The two possible approaches mentioned in the question are very, very different from each other.
Investing in public technology stocks in the stock market (such as Google, Apple, and many smaller companies) is something that anyone can do, can be started with a very small amount of money, can be experimented with before committing (by establishing a ‘shadow portfolio’), can be easily unwound, and for which there is an enormous amount of instruction, advice and industry news available.
This is one of the trickiest situations, and for a tech-based startup where the Founder/CEO is not him- or herself a tech person, it may well be THE trickiest situation.
In large part it comes down to the integrity and personality of the CTO, and the quality of the relationship with the CEO. If both are straight-shooting professionals, then a full, private, direct discussion/negotiation is probably in order. Read more
James H. Clark photo via Wikipedia Commons
Investors are people too. They evaluate you like you should assess a possible co-founder or first employee. What are your credentials? What have you done that would convince me that my money is safe in your hands? Only after they see you as fundable, do they want to assess your plan for fundability, not the other way around.
Even with great credentials, it is all too possible for an entrepreneur to come across as a high risk investment. Here are some “rules of thumb” that indicate a marketable and experienced entrepreneur: Read more
I believe that you’re over-complicating the issue. In the US, taxes are taxes, and the only question about income is whether you have held the asset for over one year, in order to qualify for capital gains treatment Read more
There are very, very few “professional” angel investors (as opposed to venture capitalists, who are, by definition, professionals.)
That said, many active angel investors were themselves entrepreneurs, which is where they made their initial money that they can now invest. Read more
Image via StartupFinancialModel.com
Most entrepreneurs tend to avoid this area of the business, and as a result are badly surprised by cost realities, and investor expectations. They seem to think that financial projections are simply invented numbers for investors, and not useful. In reality, it’s like jumping in your car for a long hard drive with no destination in mind. Chances are, you won’t enjoy success from the trip.
What is a business financial model, really? In most cases, it is merely a Microsoft Excel spread sheet loaded with your cost and revenue projections for your startup, starting now in time and extending at five years into the future. For more value, a few variables can be added, like product volume growth rate, and number of salesmen, for “what if” analyses. Read more
Realistically it is highly, highly unlikely that you would be able to find an angel investor for any such venture, here or elsewhere. And, speaking to you as an active angel who has personally invested in over 80 companies, I can tell you that if anyone claiming to be an angel investor even hints at offering you funding for it, it is highly, highly likely that they are trying to scam you. Read more