Angel Fears: Why I probably won't invest...

That valuation technique is definitely crazy. It's completely backwards. You figure out what the company is worth and how much you're willing to part with, and then you sell that part for its portion of the total. You don't decide what the company is worth based on what you want.<p>At least, not if you want everything to be fair. The way they did it, 1 side of the other is getting the short end of the stick.

He brings up, but doesn't directly address an interesting question: How many angel investments do you need to make to start to bring the risk down?<p>I'm in a similar situation, I flirted with a couple of angel investments, but decided that an angel fund would expose me to 100 startups instead of the 3 to 5 that I would have the money and time to do individually.

I rarely see so much potential in something it appears worth dumping a ton of money into w/ little visible revenue opportunity.<p>Of course, a lot of companies that are now hugely successful are just those types. But how many have failed to generate any revenue for every one that has succeeded?

So he basically says angel investing is risky so he won't do it. If you want something low risk go buy treasuries, sheesh.