David Rose Making Money and Having Fun Through Angel Investing

“Any company designed for success in the twentieth century is doomed to failure in the twenty-first.” (Encore Podcast)

David S. Rose

Did you know that every year in America, over 600,000 new businesses start up and hire their first employees? Many will fail, but some of them will become the legendary businesses of the future, transforming industries and making millions for the angel investors who helped fund them in their early days. That’s the topic of our conversation today with David S. Rose, a serial entrepreneur, Inc 500 CEO, and one of the world’s most active angel investors. I met (and interviewed) David several years ago in New York City, and am happy to have him back in this Career Strategy Channel podcast on TotalPicture Media.

Angel investing, once the exclusive province of multi-millionaire high-rollers, has now entered the mainstream, with more than $20 billion being invested annually by individual investors in the US alone. Contrary to popular belief, access to these high risk/high return investments—and success in startup investing—doesn’t have to be a matter of luck or connections. David’s new book, Angel Investing: The Gust Guide to Making Money & Having Fun Investing in Startups shows how smart investors with the right strategy and a long-term perspective can achieve annual returns of 25 percent or more from a well-designed angel portfolio.

Making money is no longer about sitting back and reading stock listings, David says. It is now about being part owner of an exciting startup that can be fun and financially rewarding. Angel Investing teaches investors how to carefully select and manage investments, establish a long term view, and approach angel investing as a serious part of an alternative asset portfolio while also enjoying being an integral part of an exciting new venture.

TALKING POINTS:

When I interviewed you in 2008 — six years ago — you said “the world is changing so fast nobody knows where it’s going.” Is that true today? It seems to me the pace of change has even accelerated from 2008.

Recently, you participated in the Exponential Finance Conference, presented by Singularity University, in New York City. What were your takeaways? What did you learn?

On your show page on TotalPicture, I grabbed a quote from your book “ Any company designed for success in the twenty century is doomed to failure in the 21st.” Can you give some context to that statement?

Before we dive into your book, I want to get your take on the surge of interest and money in crowdfunding — such as Kickstarter and Indegogo.

So would you consider crowdfunding to be a good option for those who don’t have six figures available to get involved in Angel Investing?

Alright, define for us what you mean by Angel investing.

Chapter 1 Headline of Angel Investing The 25 percent annual return. Really?

What percent of your portfolio should the average person allocate to angel investing?

How do you get started?

How many companies do you need to be invested in for the 25% return to actually work?

Chapter 2 is all about the non-financial rewards of being an angel – can you share some of your personal experiences with us?

How do you go about sourcing and identifying high-potential opportunities

If you have a normal, stressful, demanding, management job how can you carve out enough time to do this — or can you? Is being an Angel a full time job in itself.?

Our interview 6 years ago was about how to create great pitch for investors — If I’m on the other side of the table what do I need to watch for? Can you explain to us all of the different investment rounds and their forms?

Lets talk about terms sheets and closing. Obviously, you need a lawyer to review all of this.

Tell us about the growth of Impact investing.

What is the one take-away from this conversation you hope our audience of potential angels adheres to?

About the Author
DAVID S. ROSE is a serial entrepreneur, Inc 500 CEO and one of the world’s most active angel investors. Described by Forbes as “New York’s Archangel,” by BusinessWeek as a “world conquering entrepreneur,” and by Red Herring as “patriarch of Silicon Alley”, David has founded or funded over 90 high tech companies. He is the founder and CEO of Gust, the international collaboration platform for startup financing used by over 50,000 accredited angel investors, 1000 angel groups and venture capital funds, and 250,000 entrepreneurs. Gust received the SIIA CODiE Award for Best Collaboration Solution in both 2012 and 2013, as well as the 2012 SWIFT/Innotribe Award as the world’s most innovative financial technology company.

David is also Managing Partner of Rose Tech Ventures, an early stage angel fund; Founder and Chairman Emeritus of New York Angels, the most active angel group in America; and Associate Founder and Founding Track Chair for Finance, Entrepreneurship and Economics at Singularity University, the Google/NASA-sponsored post-graduate program in exponential technologies. A native New Yorker, David has a BA from Yale University, an MBA in Finance from Columbia Business School, and a D. Eng. h.c. from Stevens Institute of Technology.

About Gust:
Gust is a global platform for the sourcing and management of early-stage investments. Gust enables skilled entrepreneurs to collaborate with the smartest investors by virtually supporting all aspects of the investment relationship, from initial pitch to successful exit. The platform is endorsed by the world’s leading business angel and venture capital associations, and powers over 1,000 investment organizations in 80+ countries. More than 200,000 startups have already used the platform to connect and collaborate with over 45,000 investors. The company was founded in 2004 under the name Angelsoft and is privately held. Gust is based in New York, New York, with a European office in Paris, France.

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