Valuation and Portfolio Construction
Description
How do you value a company? How many companies do you need in your portfolio? The general suggestion among Canadian angels is 20 companies.
Dr. Wade Brooks estimates that you need 40 companies to have a 95% chance of getting the average internal rate of return of 27%. A portfolio of 20 companies would give you a 60 to 70% chance of hitting the average. This is based on NACO data from the National Angel Summit in 2015. However, these numbers can be misleading.
Angel investment practices across Canada vary tremendously and we will explore this diversity in more detail as we go through the six chapters of the book. A practical guide to angel investing. Of course, success takes more than just luck and a large portfolio.
Angel experience, length of due diligence and post-investment participation in accompany coaching and governance also all play a significant role in increasing the rate of return and increasing the chances of success. This speaks to the critical importance of being associated with and participating in an angel group in your local community. NACO has 40+ angel groups throughout the country in virtually every region.
These angel groups provide a network of experience, and it is through the angel groups. In addition to NACO's innovation and entrepreneurial hubs around the country that we deliver
NACO Academy sessions ensure that you have the training necessary to increase your probability of success. You can purchase the book, A Practical Guide to Angel Investing, 2nd Edition, on Amazon.ca by clicking here.
United States
