How To Invest Like Shark Tank
There are very few TV shows that I can be absolutely content with watching re-runs of —Shark Tank is one of those shows. There’s just something about the mesmerizing combination of ambitiousness and optimism that’s wildly contagious and never fails to leave its viewers. Maybe you think you have what it takes to be a successful angel investor.
Want to take a shot at investing in startups like the Sharks on Shark Tank? In order to be good at it, you need to have a lot of patience, a very high tolerance for heavy losses, and ideally some value to add to the organization. Oh yeah, and you also need to be an accredited investor as defined by the SEC.
Shark Investor
Still interested? Great, because there are many ways you can invest like a Shark on Shark Tank.
Leverage the power of equity fundraising platforms
Now that the SEC has lifted the 80-year old ban on “general solicitation”, which is essentially the use of mass communication or advertisements to announce the intent to raise funds from investors, many platforms have popped up to help startups and entrepreneurs announce their fundraising efforts more effectively. The great thing about these online platforms is the sheer number of deals you’ll be exposed to. Here are some of my favorites –
Angel.co
AngelHuddle
CircleUp
FundersClub
OneVest
Leverage the power of debt fundraising platforms
Lending money to startups might not be as sexy as investing in convertible debt or straight equity, but it can be very attractive from a cash-flow perspective. And since not many angel investors are actively searching to lend money to startups, there’s a lot of low-hanging fruit in the form of attractive deals. And who knows – you can build a relationship with them on this first debt offering and maybe down the line you can offer to lead a seed round for them with either convertible debt or equity. The largest platforms, officially called peer-to-peer lending platforms, are Lending Club and Prosper.
Join a local Angel Investors Group
Although there’s a seemingly endless list of potential deals that you can be exposed to through online platforms, one of the major pitfalls is the fact that you may or may not have regular face-to-face contact with your investment, and that should not be overlooked. If you’d prefer to work with a local startup that you’d have more regular access to, then searching for deals in your local area should be your main focus. One of the best ways to do that is to join a local Angel Investors Group.
An Angel Investing Group is essentially a group of accredited investors who work together to bring a pipeline of deals to their members. Depending on the bylaws of the group, sometimes they pool their money together and invest as a whole, sometimes all they do is bring a steady pipeline of deals to you and you can choose to invest on your own or not. A simple Google search will yield a number of angel investor groups in your area.
Attend local pitch competitions
Another way to find local startups to invest in is to attend local pitch competitions. Local entrepreneur clubs or local universities may run some of these. Depending on the type of competition (i.e., business idea pitch competition versus business competition), the startups might not even be looking for funding at that very moment. However, these competitions are a great way to both meet other investors as well as build relationships with promising companies that might become great investment opportunities in the near future. Again, a quick Google search will yield a number of pitch competitions in your area.
Join startup-related Meetup events
Another great way to build a local network of potential investment opportunities is through local Meetup.com events. There are so many Meetup groups currently operating, some better organized than others. A quick search through your local area for anything related to entrepreneurship, startups, business owners, young professionals, or tech would most likely yield fantastic opportunities to attend.
None of this should be taken as official investment advice, I am not an investment advisor or a lawyer, and I do not play one on the Internet. If you do try to channel your own “Mister Wonderful”, please do so intelligently – seek counsel, do your due diligence, and don’t expect a quick payout. Other than that, good luck and Godspeed!