Angel Investors: The Art of Valuing

silver and gold coins
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“Valuation is what you are willing to exchange for something else you want.”

This section touches on the value of an investment. While dollar figures are important in determining value, there is another factor that comes into play. According to “Winning Angels,” the “return” on an investment can also include other perks, besides money; for instance, investing in a movie production could allow the investor to “meet movie stars and attend cocktail parties.” (Amis & Stevenson, 2001) Another way to win at investing is knowing exactly how the winners make it happen. On page 173, the authors have provided examples of some historic winning deals. It is not shocking that Apple Computer’s angel investor is at the top of the list. Richard Kramlich was able to turn $22,500 into over $5 million, which was “222 times his investment.” (Amis & Stevenson, 2001) This is not by any means the return on the average investment, however, it does just go to show what can be accomplished with the right deal.

Resources:

Amis, D., & Stevenson, H. H. (2001). Winning angels: The seven fundamentals of early-stage investing. London: Financial Times Prentice Hall.

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