, “am I ever going to see it again?”
For those getting started with Angel investing, Syndicates (via AngelList or another service) great way to dip your toes in. For others who want to invest directly, Michael advises thinking through the total amount of you have available to invest, and then dividing that over a five-year timeframe and diversifying investments. He mentioned a friend of his made his first investment as a $100K investment and then got wiped out — so that was the end of his Angel career. Better if you have $100K to invest $10k into 10 different companies so you’re less reliant on one big return.
How to find great companies to invest in as an Angel: Michael notes that rather than taking tons and tons of meetings to find investments, he prefers to invest in people he already has relationships with and trusts. This can show up as initially working with a founder as an advisor, and then investing later on. For senior operators like those in the Enrich network, people who work for you and are early in their career are good people to think about investing in because you know them, you know how they work, and you know how they think. So keep those relationships strong, so that you’re top of mind when there’s a fundraising ask.
For complete notes and the event recording, please join Enrich, by applying here.
