Joe Chung gets its right, I think.
I’m fairly certain that a would-be angel investor has better odds of making a killing by taking his or her $50,000 to a Vegas roulette table and smacking it all down on 22. Yet over countless lunches between friends, family, coworkers, roommates, and friends and family of all the above, tens of millions in angel money are invested each year, providing vital cash to embryonic startup companies around the globe.
Most forms of stock market investment also are ego plays. The only rational way to invest is to buy and hold index funds. But do people do it? No-o-o-o.
I think that if you're going to do angel investing, my advice is to be prepared (a) to spend a lot of time with the entrepreneurs--so you really don't want their personalities to be grating; (b) to be able to explain to your spouse why you threw away money on such a stupid, no-hoper business idea.
