Startup Investing

How OurCrowd chooses startup investments

We frequently get asked about our investment methodology. Our investment process has been honed by the decades of investing experience our senior management has. One interesting note: Our founder and CEO, Jon Medved, managed a startup portfolio of almost $300M. The rest of OurCrowd’s management team has serious chops, too. We’ve all got experience building and running our own companies, management consulting, equity research, investment banking, and portfolio management. **Remember, though OurCrowd members can choose to invest in as many (or little) of the companies we list for investment, OurCrowd invests in every deal we show to investors. We’re ponying our own money up alongside the crowd. So, what do we look for in making an investment in a startup? OurCrowd’s 5 point investment checklist Great team: Successful startups are founded by great people. So, when we look at potential investments, we give serial entrepreneurs special attention. We’re looking for people who have built and managed companies. Failures are OK, too. It’s the process of realizing an idea, building out a plan that we’re looking for.  Great people are...

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Now, investors in Israeli startups will have an easier time monetizing their shares

Markets for shares in private companies have seen a roller-coaster of a ride the past few years. Companies like Sharespost and Secondshares, were thriving firms, enabling founders and early investors in startups to sell some or all of their stakes — without the need for an IPO or M&A transaction. These markets were a godsend for many entrepreneurs and early-stage investors. But that was all before Facebook IPO’d. The massive social network provided so much of the liquidity on these exchanges that after Facebook went public, these markets saw their liquidity dry up. Matching supply and demand in private shares Low liquidity in private shares markets amplifies the effects of small transactions. Just like in thinly-traded stocks on Wall Street, one buyer or seller can cause share prices to swing wildly given the large differences in Bid and Ask prices. Same thing goes for private shares. If a founder is looking to unload a portion of his stake, just the signal of a seller in the private stock could send the stock price reeling. Major stock exchange, Nasdaq believes...

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SHOCKER: Angel investors DO make money

There’s been an interesting back-and-forth occurring on TechCrunch the past couple of weeks about angel investing performance. The Anti-Camp: Angel investors can’t win In this corner, we’ve got Wealthfront’s Andy Rachleff. He penned an article entitled Why Angel Investors Don’t Make Money…. In his post, Rachleff explains how professional venture investors do make money (and at that, a small minority). The winning formula? Those premier venture firms succeed because they have proprietary knowledge of the characteristics of winning companies In his view of the world, there are winners and losers (losers mostly). The few who understand this “proprietary knowledge” make money at the expense of those who don’t. He doesn’t buy the idea that angel investors — without the large infrastructure and different incentive structure from traditional VCs — are taking share from venture capitalists. The Data-Doesn’t-Lie-Camp: Angels do make money Then we’ve got Robert Wiltbank’s Angel Investors Do Make Money. Wiltbank, a professor and angel investor himself, takes a hard look at angel returns via a recent study he published at Willamette University. Wiltbank’s research actually shows that...

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