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pcm comments on A Guide to Rational Investing - Less Wrong Discussion

27 Post author: ColbyDavis 15 September 2014 02:36AM

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Comment author: pcm 15 September 2014 06:38:21PM 2 points [-]

Angel investing is not like buying small publicly traded stocks. Transaction costs cause some of the better startups to refuse to deal with small Angel investors. The obstacles to becoming publicly traded weed out some of the worst startups.

Comment author: ColbyDavis 15 September 2014 08:04:30PM 4 points [-]

I completely agree and would add that just because you know a lot about tech does not mean you are qualified to identify angel investment opportunities. Knowing a lot about accounting is probably just about as important. David Swensen, portfolio manager for the Yale endowment fund, and probably the most successful venture capital investor in the world, constantly stresses that only the top 10% or so of private equity funds have posted returns that have beaten small cap indexes and justified their costs and risks, and you're only going to have access to the top 10% of these funds if you have billions of dollars to work with.