Are you looking for dumb investors?<\/p>\n
![\"investor](\"https:\/\/timsstuff.s3.amazonaws.com\/content\/uploads\/2014\/06\/Money_Magic_bigstock_261442.jpg\")
<\/p>\ninvestor money<\/p>\n<\/div>\n
\u201cHow can I find investors who don\u2019t take much equity?\u201d<\/em><\/p>\n \u201cHow can I find investors who don\u2019t interfere with my running the business?<\/em><\/p>\n I first posted my objections to this kind of thinking nine years ago in Dumb Investors Dumb Idea<\/a>, one of the earliest posts on this blog. That was before I joined an angel investment group and became\u00a0one of those investors. My objections then are a lot stronger now. And I still see a stream of this kind of thinking in blogs and at my favorite question and answer site, Quora.com<\/a>.<\/p>\n The equity share from investment is simple math. If your investors put in $100,000, that\u2019s 10% of a startup valued at $1 million, and 50% of a startup valued at $200,000. So what\u2019s the underlying valuation? Read up on that with 5 things entrepreneurs\u00a0need to know about valuation<\/a>\u00a0and understand startup valuation<\/a>. So\u00a0with normal angel investment, the startup founders want a higher valuation and the angel investors want lower. It\u2019s a lot like negotiating to buy a house or a used car. Ultimately, both sides have to agree, or there is no deal.<\/p>\n Angel investors are overwhelmingly amateur investors, investing their own money, investing in industries they know or local startups. They are successful entrepreneurs giving back. They believe in their ability to select startups well, study them well (it\u2019s called due diligence<\/em>) before deciding on a deal, and to offer valuable advice and experience. I\u2019ve seen dozens of pitches that ended with investors not interested in startups whose founders knew everything and wanted no advice. People who don\u2019t want interference with their business are not going to do well with angel investors.<\/p>\n Normal angels\u00a0choose angel investment instead of leaving their money with an investment advisor, bank, or some other institution. They know that investing in startups is risky, but they trust themselves and expect to be able to help.<\/p>\n \u00a0<\/p>\n \u00a0<\/p>\n \u00a0<\/p>\n<\/p><\/div>\nValuation determines equity<\/h2>\n
Angel investors normally care and add value<\/h2>\n