Investors may inadvertently advise founders to take on more risk than it is in founders’ interest
I invest in the stock market for a living, and as a principle, I never give individual stock tips. If you come for stock market investment advice, my first, and often last, recommendation will be to build a portfolio of at least ten stocks, and ideally more than thirty, in different industries. Otherwise, buy a low-cost index fund instead.
Keep this concept of portfolio in mind, as it will be the basis for the thinking that follows.
Recently, after helping implement a corporate incubator, I decided to expand my investment portfolio to include early-stage startups. It has been fun, rewarding, and much more socially engaging than my average day at the office consisting of staring at financial statements and the news. I have, in particular, enjoyed spending time with both founders and fellow angel investors. By and large, I find angel investors to be an ethical and well-intentioned bunch. Among their top motivations, is a worthy desire to give back by mentoring the next generation of successful entrepreneurs.
After having witnessed many interactions between founders and investors, I have become aware…
