I am looking to learn more about being an accredited investor.

[Nords]

Wow, what a very informative and interesting post. Thank you for the honesty. I will read the books that you recommended and go from there. Thank you again for response.
-lost

Just wanted to thank @Nords for an incredibly insightful post. Even if you aren't looking to be an AI or invest in things of these sorts...it's still a fantastic post about a "lot" of things that $$$ revolves around and is worth the read.

Excellent Post Nords !
Thanks!!

You’re welcome! Someday that’s going to be part of a blog post.

 

[james22]

Fantastically helpful. Thanks.

 

[kcowan]

I cannot compare to Nords excellent post but I can add my 40 pesos. Accredited means that you are not protected by the usual measures like the SEC looking after your interests?

I have been an angel investor many times. Mostly I have found that a $25k investment lead to a write off which is small compensation. I have 2 stories worthy of telling. The first is Burrard Technologies had three salt-of-the-earth founders. I joined as a Board member and discovered that they had a kiosk that would allow theater goers to buy drink tickets at intermission of a play, increasing the take at the bar by 100%. Great right?

So I gave them $35k and got agreement that the CEO would spend the money during 3 months in LA proving the concept. Although the concept was good, there were no qualified buyers owing to structural problems in the industry. When the CEO returned, we had a "come to Jesus" meeting and decided to abandon ship. He went on the return to his consulting career and has subsequently retired. We remain close friends.

Another was a startup named Jones Soda. I met with Jones and believed his story. Bought a bunch of shares at $0.55 and held on as he did the IPO. Got out at $30. This win financed all the many other losses and left us well to the good side.

I could go on but Nords has covered the territory enough. My guess is that this is not what most members here would want?

I have many other stories both good and bad but I think like Nords, you have to be in it for the long haul to make any money. And most importantly, you have to be prepared to lose 9 for every one you win! Not for the feint of heart! We count on the winners being 10x the losers. That just gets you to even!

 

[OldShooter]

... My guess is that this is not what most members here would want? ...

Well, several of us that have posted here have experience.

My sense of the OP's question is that he/she is thinking that this may be a way to make a lot of money. My sense of most of the responses here (me, too) is that we've approached it more a fun thing to do that has some upside. $25-50K has been my range too. An amount of money that DW and I can afford to lose.

So, trying to make serious money at this is probably much riskier than most members here would want, including me. But as fun, it was good and I did come out ahead, net, over 5-10 deals.

 

[Buckeye]

I worked in a start up and the CEO was someone who should have been sued and charged with felonies for the misuse of company funds and resources. Everybody knew what was going on but I was the only person who went to the board and told them very directly what he was doing. Within a couple of months, one of us was no longer working there. If you guessed me, you guessed right. He talked his way out of it and ultimately mismanaged the company into bankruptcy. I'm pretty sure several of the major investors lost millions. And the really sad thing is the medical device we designed, developed, and got approved was a benefit to mankind. I'm proud of the work I did there.

The lesson I took from the experience is there are really bad people out there and evil does triumph over good. That was my first direct encounter with a bad person and it was quite an eye-opener. I hope the big investors remembered I tried to warn them when it all went down the toilet.

 

[kcowan]

I hope the big investors remembered I tried to warn them when it all went down the toilet.

I would have picked a particular Board member and confided in him confidentially. Then it is up to him to take actions as I am not the whistle blower. If he does, he is the hero and if he does not then he is the goat. Meanwhile I keep my job. If the Board member discloses what I said confidentially then I have the grounds for a lawsuit.

 

[Buckeye]

I would have picked a particular Board member and confided in him confidentially. Then it is up to him to take actions as I am not the whistle blower. If he does, he is the hero and if he does not then he is the goat. Meanwhile I keep my job. If the Board member discloses what I said confidentially then I have the grounds for a lawsuit.

I actually went to the Chairman of the Board because I knew him a little. I had worked with his son which is how I got the opportunity to join the start-up. It was supposedly a confidential conversation but I was realistic about it ultimately getting back to evil CEO. But it didn't matter. I couldn't stand by and watch what was going on without speaking up. I don't believe in going along to get along. I would do it all over again...but sooner!

About 5 years later, I got a call from someone who was vetting evil CEO for another job. I told the guy straight up that evil CEO was a liar and a crook and I warned him he better hold onto his wallet if he hired evil CEO. Evil CEO did run his scam on another company but I don't know whether it was the one that called me for a reference.

It was a great learning experience about how the 'real' world works. It makes me wonder how many of these scammers are out in the start-up world. It seems so easy for them to blame all sorts of other factors (especially regulators) for the failure of prior start-ups they were involved in.

 

[RunningBum]

I had a chance years ago to invest in a startup, friend of a friend. Something in the medical field, I think they were working on some kind of test that sounded both reasonable and marketable. Tempting, but I decided I knew too little about the medical field to evaluate, and virtually nothing about how to evaluate the financials of a startup to see if it had a chance and if I'd be getting a fair cut. I had the money to risk but it felt like a blind crapshoot, so I passed. I didn't take it far enough to see if I had to do any paperwork or accreditation to invest. I lost contact with my friend not too long after so I don't know how they turned out.