In Conversation with Leading Entrepreneur Brian Condenanza

We are living in the age of start-up companies and small businesses. All over the world, there are creative entrepreneurs with life-changing business ideas. But they lack the capital to bring those ideas into reality. That’s where angel investors come in. Here to explain the art of angel investing is entrepreneur Brian Condenanza.

So Brian, how does an angel investor make money?

An angel investor makes money when the business you invest in hits a certain checkpoint, also known as an “exit.” This can present itself in a few different ways. The start-up may become big enough that a larger company wants to buy it as a subsidiary. This is one of the best ways that you’ll get a payout as an angel investor. Another way is if the company gets big enough to go public. Here’s a tip: you want to know which one of these you anticipate happening before you write a check.

How do you choose businesses to invest in?

There are a lot of factors. First of all, I try to keep a diverse portfolio. If I’m investing in five businesses at a time, I try to straddle those across two or three industries. This helps protect you against certain crises. For example, at the onset of the pandemic, restaurants started to struggle and many of them closed. But e-commerce increased exponentially. So it’s good to diversify your holdings. Second of all, I make sure that all of the start-ups I invest in have a solid business plan that details how and when I will make my money back. Are these things subject to change? Yes. But you never want to invest in a business that doesn’t have a very specific plan for paying you back.

Any advice for other entrepreneurs looking to invest in start-ups?

A lot of people think that being an angel investor means simply gifting a check to a novice entrepreneur. They couldn’t be more wrong. You have to cultivate your investment. Think of it this way: let’s say a friend gives you a rose and you put it in your yard. If you then ignore it for six months, what will happen? It’s likely that it will die. But if you prune it when necessary and water it regularly, you’ll be rewarded with gorgeous, full blooms. As an angel investor, you need to tend carefully to your investments and ensure their success.

Whether it’s the next hot tech start-up or a great e-commerce business plan, angel investors help bring talented entrepreneurs into the market. According to Brian Condenanza, investing in small businesses means investing in the future.