Читать книгу How To Become A Business Angel - Richard Hargreaves - Страница 53

Alongside a plan to offset the high risks of any one venture by building a portfolio, you need to be clear about sector and stage of investment.

You might decide to only invest in software because you understand it. Whilst your risk would then be concentrated in one industrial sector, that may be more than offset by your sector knowledge, your ability to do due diligence and to understand exit valuations, and the possibility of adding value post investment.

On the other hand, you may decide to invest across a number of sectors of which you have no intimate knowledge. In that case, one way of offsetting risk is to only invest in companies that are already established with customers and revenue. Another is only to invest alongside people who do understand the sector.

It goes without saying that the earlier stage that a venture is at, the higher the risk of failure and vice versa. Though if an established company has large amounts of debt it too can be in the higher risk category.

Time spent deciding how much to invest, in how many companies, at what stage of development and in what sectors is time well spent. As is reviewing this profile from time to time.