Essay

How to Be an Angel Investor

Paul Graham · paulgraham.com Free Beginner

Paul Graham's 2009 essay for people writing their first angel cheques: pick founders over terms, start small and decide quickly.

  • What decides returns is investing in the right startups, not the deal terms.
  • Bet on founders who are relentlessly resourceful.
  • Start with small amounts you can lose without real pain, spread across several companies.
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Curated reading that points you to the sources, not personalised investment advice.

It answers 6 questions

  1. Should I angel invest while running my own startup?
  2. How much should I set aside for angel investing without hurting my own startup or my family?
  3. How do I quickly evaluate a startup before I angel invest, when I barely have time?
  4. What happens to my angel investments if my own startup suddenly needs cash?
  5. How do I handle it emotionally when a startup I backed shuts down?
  6. Angel tax is gone and SEBI changed the rules for angel funds. What does that mean for me as an angel?

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  3. The India reference on short vs long term capital gains, holding periods, and rates for equity, funds, and property, so you... ClearTax Article Capital gains tax in India ClearTax
  4. An explainer of SEBI's 2025 rules for angel funds, including the accredited investor requirement and what it means for who can... Treelife Article Angel fund registration in India: the revised SEBI framework Treelife
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