Investment Tips

Startup Investing: 3 Things Every Investor Must Know

Thinking about how you can invest in startups? 

As our funds and team are now filled with top angel investors and venture capitalists, we are happy to tell you learning how to invest in startups is the single most important and valuable thing you will ever do once you have the capital to deploy into top startups.

Here are three things about venture capital and startup investing you need to remember: 

1) Invest in people.  Every founder should be vetted and you must know their backstory, before you invest. But at the end of the day, a company is nothing more than the founders and CEOs who run them, which is why you must always consider who's in charge before investing.

2) The product must fill a need or change consumer psychology/behavior.  If the product is merely a mirror of an existing idea or concept, and lacks originality of ingenuity, it's not the right fit. 

3) Invest, and be patient.  Startup investing at Angel Kings is profitable, big league!  However, we do want to be clear that our goal is to invest in the first seed rounds in companies that will go public vis-a-vis an IPO.  Thus, this process can take 3 to 7 years on average (sometimes longer), but the potential for a 100x return does exist... and sometimes greater.

Be sure to subscribe to our Newsletter on How to Invest In Startups by visiting our homepage (AngelKings.com).  We have tons more to share with you soon.

The Angel Kings Team

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The photo herein is a picture of investing expert Ross Blankenship meeting with InDinero CEO Jessica Mah.  Blankenship is a successful investor in top startups like InDinero and believes firmly that Mah represents rule #1 about why you should always look to people first, before you invest!

3 Most Successful Dorm Room Founders

Mark Zuckerberg

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The name that comes to mind most often when mentioning founders who were in college when they created their big idea is Mark Zuckerberg, co–founder of Facebook.

The other four co–founders were Andrew McCollum, Chris Hughes, Dustin Moskovitz, and Eduardo Saverin. Originally, the site was called theFacebook, and it was created just for fellow Harvard classmates. It was an online place where classmates could find information on one another, and where they could connect with people who were sharing their classrooms and hallways.

It brought students together, and allowed them to learn about one another's lives at a time when the Internet was still getting a good foothold in the minds of many people and the term "social media" wasn't something everyone had heard of. While there were social media sites available before Facebook (MySpace, anyone?), Zuckerberg and his co–founders created something inimitable. It was so different that it captured the interest of a high number of Harvard students – and people outside of Harvard begin complaining that they didn't have anything like that to use.

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Over time, Zuckerberg and his co–founders became aware that other schools were jealous of what he was offering to the students of Harvard. The site was expanded to allow students from other schools to connect with Harvard and with one another, and the popularity of that option grew until a number of schools had high percentages of their students logging on and linking up to see what others were doing. What started out as a small idea to keep students at one school connected had become something much greater than that.

When the popularity of “theFacebook” began to soar, Zuckerberg realized its massive potential. Rather than remain in college and focus on his studies in computer science and psychology, he dropped out and focused the majority of his time and attention on the development of the site. The site was renamed Facebook and opened up to others outside of educational circles. As of 2015, use of the site had grown to more than one billion people worldwide. It's the largest social media site in the world, and all indications are that it will remain that way indefinitely. It has changed throughout the years, but its popularity remains high.

Larry Page & Sergey Brin

While Zuckerberg may be one of the most famous dorm room founders, he's far from the only one who took what he learned in the classroom and coupled it with real life to make something amazing.

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Other dorm room founders who created companies with household names include the duo of Larry Page and Sergey Brin, the creators of Google. They were Ph.D. students at the time they started developing the search engine, which started out as a part of Stanford's Digital Library Project. They wanted to see a more powerful search engine that was also effective.

While searching was already possible, it often did not work well, and its lack of power meant that much was missed during a large number of searches. Navigating the Internet was clunky, at best, and other search sites gave results that could often be considered questionable. A targeted, proper search engine was needed, but it had to be easy to use and it had to be comprehensive. One of the main complaints with previous search engines was that they did not return enough results – and much of what they did return was not relevant to what the searcher was actually looking for.

A better way had to be out there somewhere, and Page and Brin discovered it as they were trying to catalog the digital library and make it searchable. When they saw what they had, they knew they were on the cusp of something that could change the Internet forever.

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It was then just a matter of continuing to develop what they had already started. That took time and effort. At first, one could not simply type in "Google" and reach the search engine. The original address was google.stanford.edu. That was changed as the site continued to be developed and more capability was added to it.

Today, Google is the world's most dominant search engine. From there, the company evolved into more than just a way to search the Internet. The conglomerate now provides a significant number of Internet–based services and products, including Google+, Blogger, Picasa Web Albums, and more. Most people don't say "search for that." They say "just Google it." The site has become such a common part of daily life for so many people that there is no reason to use a different search engine in most cases. The majority of people who want to find something online know Google will give them the best results, fast.  Google has branded itself synonymous with the word “search”.

Bill Gates & Paul Allen

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Another top company that started out in a dorm room is Microsoft, founded by Bill Gates and Paul Allen during their time at Harvard.  While Microsoft took time to develop, Gates and Allen worked together to determine what worked and what did not.  

That helped them navigate through problems that the company would have and to focus on what they would do in the future. Still, they refrained from actually starting up the company for some time. They did not have the capital, and Gates didn't have the support he needed from his parents, who wanted to see him stay in college and finish his proposed path of study.

As the idea of Microsoft continued to be developed, though, both Gates and Allen discovered that they had stumbled onto something big, and that they could lose out if they didn't take the chance and act on what they had found and what they believed in. Realizing the value of what they had created, Gates made the no–longer–difficult decision to drop out to begin building the software company, following the vision and plan he and Allen had created. While Gates' parents wanted him to pursue a law career, he studied computing and gained their support before dropping out of Harvard to pursue his dreams.

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In 2015, Gates was said to be worth more than $82 billion. He is among the best–known people involved in the computer revolution, although some have questioned his business tactics. Those questions haven't stopped Gates from moving forward, and they haven't stopped Microsoft from developing into a multibillion–dollar company that is a household name in most developed countries. Gates has also given billions of dollars away to charity through the Bill & Melinda Gates Foundation and other philanthropic endeavors.


You can also sign up for our newly released course to give you inside access to the hottest startups in the world. 

We’ll help you find the next billion-dollar startups so you can be part of the future and get an enormous return by angel investing.

Top Predictions of the Next Billion-Dollar Financial Startups

inDinero

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Both a focus startup and part of the AngelKings portfolio, inDinero illustrates the principle from our book, Kings Over Aces, that there's nothing new under the sun–particularly when you're talking about accounting services. The startup's cloud–based accounting services offer payroll, tax, and other bookkeeping options, which are all available through other companies or software. Remember, though, that a product that offers less expensive or more convenient services has a good chance at succeeding, and that's what inDinero delivers.

The startup offers all–in–one back office accounting so businesses of all sizes can concentrate on revenue–generating activity instead of tedious accounting functions. inDinero also charges clients based on monthly pricing that is easy to predict, which may not always be the case with traditional accountants and bookkeepers. 

One thing that excites us about inDinero is that its product is designed for small and mid-sized business, but the product scales with business growth to support organizations with eight–figure revenues and 100 or more employees.

inDinero's startup story is interesting, as it provides a different outlook than some of the other companies we've covered in depth. The startup launched in 2010 and was successful at seeking seed funding. The product in 2010 was a self–service, small business, financial tracking tool–not what inDinero is today.  While pursuing the first version of its product, inDinero faced challenges. It almost ran out of money and had to lay off all its employees before revamping the product; at relaunch in 2013, inDinero was able to land $7 million in funding and has since seen more success.

The story is important, because it speaks to our point in a previous chapter: As an angel investor, you are not investing in a perfect product. You're investing in people and ideas, and some ideas take more tweaking than others to achieve success.  We are proud to have inserted capital with inDinero.

Recurly

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Recurly's platform makes it easy for businesses of any size to set up, manage, and automate recurring bills. An increase in subscription services in all types of niches has made recurring bills a big business opportunity, and a secure, customized platform is a product that generates substantial interest among small and midsized businesses. Recurly entered the market just as this need was rapidly increasing following the success of subscription services such as Netflix and Ipsy.

BillGuard

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In a world where no retailer or bank seems capable of guaranteeing protection of your account information with 100 percent assurance, BillGuard makes it easy for you to do the monitoring yourself. The startup partnered with Experian and offers an app that displays all your account information in a single dashboard. A few glances throughout the day provide peace of mind about account status, and the app also provides security notifications. BillGuard scores high as a startup due in part to its entry into a consumer market that is frightened by growing virtual threats and has a psychological need to do something to protect itself.

Wealthfront

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Wealthfront delivers on–demand investment advice and services without high account minimums and fees that keep many people from building wealth through investing. One thing that makes Wealthfronts a top fintech startup is that it takes an existing solution–investment services–and makes it available to a new market. We talked before about creating a have situation for the have–nots, and this product does that.  Deeply entrenched companies like Charles Schwab are now copying these auto–investing platforms.  When the big boys copy your clothing, you know you’re onto something big.

Acorns Investing

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Acorn Investing has opened investing and financial management up for the masses.  Their seamless interface allows for auto–investing and saving for millions of investors who want to get in the stock market game.  This platform is groundbreaking.  Of course, they do run the risk of being copied or cloned by companies like Rocket Internet, but if they do hit scale fast enough, we expect this one could be a billion-dollar company in no time. 


You can also sign up for our course and get inside access to the hottest startups and investors in the world. 

We’ll help you find the next billion-dollar startups so you can be part of the future and get an enormous return by angel investing.

Top Predictions of the Next Billion-Dollar Biotech Startups

Tute Genomics

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Like several of the biotech startups in our list, Tute Genomics is a company in the genome research space. It's both a focus startup and a company within Angel Kings' portfolio for a number of reasons, starting with the founders. Tute Genomics (Tute) was founded by Reid Robinson and Kai Wang. Both men have experience in the industry–Robinson began as a physician and moved into data science; Wang has a PhD and a post–doctorate degree and works as a professor in the niche.

The product–which is referred to on the startup's website as Tute – lets genome and DNA researchers collaborate, research, and access existing knowledge via a fast, low–cost platform. Tute markets itself has having the largest genetic knowledge library available and provides access to 200 relevant genomic knowledge sources in real–time. Users can also access secure patient portals and clinical reports and advanced analysis tools.

Tute isn't the first to market, and it capitalizes on this fact by building on previous technology. Tute uses ANNOVAR, a recognized genome annotation and interpretation technology, to deliver efficient, accurate results for labs and patients. Vendors and providers can further build on the technology by using Tute APIs in existing pipelines.

TuteGenomics recently partnered with Google to publicly release DNA/Genomic data.  We look forward to Tute’s massive growth.

TrueVault

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Healthcare developers are dealing with a growing web of compliance requirements, which makes designing the data–storage capabilities of software time–consuming. TrueVault offers APIs that are HIPAA–compliant so developers can concentrate on the unique functionality of their products. Designed to support startups in the healthcare software space, TrueVault works with traditional, web, and mobile apps.

Benchling

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Benchling is a cloud–based platform for scientists and research teams. The platform offers complex DNA and other research tools, as well as a chance for global research teams to collaborate on projects.

The platform tracks work, letting researchers revert to previous versions of DNA sequences if desired, and teams can download high–quality images for reports and presentations. Public access is free, and labs and research teams can take advantage of affordable monthly subscription options.

Science Exchange

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Science Exchange offers organizations access to researchers and experts across the globe in a market–based format that keeps pricing fair and opens doors for R&D in companies of all sizes.

Users can order experiments from a lab that specifically meets the technical requirements of the experiment, regardless of the location of that lab. One benefit of the service is that companies can access specialty equipment and staff that may only exist in a few places in the world.

Kaggle

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Kaggle caters specifically to the data science niche. It bills itself as the world's largest data science community and boasts over a quarter million users as of 2015. The site includes a job board. It also hosts student competitions and engages with prestigious universities across the world to support science education. Kaggle competitions include participation by professionals who are working to solve real solutions for customers–the results often beat benchmarks by weeks.


You can also sign up for our course to give you inside access to the hottest startups in the world. 

We’ll help you find the next billion-dollar startups so you can be part of the future and get an enormous return by angel investing.

Top Predictions of the Next Billion-Dollar Cybersecurity Startups

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Lookout Security

Lookout customizes cyber defense for the mobile market by using predictive analysis tools to plan for threats before they become a problem for users.  The company now boasts more than 60 million users, including organizations such as AT&T and Sprint. Mobile security is the next frontier for cyber security expansion.

BlockScore

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In 2014, Blockscore landed $2.4 million in funding for its identification verification product. Marketed as an anti–fraud and compliance product, Blockscore enters the market at a time when newsworthy hacks have made it obvious that simple password protection is fruitless against modern cyber criminals. While Blockscore is competing with dozens–if not hundreds–of security products, it markets itself as the simple, convenient, and effective option. On its landing page, the brand cleverly shows that users can sign up and use the service in the time it would take to read the competition's contracts.

Sift Science

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With more than 191 million digital shoppers in the United States alone, e–commerce sites across all niches are seeing growing business. Along with the increasing revenue comes a growing problem: fraud. In 2012, online retailers lost $3.5 billion to fraud, so it's not surprising that companies are cautious about potentially fraudulent orders.  This is where Sift Science comes in.

E–commerce fraud protection services may seem more difficult to brand, and you might not see a bandwagon potential at first. But consider the need to keep up with competition. Eventually, more retailers will have to buy in to the Sift Science product or risk the loss of consumers whose orders have been incorrectly denied.

We also like that Sift Science is integrated within thousands of websites.  Once you’re able to build dependency, similar to CloudFlare, you’re on your way to becoming a billion-dollar company.

True Link Financial

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True Link Financial offers monitoring and education tools for older adults and caregivers to help seniors avoid fraud and scams. Few cyber security companies dared to tackle this niche for the older generation Americans.  We are fascinated by the potential here.


You can also sign up for our course and get inside access to the hottest startups and investors in the world. 

We’ll help you find the next billion-dollar startups so you can be part of the future and get an enormous return by angel investing.

Top 5 Predictions of the Next Billion-Dollar Startups

Dropbox

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Covered in depth in our book, Kings Over Aces, Dropbox offers cloud–based storage and file sharing. New users can open a Dropbox account for free; paid services are offered, as users require more space for data. As of 2015, this former startup boasted 300 million users from around the world.  We expect Dropbox to go public (IPO) by 2017.

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Buffer.com

Buffer.com is a social media management product that lets companies and users publish and analyze social media performance with convenience on a large scale. Buffer and its founders meet a number of the account.

inDinero

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We are proud to call this an Angel Kings investment company.  Having started several companies in the past, I realize how painful bookkeeping and accounting are for a business owner.  The inDinero platform has absolutely revolutionized the way small and mid–sized companies in America keep track of their books.  Jessica Mah and her team are on–track to become a bigger acquisition than Mint.com.  Every company in America should be – and might someday – be using inDinero to replace the headaches of dealing with QuickBooks and Intuit’s platform.  The future holds big things ahead for inDinero.

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GitHub

Leveraging the ongoing growth and popularity of open source collaboration, Github delivers a Windows–based collaboration platform. Teams from disparate locations can create code together via the downloadable, cloud–based application, which is free. Github offers cost–effective upgrades for teams that want to work in private environments.

Boosted Boards

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Boosted Boards delivers lightweight long boards with a literal boost–they operate on a battery and offer adjustable speed and power. A Bluetooth remote provides control, and the boards are popular in urban areas for running small errands or reducing travel times to and from work. Boosted Boards offers test rides to convert consumers to its unique concept.


You can also sign up for our course and get inside access to the hottest startups and investors in the world. 

We’ll help you find the next billion-dollar startups so you can be part of the future and get an enormous return by angel investing.