The Risky Business of Angel Investing

Buying into the next Facebook or Netflix before it goes public may seem beyond the reach of all but those with the deepest pockets. But as Jason Calacanis explains in his new book, Angel, anyone can become an angel investor–as long as they’re prepared to lose it all. (It’s “the highest-risk investing in the world,” he warns.)

There are ways to mitigate risk, though. To start, Calacanis suggests joining an angel syndicate like SeedInvest, FundersClub or AngelList (which he uses), where you can contribute as little as $1,000 as part of a group funding effort. As for picking the right company? Calacanis says to look for other notable investors, at least two founders (as insurance against one of them quitting) and proof that the company can keep itself going for 18 months after receiving its funds. If you choose correctly, as Calacanis did with Uber, the reward can be enormous. “Someone has to write these early checks,” he writes. “Why not you?”