Gotham Gal: Question of the week

There are parts of this question that I get asked often.

I am considering developing a portfolio of angel investments? How much have you invested in total? What is the avg. size of your investments? What kind of IRR are you looking for?

First of all, I'd love to see more investors get into the angel investing market, particularly women. I am not going to share the dollar amount that I have invested in total but I am going to talk about my strategy.

I invest in people first, businesses second. I want to get in at the beginning when the valuations are low. Low meaning nothing over a $5m post valuation. So after the round is raised the company is not valued at more than $5m. I put in anywhere from $25-50K. I want to own 1% of the company from the get go. Even when there is a convertible note, I am assuming that the note will eventually convert because they will be able to raise a Series A. With that being said, although I am not a huge fan of the convertible note, I do it on occasion and it must have a cap so that when we do convert I am able to own my 1%.

Why that amount? The reason is that I expect the company will continue to grow and I want to put in my pro rata share at every round. If I put in $25-$50k from the onset then when there is a $10m round I can afford to keep my 1%. If it started with $100K, it would become too expensive for me to put money into that round. Also, this way I am consistent with my investments. You never know which one will hit it out of the ballpark. I can't make that choice at the beginning so I am consistent with the percentage amount on every investment.

What kind of IRR are you looking for? Certainly I believe that every company that I have invested in and have got behind will have some type of return. I am fully aware that the odds tell me it is not possible but I am a believer in everyone I have invested in. I am not a passive investor but really roll up my sleeves and help, listen, mentor and do anything I can to help the company grow. I care about each and every entrepreneur I back. I preface this up front because even if the IRR is at 2% and another one is at 10%, I am happy because that entrepreneur saw success. I am probably not the norm on this but it is more important to me to see each of these entrepreneur work seriously hard to execute on their dream.

I love being part of it.

companies I have invested in

more investments →

books of the moment

Rachel Kushner: The Flamethrowers: A Novel
A beautiful intelligently written book that threads together NYC and Rome in the 1970's. The prose is just amazing. There is an underlying theme about lies and trust. The main character, Reno, whose eyes the book is written through is like a sponge taking in a world and essentially educating herself. I admit I did not love the ending and the book bounces around a bit although an interesting look at a time that bounced around too so the story defines those times.
Peggy Riley: Amity & Sorrow: A Novel
A mother drives for days with her daughters and ends up in a random Oklahoma town after crashing the car. They come from a polygamous community where there were 50 wives. The mother had grown up knowing life outside that community. Over time, after leaving, she almost becomes deprogrammed. The realization of what she did to her daughters who no nothing outside the world they came from including how to read. Then there is the family that brought them in. It is a fascinating story. Well written. Worthy read.
Charles Graeber: The Good Nurse: A True Story of Medicine, Madness, and Murder
An amazing true story of a male nurse who was arrested in 2002. I actually remember the story as I followed it in the papers. This nurse was a serial killer who had probably murdered over 400 patients that were under his care. A seriously well researched book. Great read.
Meg Wolitzer: The Interestings: A Novel
Wolitzer writes about a group of camp friends who all come from different walks of life (some on scholarship) as their friendships continue through their mid-50s. At the beginning the story seems trite but as you continue to read there is a lot of be said. The story is sticking with me. She makes the case that everything that happens to you from your childhood makes an impact on who you become or don't become. Worthy read.
Elizabeth Strout: The Burgess Boys: A Novel
Strouts last book won a Pulitzer. She focuses on family issues. I enjoyed this book much more than Olive Ketteredge which I found utterly depressing. This book follows two brothers and a sister who live in the shadow of their fathers accidental death. Like most siblings, all have turned out very different yet they are connected. I did not love any of the characters, like her last book, yet as The Burgess Boys moves forward and memories are revealed, it is an interesting perspective on human character.
Tamara Shopsin: Mumbai New York Scranton: A Memoir
Great book. A witty spare inventive personal diary of Tamara journey from Indian to New York to Scranton. Really really enjoyed the book.
Michael Lavigne: The Wanting: A Novel
An incredible book that tells the human side of the many layered issues in the Middle East. From immigrating to Israel from Moscow, to being a victim of a suicide bomber yet surviving, to being pulled into an Israeli radical group. Each character is connected. Very layered well written book. Powerful
Alessandro Piol: Tech and the City: The Making of New York's Startup Community
A history of the Internet that I lived through. Great job of recording what happened.
Amity Gaige: Schroder: A Novel
Not sure how much I loved this book. A father loses his child in divorce and decides to kidnap his own daughter. He is not a stable person but he obviously loves his daughter. His own childhood has made him a disconnected human being. An interesting journey but not sure I'd recommend.
Ernest Hemingway: The Old Man and the Sea
Classic.