Final Thoughts

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You’re reading an excerpt of Angel Investing: Start to Finish, a book by Joe Wallin and Pete Baltaxe. It is the most comprehensive practical and legal guide available, written to help investors and entrepreneurs avoid making expensive mistakes. Purchase the book to support the authors and the ad-free Holloway reading experience. You get instant digital access, commentary and future updates, and a high-quality PDF download.

I have enjoyed every conversation I have had with an entrepreneur, whether I thought their idea was brilliance or lunacy. If you are a curious person and like to learn about new industries and technologies, and how intelligent, motivated, energetic people are trying to solve big problems, angel investing is incredibly satisfying. If you are fascinated by the entrepreneurial journey because you have lived it yourself (or aspired to), it is fun and fascinating to follow your portfolio companies’ successes… and challenges, along with many other companies that you can follow through your angel investor colleagues. Angel investors tend to be smart, successful people who share the same excitement and passion for startups. It has been a great way to meet people and make new friends. Don’t do it just for the payout. As much as the destination of a big payout appeals, it’s the journey that makes becoming an angel investor really worth it.Pete Baltaxe

Remember, this book is meant to be a helpful reference guide, not an encyclopedia. Don’t be afraid to reach out for help. Rely on your mentors, your friends, your colleagues, get a good lawyer, and come back here when you need a reference. Always remember that angel investing is optional. Keep your objectivity. Don’t get emotional, don’t. Getting too excited over a deal can keep you from properly performing due diligence. Move slowly. Don’t think negatively, but think neutrally. There’s no opportunity so great that it’s worth writing a $25K check without knowing what’s going on or how it’s going to affect you down the road. At the same time, don’t get so caught up in the minutiae of the deal terms that it becomes a source of angst or stress. All of the rules, advice, and admonitions found in this book or anywhere else only have value in the right situations, and following these rules too closely can breed arrogance and even ignorance. You don’t want to be so strung up on following ‘rules’ that you’re gummed up on taking any action and miss out on a great deal. Remember that the best return I ever saw went to an angel who wasn’t too stuffy to take a common stock deal—even though you wouldn’t normally be advised to buy common stock! Angel investing is all about situational awareness. Don’t lose your perspective, don’t lose sleep, and don’t invest money you can’t afford to lose.Joe Wallin

Appendix A: Example Documentsan hour, 11 links

Example Convertible Note Term Sheet

For your convenience, this template document is available as a Google Doc to make it easier to copy and edit. All material here is provided for illustration only; please read the disclaimer before use.

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