Angel investing in Europe a risky business?
Today I stumbled upon a very cool infographic on FoundersandFunders.com: “How Funding Works – Splitting The Equity Pie With Investors“.
After looking at the infographic and reading the text I wondered if this model also works for European startups.
In my opinion there is no current economy or market created in Europe where Angel investors and early stage VC-firms have their (partial) Exit in the Series A round when a VC- or PE-firm invests.
Yes we have Angel investors and VC firms, but they all need to invest in the companies for a much longer period of time. They need to be willing to be all-in, until the company they invested in, gets acquired or has an IPO.
Maybe this is also the reason why European startups have a tendency to sell early? But that’s a good topic for another post.
In my opinion Angel Investing in Europe is like playing the slot machines, its much riskier. When you decide to invest your hard earned euro’s take this in mind:
- invest in founders you real know very very good,
- invest in founders who have a successful track record in building companies, and
- make shore you have added value for the founders, by beeing willing to be hands-on and help the founders in strategy and execution.