Why don’t we take on the Angel investor´s mentality when we invest our money?
Let’s see…
Conventional wisdom goes a bit like this:
Make 10 investments. One or two will go bust. Six or seven will roam in the land of the living dead until they fold or sell themselves and one or two investments will be big winners. These will make up for the losses in the others. So far, so good.
The new approach tells us this:
A few massive winners account for a much larger portion of investment gains than you’d ever expect. Today, we have investment opportunities that not just simply double, triple or even quadruple our money, no, we are able to gain hundred- or thousand fold profits. In Silicon Valley, for example, a 100x profit may even be considered conservative.
Look at Angel Investor Calacanis who invested USD 25,000 in Uber at a USD 5 million valuation. Uber’s peak valuation eventually hit USD 72 billion. At the height of the valuation Calacanis’ investment was then worth USD 360 million. That’s a 14,400x return on his original investment. Even at today’s valuation he still made over USD 200 Mio.!!!
But finding the next Uber is challenging and not easy. You must be more than just smart. You also have to be lucky. You have to play to win, too. And you have to be in the right place at the right time. And the best place to be invested in is Silicon Valley. Don’t look to London, Stockholm, Berlin or even China and India or Brazil.
You can also apply the Angel Investors mentality to other high-risk investments like cryptocurrencies and small cap mining stocks.