I never pay to be in an angel investing group. Here’s why…
I was chatting with a great up-and-coming angel investor this week. “What do you think of these angel groups that charge a membership fee?” she asked.
Some angel groups charge thousands of dollars to join. When I look at these groups (also known as syndicates), I do the same thing I do when I look at a startup.
I compare them to what else is in the market.
And the market is telling me that this isn’t worth paying for.
Setting the Bar
I’m a member of almost 100 syndicates. So far, the one with the best track record and dealflow I’ve seen is Jason Calacanis’.
Joining that group is free. So why would I pay someone else for an inferior product?
I know that sounds kinda harsh. But this is a free market.
I’m not going to pay for A when B is better — and free!
Getting Paid Twice
Never forget, syndicates are already getting paid.
They generally take 20% of any investment gains you make. This is called the “carry.”
Carry aligns incentives perfectly. They only make money if I make money.
That’s more than fair. I have no problem giving someone 20% of an Uber if I get the other 80%.
But paying just to be in a group and see some deals, then also paying carry? That doesn’t work for me.
Great, Free Syndicates to Check Out
Here are my favorite syndicates.
Of the roughly 100 I’m in, these have had the best dealflow. I’ve done deals with all of them. And all are free:
If you join all these, you’ll have access to tons of solid dealflow. And you’re never obligated to invest in anything.
Always do your own research and make your own decision. Don’t rely on a syndicate lead, me, or anyone else for that!
What Is Worth Paying For
One program that is worth paying for is Angel University.
Jason and LAUNCH run it a few times per year. I’ve taken both their 1.0 and 2.0 courses.
I use what I learned in these classes every single day. And it’s very reasonable — just a couple hundred bucks, and it all goes to charity.
Wrap-Up
Some angel groups are more about socializing than anything else.
I enjoy chatting with interesting people, but in the end, I’m here to make investments. And I don’t need to pay thousands of dollars in membership fees to do that.
I’d rather give that money to a startup. 🙂
Would you pay for an angel group? Leave a comment and let us know!
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