Its an interesting read to hear about other investors who have missed out on deals. I actually tried investing into a startup this year and completely failed due to governmental regulations. Even though i worked my ass off saving for 2 years to have discretionary income in order to invest as i wanted to I did not meet the requirements of being an "accredited investor" and so i missed out on the funding round. I spent at least a month getting everything ready and going back and forth with the founders meeting with them emailing them back and forth to find out from a newsletter that they had closed without me. I guess until the SEC opens it up i'm shit out of luck and am better off going to a roulette table at a casino...
The easiest criteria for becoming an accredited investor is to be a millionaire. So I'm assuming from your post that you are not a millionaire. Startup investing is very high risk, and if you can buy a meaningful stake in one startup, your odds are actually worse than the roulette table. So you need to invest in multiple startups without going broke, and for that you probably should be at least a millionaire. Regulations stopped you from doing something foolish.
If you take that money you've been saving and invest it in something more conventional, it won't explode 100x overnight but you'll definitely get somewhere.
Why would you want to invest in a startup ?, VCs can pull it off because they are playing with a lot of money and can eat the (completely inevitable) losses. It sounds like you only have enough to invest into one startup, thats an incredible amount of risk to take.
Starting a company is like building an airplane and trying to fly it straight off a cliff. You might crash, it might be a foolish use of your time, and you might die, but you have a lot of control over whether or not that happens.
Investing in a startup, with the bulk of your savings, is like being a passenger on that airplane.
I imagine most start a company without ever investing money they can't afford to lose. Sure a few $1000 but nothing to make them broke. Instead the money comes from 'loseable savings', family gifts, profits, loans or investors.
Yes but picking between investment opportunities is a bit different than starting a company. If you have enough money to buy a significant chunk in an angel round then you also have enough money to open yourself up to other less risky investment opportunities.
That's lottery style thinking, and will get you the predictable results - almost certainly.
Maybe turning this around will help you see how ineffectual this is:
If you are a naive investor desperate to put all of your small stake into one company and I am an early stage startup, why would I want your money if I can have smart money with a good network instead?
And if I can't have that, if I'm desperate for the investment, well your odds just got much, much worse.
