Welcome to the Angels & Entrepreneurs Summit.
I’m Mike Ward.
Joining me for this historic event are Robert Herjavec and Neil Patel.
It’s a pleasure.
Glad to be here, Mike.
For hundreds of years, a secret market has existed.
Where the wealthy and powerful gained privileged access to the most lucrative business deals the world has ever seen.
And in doing so, they changed the course of human history.
Around the dawn of the 20th century, J.P. Morgan invests in Thomas Edison. Edison’s light bulb would soon illuminate homes, businesses, and cities from coast to coast.
And Morgan’s windfall would help launch the iconic company, General Electric.
A few years later, Cornelius Vanderbilt invests in two brothers – Orville and Wilbur Wright – who ignited an era of flight that would eventually usher in the age of space travel.
Without Vanderbilt’s investment, the Wright Company would have never become a part of the $249 billion aviation firm, Boeing.
Fast forward to 1968.
Using this secret market, Silicon Valley pioneer Arthur Rock invests $10,000 in a little-known startup. It was developing the processors that would transform personal computing.
That startup was Intel. And Rock’s investment made him a billionaire.
Less than a decade later, another man who became a millionaire from Intel backs a brash founder, whose own legacy will stand the test of time.
That angel investor: Mike Markkula.
That founder: Steve Jobs.
And his Apple II personal computer launched America’s first $1 trillion company.
In 1980, when Apple IPO’ed, Markkula’s shares were worth $203 million.
A return of 220,552%.
In the decades that followed, the rich continued to use this secret market.
Securing stakes in the hottest startups long before they IPO’ed.
Long before Amazon, YouTube, and Facebook became household names.
And the average American was locked out of these life-changing deals.
But not anymore.
A powerful Congressional act has now unleashed one of the biggest financial shifts in U.S. history.
Finally, everyone can capitalize on this secret market.
Where startups go from obscurity to being worth billions of dollars in the blink of an eye.
Where one deal can transform a small amount of money into millions. And, for some, even more.
The next Alibaba, the next Uber, the next Google is out there.
And now, two of the most successful angel investors in the world are going to help you find them.
Robert, you’re the founder of the Herjavec Group – your cybersecurity firm that generates $250 million a year in revenue.
But that’s not why most folks know you.
You also star in the Emmy Award-winning TV show, Shark Tank.
Unbelievable, isn’t it?
Never in a million years did we think a show about angel investing would become such a hit.
It’s pretty clear you tapped into something.
People have wanted to get a glimpse inside this world of angel investing – it’s exciting – a little mysterious.
They’re constantly seeing stories about this person or that person making an absolute fortune from some unknown startup, suddenly becoming a household name like Uber, Airbnb, Space X, or Bird scooters.
And when you look at all the money flooding into these deals – it’s astounding.
It really has become a craze.
Back in 1995, $8.1 billion was invested in startups.
Early 2000s, you’re looking at a little over $15 billion.
Now it’s $99.5 billion.
And Mike, that’s just in the United States.
You start adding in Europe and Asia, you’re over $204 billion.
There's clearly a lot of buzz around angel investing – but despite that, a lot of folks still aren’t exactly sure what it means to be an angel investor.
Or how to become one.
That’s why we’re here.
So you're going to show them all of that.
And that's in addition to the extraordinary angel investing examples we've already covered...
Right – and even though we can’t guarantee that the incredible returns we covered are going to happen for every investor every time... even a fraction of these – even one – can change your life.
We’ve got a lot of ground to cover today.
For the beginners watching, we’re going to discuss Angel Investing 101.
We’re going to talk about how much more lucrative it can be to back startups versus stocks.
And how easy it is to get started.
We’re also going to talk about the risks, because these are speculative investments.
They absolutely are.
That’s why you’ve developed what you call your “1,000X Formula.”
It helps determine whether a startup could shoot up 1,000X – or whether it’ll just go up in flames.
But that’s just one piece of the puzzle.
That formula is only effective if you can get your hands on the hottest startup deals.
If you wake up one morning and decide you want to become an angel investor, that doesn’t mean the next Airbnb is going to knock on your door and beg for your money.
So you’re going to share your “#1 Secret for Finding Billion-Dollar Deals.”
And you already have the scoop on two angel deals that made the cut.
Let’s jump right in.
Robert, basic question: Someone stops you on the street and asks, “What is angel investing?” What do you say?
A million ways to answer that – but I have one I really love.
Imagine being one of the first to invest in the next Steve Jobs, the next Bill Gates, or Elon Musk.
I’m talking the next generation of visionaries.
They’re out there right now working on ways to cure cancer, conquer artificial intelligence, produce healthy food for a rapidly growing world population…
You can be right there, at the beginning of their stories – when their companies are called startups because they’re just starting up.
You’re investing before they IPO, if they ever do.
And because you’re there at the beginning, the upside is infinitely greater.
That's angel investing to me.
Love that answer.
Neil – like Robert, you’ve amassed a great deal of wealth as an angel investor.
Something else you both have in common: You’re two of the most successful entrepreneurs alive today.
You created one of the top 100 most brilliant companies in the world.
That’s according to Entrepreneur magazine.
You’ve made the White House’s list of the top 100 entrepreneurs under the age of 30.
Then the United Nations’ list for top 100 entrepreneurs under the age of 35.
Tough getting older, isn’t it?
Yeah, I guess so.
Robert explained what angel investing means to him.
Why don’t you give us your answer?
Mike, when we were kids, we all dreamt about what we wanted to be when we grew up.
Some of us wanted to be doctors, or professional baseball players, or policemen. I wanted to be an astronaut.
Most of us never became what we dreamt of as kids.
But as angel investors, in a way, we can make our dreams come true.
Will I ever walk on the moon? No.
But what if I was one of the first people to invest in SpaceX?
SpaceX is building rockets that carry cargo and eventually astronauts to the Space Station.
They’re planning missions to Mars.
The money I used to back SpaceX in those early days, no matter how small, would be helping make all of that happen.
And let’s not kid ourselves. You could make a lot of money from being there at the very beginning.
Mind-blowing amounts of money.
SpaceX doesn’t go from being worth $18.8 million to $30.5 billion without their early angel investors.
Can you imagine being on that rocket ship as it soared 162,234% in value?
Or what about 23andMe?
You want to spot a possible health risk that could hit you in 20 years so you can prevent it today? You’re using their genetic test.
23andMe jumped from a valuation of $47 million to over $2.3 billion.
Angel deals obviously don’t all play out like this. Some don’t work out at all.
Others, you can get these rare, massive outcomes.
Look at Alibaba.
It’s now one of the biggest e-commerce companies in the world.
The earliest angel investors got in when it was worth $10 million.
It’s reached $542 billion since.
Without you, as one of those early angel investors, none of this happens.
Mike, there are so many stories of people launching startups in their garages or basements that go on to become worth tens of billions of dollars.
Jeff Bezos started Amazon in his garage.
He had about 20 angel investors at the beginning.
If they held on to their shares, last year they would’ve each made $7 billion.
A return of 14,000,000%.
Reid Hoffman started LinkedIn out of his apartment.
His startup went from being worth roughly 10 million to $26.2 billion.
Pierre Omidyar launched eBay from his living room.
In 1997, eBay was worth $20 million.
By 1998, $21 billion.
That’s 105,000% in a year.
If you’ve never been an angel investor, a company growing that fast is impossible to fathom.
We’re watching this play out right now with Bird scooters.
Oh my goodness, talk about a startup that exploded.
You can’t walk around a major U.S. city without seeing people zipping up and down the sidewalks on these scooters.
Grandmas, teenagers, everybody’s doing it.
Bird is a force to be reckoned with.
They took an old technology – scooters – modernized it…
And they used it to solve a big problem.
In busy cities, it can take a long time to travel short distances in a car.
But a scooter on a sidewalk? You can get where you’re going pretty fast.
In under a year, they went from being worth about $25 million to $2 billion.
That’s a 7,830% jump.
Doesn’t that sound exciting?
Who doesn't want to be a part of that?
For a long time, though, most Americans couldn’t become angel investors.
For most of history, this was a private market, or as you put it earlier – a secret market, exclusively for the rich and powerful.
If you couldn’t invest $50,000 or $1 million into each deal – tough luck for you.
That all went out the window when Congress passed the JOBS Act.
It had a specific clause in it – Title 3 – that changed everything.
It instantly, like that, made 240 million Americans eligible to become angel investors.
Basically, anybody over the age of 18.
Now you can invest $50, $100, maybe $500 or more in a startup and it can change your life.
What’s wild is the vast majority of people have no idea this happened.
They’re missing out on one of the greatest drivers of wealth creation that’s ever existed.
I mean, the reason I got into angel investing is it allows the little guy – the underdog – to become a multimillionaire.
A buddy of mine – Chris Sacca – perfect example of that.
Forbes estimates angel investing took him from a net worth of basically nothing to $1.2 billion.
Chris was one of the first to cut checks to Twitter, Uber, Instagram, Kickstarter, and WordPress.
He’s been on Shark Tank a few times.
Yes, he has.
Wears that same cowboy shirt every time too.
It’s kind of “his thing.”
But when you reach that level of success, you can wear whatever you want.
You both have gone from rags to riches as well.
Robert, anyone who watches Shark Tank has probably heard you tell the story of your childhood; your early years were no picnic.
You, your mom, and your dad had to escape communist Yugoslavia…
Look, it wasn’t easy back then.
Dad was a political prisoner.
He had the courage to speak out against communism – and that got you arrested in those days.
They locked him up 22 times.
After that 22nd time, they told him, “Come here again, you’re never getting out. It’ll be the last time anybody sees you.”
Mike, when you’re facing that kind of nightmare – yeah, you’re doing whatever it takes to escape.
That’s what we did – with $25 to our name and one suitcase between us.
We snuck over the border into Italy and got on a boat called the Cristoforo Colombo – named after the explorer.
We found a picture of that boat.
Yeah, check it out.
Wow, that’s it!
This ship took you to Canada, right?
And we didn’t speak a word of English when we got there.
We had no money, and we lived in a friend’s basement for 18 months.
Dad was working two to three shifts back to back to back for any job he could get.
It was really tough.
I learned my work ethic from my parents. I didn’t want their sacrifices to go to waste.
And look at everything you’ve accomplished.
I’ve been very fortunate.
When I started my first business, I wasn’t looking to get rich.
I just knew I didn’t want to be poor ever again.
Neil – like Robert, you’ve already experienced enough success for three lifetimes.
Which is remarkable, considering you also came from very humble beginnings.
Tell us about your early years.
I was born in London, but when I was really little, my parents decided they wanted to give me and my sister a shot at the American Dream.
We ended up in Orange County, California, living in low-income housing.
Money was really hard to come by.
My dad worked in a print shop. My mom was a teacher, but when we got to America, nobody accepted her degree.
So every morning, she would push me and my sister in a stroller to school and then teach there for free – no paycheck.
She did this for six months, hoping they’d give her a paying job. And they did.
My parents taught me you have to bust your butt in this country to make it – nobody is going to hand you anything.
Would you say they were your inspiration when you launched your first business?
Which, correct me if I’m wrong, you did before your 16th birthday.
They definitely inspired me.
And yes, I was almost 16 years old.
I was working at Knott’s Berry Farm – that’s an amusement park.
I was making $5.75 an hour picking up trash. They told me if I’d clean the toilets, I could make an extra 50 cents an hour.
I was like, “Woah, $6.25 is way better than $5.75.”
Give me that toilet scrubber!
I wasn’t above cleaning toilets to earn a paycheck.
Still, I wasn’t satisfied. I was searching Monster.com at night for better jobs.
Then I discovered Monster.com was making hundreds of millions of dollars.
I was like, “This is just a website that lists jobs, I can create something like this.”
And I did.
Suddenly, I’m getting over 100,000 visitors a month. I realized I was pretty good at this internet stuff.
So I launched a consulting company. Ad agencies were hiring me to work with major brands.
At 16, I was making $20,000 a month and I didn’t look back.
And today you’ve become a secret weapon for Fortune 500 companies.
Your client list is a who’s who of multibillion-dollar firms.
And somehow you found the time to write the book Hustle.
The title perfectly describes your life. You've been hustling for quite some time.
And not surprisingly, it became a New York Times bestseller.
It’s been a fun ride, that’s for sure.
Neil’s story, it goes to show you, this is America – this is the land of opportunity.
His parents wanted to give him a chance at the American Dream. A lot of people have different ideas about what that means.
For me, it’s about being in control of my own destiny.
That's what I love about angel investing.
It gives me control of my own destiny, because I’m right there – with these companies – at the very beginning of their stories.
When you invest in a startup, the founders will probably know your name.
They’ll ask your opinion on their strategies, growth plans – you’re essentially one of their partners.
And that’s not just because I’m on Shark Tank. It’s programmed into the DNA of the startup community.
As an angel investor, you can have some control over the future of every startup you back. And that’s really exciting.
This doesn’t happen with publicly traded companies.
Say you buy shares of Netflix.
Do you ever expect to get a call from Reed Hastings – the founder and CEO – and he’s like, “Mike, I got a big-budget movie I want to green light.
“It’ll cost me $100 million. I love it, but my guys in accounting think I’m crazy.
“I’m sending you this script to get your take.”
He’s got millions of shareholders.
Neil just mentioned SpaceX – one of Elon Musk’s companies.
What about another, Tesla?
If you buy shares of Tesla’s stock, do you expect to hear the phone ring, you pick it up and it’s Elon on the other end going, “Mike, what do you think about the design of this new prototype I’ve been working on?”
He’s not making that call.
Didn’t Elon build you a custom Tesla?
Yes, incredible car, too, but I know Elon.
And I know he leaned heavily on his angel investors in the early days.
At one point, they were debating whether they could realistically take on the big boys like Ford and Mercedes. Or whether Tesla should just sell them the software and motors.
They decided, “We’re going to build the best electric cars.” And they did.
Despite all the drama in the news, they made the right decision.
When Tesla was a startup, it was worth $7.5 million.
Today it’s a publicly traded firm on the NASDAQ and has reached a valuation as high as $64.8 billion.
Those early angel investors clearly played a role in this company soaring 863,900%.
A lot of folks aren’t sure what to make of Elon Musk.
Is he being controversial to get press? Is he maybe a little crazy?
If you’re one of his angel investors – does it even matter?
No, it doesn’t. He made them a lot of money, so his angel investors should love him. He was a great partner.
Okay, but when you talk about partnering with these founders, you don’t have to sit at a desk in an office or punch a clock.
There’s no 9-to-5 grind.
No, no, no. Angel investing is the furthest thing from a job.
Don’t get me wrong, I love running my business.
I hear my alarm ring at 5 a.m., I jump out of my bed like “Woohoo! I’m ready to put in a hard day’s work.”
But I got into angel investing because I can potentially make the same returns as I would from my own companies.
Look at it this way.
I started my first company with $100. Eight years later, I sold it for over $30 million.
That’s a 300,000X return.
I took $100,000 from that deal and launched the Herjavec Group. Now it’s generating $250 million a year in revenue. Incredible return.
Only angel investing can deliver windfalls like this.
Robert hit the nail on the head.
Outside of starting your own business, where else can you potentially turn $50 or $100 into a life-changing windfall?
Actually, that’s a perfect segue to what I want to talk about next.
Check out this headline from Inc. magazine.
It says that…
If you’re investing in stocks – specifically tech stocks – you’re missing 95% of the gains.
That’s pretty accurate.
I know, but if this is the first time you’re hearing this, it’s shocking.
Most investors rely on stocks for their 401(k)s or IRAs.
And Wall Street has created a lot of wealth for people over the years. Probably a lot of people watching this.
But now we’re telling them, “That’s peanuts. There’s this private market out there where angel investors are taking 95% of the winnings off the table before YOU ever get YOUR shot.”
In the old days, most Americans couldn’t get into this private market. Now they can.
So, big question: How do they make money from angel investing?
There are three main ways. They’re called “exits.”
The first type of exit: you invest in a startup, it takes off.
And down the road, it IPOs on the NASDAQ, New York Stock Exchange, or wherever.
Those three letters, I-P-O… they generate a lot of excitement.
Because for most, this is the earliest they can invest in a company. It’s as big as it gets.
Not for angel investors. And I only need four letters to prove it.
It’s hard to find somebody who doesn’t know what their remote looks like.
If a room in my house has a TV, my wife has bought a Roku for it.
That’s because people are cutting their cable cords. They’re picking and choosing which channels they like. And using streaming services.
Roku makes this easy.
They announce they’re going public. Their IPO is a hot ticket. But guess what?
From IPO to peak, Roku’s stock has jumped 264%.
Now guess how much – you already know the answer.
Mike, guess how much Roku has jumped since its startup days.
Another way to think about it. Picture one of those pie charts.
The whole pie – that’s 48,481%.
That’s what was there for angel investors.
Then you have this tiny, little sliver. That’s what was left over for everybody else.
Everybody who had to wait until IPO day to invest.
Long story short, if you’re waiting until a company goes public to invest, you risk settling for crumbs.
So don’t wait until an IPO to invest.
Target startups that could eventually IPO.
If and when they do, you are going to be a legend.
That’s how Dropbox’s story played out.
If you need to send somebody a large document or a 1 terabyte video, you can’t attach it in an email. It’s too big.
You need a company like Dropbox.
Their IPO was a headline grabber. But should it have been?
IPO day: Dropbox was already worth over $11 billion.
When a company is already worth that much before they go public, you have to ask yourself – can they continue to multiply in value?
Since IPO day, Dropbox has only gone up as much as 51%.
Not exactly the kind of money that has you shopping for a beach house in the Hamptons.
Dropbox’s angel investors might have been, though.
They had the chance to get in when the company was worth $5 million.
$5 million to $11 billion – that’s 336,300%.
Forget about a small beach house in the Hamptons. Now you’re mansion shopping.
Or private island shopping.
Seriously though, ahead, you’ve got something that could help our viewers uncover angel investments with that kind of potential.
Your “#1 Secret for Finding Billion-Dollar Deals.”
You’re also going to walk everyone through your 1,000X Formula. It helps you quickly analyze every angel deal.
Most importantly, we have two startups ready to showcase that have passed that formula. They each have the potential to deliver a 1,000X return.
But right now, I want to stay on the topic of IPOs. We’ve seen a pretty major shift happen.
In that there’re fewer IPOs now compared to the late ’90s and early 2000s.
More companies are just choosing to stay private.
Why do you think that’s the case?
There’s no reason to go public to raise cash.
We already shared the numbers – the money being invested in startups is insane.
Now founders can just keep their companies private. No worrying about hostile takeovers.
No worrying about chaos in the stock market bringing down the value of their companies.
I get it, when someone hears there are fewer IPOs, they may think, “Well, how am I supposed to earn a return now?”
That’s why the second exit opportunity is so big.
M&A – mergers and acquisitions.
Right now, big firms are buying startups left and right – and paying hefty premiums.
In the ’80s and early ’90s, $300 billion, $400 billion, or $500 billion a year was being spent on mergers and acquisitions.
Now it’s around $4 trillion, give or take.
There are tons of companies with oodles of money on the hunt for startups to buy.
Famous story: March of 2010 – two guys from Stanford pitch a photo-sharing app to angel investors. They’re valuing their company at $2.1 million.
For the next seven months, they’re tinkering with their app, working out the bugs.
Only 80 people have downloaded it. Not even enough to fill a movie theatre.
Then they catch fire.
Two months later, their app – Instagram – has over one million users. It’s exploding.
Becomes a household name.
And then Facebook comes calling. They buy Instagram for $1 billion.
From startup days to acquisition, the value of Instagram jumped 47,519%.
They didn’t need to go public. And their angel investors made a ton of money.
Facebook, Microsoft, Cisco, Amazon, Google – the big guys – they have the cash to buy just about anybody they want.
And that’s what they’re doing.
I don’t know if this has ever happened to you, but sometimes you can get the best of both worlds – an acquisition and an IPO.
Absolutely. You have a story to share here, don’t you?
I sure do.
So, Mike, I was an angel investor in a startup called Walk Score.
It was founded by two former Microsoft engineers.
Walk Score patented a way to measure the value of the schools, parks, restaurants, and a long list of other perks in a neighborhood.
They combined all these things into a score, 0 to 100.
Founders build their prototype, send it to 15 people. They shared it with their friends.
Within 24 hours, 150,000 people had tried out Walk Score.
Soon Zillow, Trulia… altogether, 30,000 real estate websites began to use it.
But one decided they needed to own Walk Score – Redfin.
They opened their checkbook and asked the founders, “How much?”
And how much was it?
I can’t tell you, but I can say it was a lot of money.
So I invested a tiny amount in Walk Score early on.
When Redfin bought them, I was handed a check, I believe it was for around $40,000.
But as a kicker, they also tossed in Redfin shares.
How nice of them.
At the time, Redfin was a private company.
Then it IPO’ed.
I sold those shares and made another $88,000.
So a tiny investment transformed into a $128,000 windfall.
Mike, if Redfin never IPO’ed, that doesn’t mean Neil would’ve been stuck holding those shares.
When you have a piece of a hot startup, most likely a large venture capital firm or even another angel investor will offer to buy your shares.
That’s the third type of exit.
This is a very, very common outcome.
I was just paid $8.5 million for an investment I made around three years ago.
It was a return of more than 8,400%.
At this moment, I have another angel deal in my portfolio that is up 8,200% in about two years.
I’ve got an offer to sell my stake in that one too.
So you’re talking about making...
Eight figures on that deal.
Over $10 million.
Why don’t you sell?
I believe I can make even more if I wait.
Or maybe I never sell.
There are situations where it doesn’t make sense to.
If you know how to access the right deals, you can collect dividends.
And not those pathetic dividends stocks pay. They’re averaging, what, like 2% a year?
That’s about right.
I’ve got an angel deal in my portfolio that’s paying investors up to 110% a year in dividends.
Mike, earning 110% on your money just on the dividends… all I can say is “Wow.”
Publicly traded stocks aren’t paying you that.
Then you have more dividends coming next year. Plus, the potential for a large exit down the road too.
I’d be more than happy to just sit back and collect those kinds of checks year after year.
The numbers we’ve been throwing around today are nearly incomprehensible.
And when you’re talking about transforming small amounts of money into six figures or millions of dollars… one word comes to mind: risk.
You can’t have this kind of upside without the dreaded “R” word.
What do you say to people who think angel investing is risky?
I say, “Yes. Yes, it is.”
Angel investing is speculative.
And it’s certainly riskier than buying shares in blue-chip stocks.
But this comes down to diversification.
A lot of these startups don’t make it.
So if your goal is to invest in one angel deal and call it a day, yeah, you are opening yourself up to a lot of risk.
That’s the case with any strategy that involves putting all your eggs in one basket.
So don’t put all your eggs in one basket!
There’s no reason to.
You don’t have be rich to build a diversified portfolio of startups anymore.
You don’t have to invest $50,000 or $100,000 or more in each deal.
If you only have $500 to play with, you can now take that, divide it up into smaller pieces, and invest it in 10 different startups.
I’d argue a diversified portfolio of startups is less risky than a portfolio of… maybe, NASDAQ stocks?
Sounds crazy, but hear me out.
There have been…
What do you think, at least 10 studies comparing stock market returns to angel returns?
Ten that we know about.
And they all came to the same conclusion.
The Federal Reserve studied angel investments over a 35-year period.
According to the Fed’s data… and I have two piles of money to demonstrate this.
You brought props?
I did, didn’t you?
I wish I had now.
This first pile – technically, it’s not a pile – just a single dollar bill.
For every dollar you could’ve made in the stock market…
Angel investors could’ve made what’s in this second pile from backing startups: $1,650.
I’ll take that second pile.
It’s about to get pretty big too.
If you had invested $500 in angel deals, you would’ve been sitting on over $165,000.
That’s just over the first 10 years of the Fed’s study.
After that, the numbers are astronomical.
Of course, there’s a wild card.
If you strike gold and one of your angel deals becomes a unicorn, the math changes big time. All bets are off at that point.
That term you just mentioned: unicorn.
Let’s make sure everybody knows what you mean.
Definitely not talking about some mythical horse with a horn on its head.
“Unicorn” means a startup worth $1 billion or more.
“Decacorn” – that’s a startup worth at least $10 billion.
I’m not sure they even have a nickname for one worth $100 billion.
They should just call it private-island money, because if you invest in a startup that reaches a $100 billion valuation…
Start shopping for that private island – it’s true.
When you’re in the position where you have all of these exciting deals at your fingertips, you need a way to determine which could be winners – and which are nothing more than hype.
It’s your 1,000X Formula.
Tell us about it.
Why don’t you kick this one off?
It is very simple.
Smart company + big problem + big market = big money.
Invest in smart companies that solve big problems in big markets.
When I say “smart,” I mean a company that’s stable.
The founders aren’t flying by the seat of their pants.
They have a clear vision and a plan for executing.
This formula helps us target startups that are more predictable – in that, we believe we can count on them to pay a hefty return.
This isn’t the time to be shy. Angel investing is about swinging for the fences.
It’s called the 1,000X Formula because you want to find startups that could pay you a 1,000X return.
And you want to immediately eliminate the deals you shouldn’t touch with a 10-foot pole.
Quick story: Recently, I was offered the chance to invest in a company that hopes to build luxury hotels.
A lot of competition in that area.
Not where they’re planning to build them.
Try to keep a straight face when I tell you this…
What are the chances of that actually happening?
One in a billion.
Mike, this is exactly the kind of deal newer angels chase.
What big problem does it solve?
Not enough luxury hotels in outer space?
Wait… it gets worse.
They’re planning to sell tickets for up to $60 million a pop.
Who’s dying to fork over that kind of money to stay in a space hotel?
This startup fails the formula in seconds.
Believing you’ll earn 1,000X your money on that deal is like a 90-year-old man marrying a 22-year-old bikini model and fooling himself into thinking it’s true love.
For me, I’ll take a smart startup that solves a big problem in a big market every day of the week.
Off the top of my head… Remitly.
Years back, they set out to change the way we wire money.
It used to be that if I wanted to wire money to my relatives in India, I’d have to walk into my local Western Union, take cash out of my pocket – like physical cash – then hand it to a window teller.
Well, that office takes a piece of that transaction. And that’s just the beginning.
Next, Western Union is going to send my money to a local bank they’ve partnered with.
Then it’s going to what’s called a “correspondent bank” in America. Then to another bank in India.
Finally, it lands at the Western Union over there.
And every step of the way, somebody took their piece of the action?
You know it.
Depending on where I send my money, I could lose 25 cents out of every dollar to all these middlemen.
What’s left goes to my family who had to make the trek to pick it up in person.
And it would take days, even weeks, for my money to reach them.
So this guy, he was a top exec at Barclays Bank. He says, “There’s gotta be a better way to wire money.”
He wants to invent a better mousetrap.
He was the right guy to do it too.
At Barclays, he oversaw their mobile banking projects. He realized he could cut out a lot of these middlemen…
Using a smartphone.
He launches Remitly. And he builds an app that allows me to wire money directly from my phone to someone in my family.
The money can be deposited in their mobile wallet, or their bank account, or they can still go pick it up. All for a fraction of the cost.
And instead of days or weeks, the money can arrive instantly.
What a great business idea.
And Mike, it passes the formula with flying colors.
Smart company + big problem + big market.
Huge market. $642 billion a year and growing.
As an angel investor, I assume this added up to big money.
I got into Remitly pretty early on.
I made a $25,000 investment and I cashed out with a $425,000 payday.
So definitely a yes.
You invested alongside the World Bank, as well as billionaires, Jeff Bezos from Amazon and Eric Schmidt, who ran Google.
Paul Allen’s firm too. He and Bill Gates founded Microsoft.
You’re talking about some pretty heavy hitters.
That’s just another thing to love about angel investing. Look at the incredible people you can connect with.
When you invest early, you can grow your network with some of the world’s most successful investors and founders – the brightest minds in Silicon Valley and around the globe.
Eventually, they may start bringing you deals.
I know some of my best angel deals have come from networking with other angel investors.
Neil’s startup, Remitly, clearly made the cut with your 1,000X Formula.
Robert, why don’t you share one of your angel deals that did as well.
I love Hungry Harvest.
Really smart company with an incredible founder – a young guy named Evan.
Decides he wants to start an online business that sells ugly fruits and vegetables.
Why would anyone in their right mind want to do that?
It solves a big problem. One-third of all food produced goes to waste.
Adds up to 1.3 billion tons a year.
Farmers grow these perfectly tasty carrots, or apples, or tomatoes.
Because of some minor speck, the grocery stores won’t buy them. They end up at the landfill.
Evan says, “Wait – there is nothing wrong with this food. And I bet a lot of people agree with me.”
He goes to local farmers, buys up all their so-called ugly produce and delivers it to customers every week. And get this…
For every package he delivers, he delivers another to a homeless shelter or foodbank.
So smart company + big problem.
Check and check.
And this is a big market.
Online food delivery is an industry that’s on track to reach $365 billion a year.
And Mike, this is so important to remember: You want to invest in founders like Evan.
They take your money and it’s like pouring kerosene on a fire.
Before I invested in his company, Evan barely had any customers – a few hundred.
Today, Hungry Harvest has so many people dying to become customers, they can’t take them all. They have a waitlist of like 30,000 people.
And sales are through the roof, up 25,714%!
So did this equal big money?
I haven’t exited yet.
I’m holding on to my shares.
I want to see where this ride takes me!
This 1,000X Formula of yours – it’s simple and it’s brilliant.
It helps you quickly determine whether a startup has the potential to become a unicorn or better. But it doesn’t work on its own.
You also need your #1 Secret for Finding Billion-Dollar Deals.
This is what separates the legends from the leftovers.
Let’s hear it.
Are you ready?
DEAL FLOW! DEAL FLOW! DEAL FLOW!
Neil, you forgot something… DEAL FLOW!
The biggest challenge for any angel investor is getting access to the best deals.
Sure, you can search around the internet and you’ll find startups begging for money.
And there’s always somebody in your town who wants to open a bar or restaurant.
Those are desperation deals – that’s not deal flow.
When the founders of the NEXT Uber, Airbnb, Facebook, or SpaceX personally ask YOU to be one of their first angel investors – that’s deal flow.
Nothing is more valuable. It’s priceless.
I know of a guy; his name is Jason.
Big-time angel investor. He was handed the deal of a lifetime on a silver platter.
Young founder comes to him and says, “I have two Lincoln Town Cars driving around San Francisco.
“When somebody wants to ride in one of them, they hit a few buttons on my app. Minutes later, they’re picked up.”
Obviously, I’m talking about Uber.
Back when they only had two cars driving around San Francisco, Uber was valued at $5 million.
Jason had the connections – he had the network.
That’s why he was invited to be one of Uber’s first angel investors.
A while back, when news started to break that Uber was going public – the valuation being tossed around for IPO day was $80 billion.
It’s so rare to get the chance to invest in a startup that goes from being worth $5 million to $80 billion – that’s 1,599,900%.
That’s why it’s all about DEAL FLOW, DEAL FLOW, DEAL FLOW!
And DEAL FLOW!
Ya know, we’re at this amazing moment in time.
The walls have finally come down; you don’t have to be rich, or famous, or powerful to become an angel investor.
But I’ll tell you, it doesn’t matter if Congress opened the doors for everyone.
With the hottest startups, the next Uber or Bird Scooters, you still need someone to open another door, so those founders invite you to invest.
We’re here today, because we want to help open those doors for as many people as possible.
Angel investing presents the best opportunity for someone to transform a small amount of money into potentially millions upon millions of dollars.
With that, we have a major announcement to make.
Today, we are officially launching the…
This is a first-of-its-kind venture. And it’s going to be big.
Yes, it will.
We’ve created something that’s going to unite our members with some of the most successful angel investors on the planet.
Folks like myself, we have the expertise. Most importantly, we have what we just talked about: deal flow.
We’ve arranged for the founders of the most coveted startups – the ones with unicorn potential – they’re going to pitch their angel deals right to our members.
Putting myself in the shoes of someone watching this at home…
I’m intrigued. But I’d have a lot of questions.
The first of which being: I join the Angels & Entrepreneurs Network, what happens?
Great news, you just became a Founding Member.
Every month, our team is vetting hundreds of angel deals.
99% of them, we throw away immediately.
They fail the 1,000X Formula. And that’s the point.
From those that do make the cut, every month, we’re going to select two startups and showcase them.
For each, you are going to receive what’s called a Due Diligence Package.
So a Due Diligence Package sounds fancy and official – because it is.
Founders place their most sensitive information in them.
You’ll see their pitch deck – that’s their official investor presentation.
You’ll also see documents revealing their business plan, their projections, any proprietary technology they’re developing, every deal they have in the works… it’s all in there.
I take a magnifying glass to every detail in a Due Diligence Package. You’re playing the role of detective.
Could this be the next billion- or multibillion-dollar startup?
You’re looking for clues, a trail of evidence to follow, that gets you to a “yes” or “no.”
We’re going to help with that.
For every startup, we’re adding our Angel Investor Action Plan to the mix.
We’re going to give you our independent analysis and research on that startup.
I’m also going to film a Deep Dive Video. I’ll go through the deal, assess all the risks, and explain what I like and dislike.
I’ll discuss whether it's a startup that could IPO, get acquired, or eventually kick out enormous dividends to its early investors.
And if you decide you want in on that angel deal, you’ll receive step-by-step instructions.
You just follow the instructions – it’s very easy.
And we have a pretty big surprise.
We’ve already selected two startups to showcase.
We most certainly have.
Two potential unicorns?
Mike, you don’t become an angel investor to find deals that could make you 10%, 50%, or even 100%.
You can take your chances with the stock market for that.
You should only be seeking deals that could pay you 1,000X or more.
That way, if they deliver only half… or one-tenth… heck one one-hundredth of that – you’re still going to make a lot of money.
Take Remitly – it had 1,000X potential.
I transformed my $25,000 investment into a $425,000 payday.
I just had another deal pay me $8.5 million.
Neither were a 1,000X return, but I’m still really happy about how things played out.
And I’ve got another deal that is up 8,200%. I’m really happy about the idea of making eight figures on that too.
So each of the startups we’re showcasing today could pay out a 1,000X return?
What’s great is we’re giving members the information and research they need to answer that for themselves.
But to answer your question: Yes, in my opinion they do.
Mike, there’s another major difference between investing in a startup versus a publicly traded company.
Time is on your side with angel deals. The terms are already set.
That startup has a valuation that isn’t subject to the whims of the stock market.
This gives you the luxury of time.
We’re going to take advantage of it.
We built this incredibly robust, members-only website. It’s our Virtual Boardroom.
Once you get the details on a startup – you can spend the next week participating in a series of debates with members about it.
Does this startup have what it takes to become the next unicorn? Debate that, discuss it with each other.
Let’s pretend it’s 2015 and you have the opportunity to invest in Desktop Metal. It’s a startup that wants to be the leader in 3D-printing technology.
You’ve gone through all of the information in the Due Diligence Package; the pitch deck looks incredible.
But there’s a catch.
The founders placed a hefty price tag on their startup – a little over $32 million.
So if I was thinking about investing $50, or $500, or $5,000, I better make sure this startup has the potential to become worth billions.
Every angel deal, no matter how much you like it at first, you must pick it apart and punch holes in it.
If you can do all of that and still come away excited, you may have a winner on your hands.
With Desktop Metal, you would have.
In under two years, that company went from roughly a $32 million valuation to over $1 billion.
Then it kept going, hitting over $1.4 billion.
It soared 4,474%.
Time to pop the champagne.
Exactly, and we want you to have the opportunity to do just that.
So one week after you’ve received all the information on a startup, we’re going to put the founders through a Hot Seat Session.
This is a live video chat.
You can submit your questions in advance and the founders are going to answer the most popular ones.
You’re looking for those personality traits you can’t quantify on a spreadsheet.
I look for people with great purpose.
Starting a business is hard.
There is going to be a lot of pain. These founders are going to get knocked down.
The question is, do they have what it takes to get back up?
Tipsy Elves is one of my favorite angel deals because I knew right away the founders were winners.
One was a doctor, the other a dentist.
They gave up their careers to start a company that makes funny and inappropriate shirts for Christmas, St. Patrick’s Day, and so on.
You’re either nuts or a genius to take such a risk.
Something about the founders just clicked with me. I invested when the entire company was worth $1 million.
They’ve done over $100 million in sales since. And they’re still growing!
Members should use these Hot Seat Sessions so they can determine if the founders are winners – like Robert’s guys.
He did pretty well with that deal.
Yes, that’s the purpose of each Hot Seat Session.
And when it’s finished, we release our Hot Seat Briefing. It’s a summary of all the questions and answers.
The goal is to arm you with so much information, you’ll be able to make a smart decision about whether or not you want to invest.
Yes, and once you invest, it can be a pretty wild ride as a startup goes from an early-stage company to hopefully a billion-dollar unicorn.
Talk about how we’re going to keep members updated on every development.
After all, startups are notoriously secretive.
For good reason.
They have to keep what they’re working on under wraps, so competitors don’t try to rip them off.
Which is why, normally, founders don’t offer smaller angels “Investor Updates.”
By “smaller angels,” I’m talking about people who invest less than $50,000.
That’s not happening with us.
It doesn't matter if you invest $50 or $50,000 – or you don’t invest at all.
You will receive Investor Updates for every startup we showcase.
Explain Investor Updates.
They’re like progress reports.
Founders prepare them every month or quarter.
They document where they stand with revenue, new deals they’ve inked.
They’re transparent about any setbacks they’ve experienced because even the best startups face challenges along the way.
Here’s a little secret about these updates.
Sometimes you can use them to get free shares in a startup.
It’s kind of standard for founders to ask for advice on their advertising or hiring or if you can introduce them to a potential client.
If you really help them, they may give you free shares.
I couldn’t even tell you the value of the free shares I’ve received over the years.
Over a million dollars’ worth?
Not a bad perk.
These Investor Updates are so important – I’m going to cover them in our Virtual Boardroom Meetings every month.
I’m also going to talk about them in our Momentum Report.
It’s a streamlined briefing that sums up the major developments with these startups.
We’ve also built a Deal Flow Tracker.
When a startup announces a new valuation, we’ll automatically update it.
Every quarter, we also prepare The State of Angel Investing report. It’s got the major statistics and trends in it.
And what are the hottest trends in angel investing?
A lot of excitement around A.I. – artificial intelligence.
Machine learning is huge.
Also, big growth with smart-home technology.
Anything in cloud computing immediately catches my eye.
That’s a hot ticket too.
Initially, most of the deal flow will come from these startups you’re showcasing.
But we’ve also created private forums where members can share deals they’ve found with each other.
We’re expecting a lot of entrepreneurs to join our ranks as well.
We have a Founder’s Corner for them, where they can talk about their businesses.
Maybe the idea for the next unicorn is hatched there. That could mean more deal flow for our members.
We also want our angels and entrepreneurs networking in the real world.
They can just push a couple of buttons and launch a local chapter in their town or city.
We’ve made it easy to organize meetups at restaurants, bars, or any other spot.
The network effect is very real.
The more people in your network – the more connections you have – the more opportunities you’ll be presented with.
The more you’ll learn too.
Without a doubt.
I'm going to drop a big name.
A long time ago, I met Oprah Winfrey.
I was like, “Oh my God, it's Oprah!”
Whenever I meet somebody that's successful at something – and not just celebrities – I always ask them, “Can you give me a piece of advice?”
Oprah said great leaders – and people who achieve greatness – are great learners.
If you want to get somewhere quickly, go with someone who's already been there.
I love angel investing, because I can continually learn from some of the brightest minds, and that makes me a better person.
So every month, I’m hosting an Angel Investor Master Class with one of the legends.
They’re going to tell you their secrets. They may even share a deal that you can participate in.
That means more deal flow!
And the Angels & Entrepreneurs Network is all about deal flow.
We created this for everybody.
Even if you’ve never invested in a startup before – you can now join forces with the legendary angels and the legendary entrepreneurs.
We’re bringing everybody together.
And you’re going to receive this incredible welcome package. It includes our Angel Investor’s Boot Camp.
It’s a video series – like a 101 course.
There’s also an Angel Investor’s Cheat Sheet. It’s a set of questions every founder needs to answer before you invest in them.
We’re tossing in a Deal Flow Notebook as well.
Perfect for writing down any thoughts you have during those Hot Seat Sessions.
Don’t forget the entrepreneurs.
We have a copy of my book, Hustle, for them.
And that’s a New York Times bestseller.
So let’s get down to business.
We’re officially launching the Angels & Entrepreneurs Network.
You can click the button below to see our special Founder’s membership rate.
Before they do, Mike, we have one more surprise.
Every year, we’re hosting our Angels & Entrepreneurs Retreat.
Miami, San Diego, the Cayman Islands – it’ll always be somewhere sunny.
Members can network with each other. We’ll have founders come in and pitch their startups – everybody in one place.
It’s really just an excuse to throw a big party, isn’t it?
Yes, it is.
There will be cocktail parties with champagne toasts, incredible food, probably a lot of golf, the whole nine yards.
It’s going to be a lot of fun.
Robert I’d like to present you with a Founder’s Membership Card to the Angels & Entrepreneurs Network.
Amazing, thank you!
Any last thoughts before we go?
Just a few.
No matter who you are, there's some point in your life where you arrive at a crossroads.
Go right, that’s the unknown path. But it may make your life a lot better.
Go left, that’s the safe route – you’ve been down that road many times.
And your first instinct is to take the safer route. That’s just human nature.
Angel investing can be this new adventure. There will be risks along the way, no doubt.
But you have the opportunity to grow, to learn, and to see success.
If you take that first step on this path, it can change your life.
Robert, thank you for being here today.
I had a great time! Thanks for having me.
Neil, I have your Founder’s Card too.
I’ll carry it with me everywhere. And I’d like to add to what Robert said.
I came from extremely humble beginnings to where I am now, and I owe so much of my success to angel investing.
Sure, I’ve done quite well. I can afford the finer things in life; I’m grateful for that.
But what angel investing has really given me is freedom and control.
I never forgot how hard my mom and dad worked – all those late hours – just so my sister and I had clothes on our backs.
When I made it, I said, “You guys are now retired. You don’t have to worry about a thing.”
Giving my parents financial freedom – that’s what matters to me.
My wife and I launched our foundation… we’re funding education and nutrition programs in developing countries.
Angel investing made all of this possible. It’s been life-changing.
I want our members to experience this for themselves.
What a great way to end this summit.
Neil, thank you.
I’m ready to go to work!
And I have your Founder’s Membership Card here.
To claim your spot in the Angels & Entrepreneurs Network, click the button below.
It’ll take you to a brief subscription form.
Fill it out, and you’ll be rushed two Due Diligence Packages for two startups – each has billion-dollar potential.
And you can follow our simple instructions to invest in both of them. It’s extremely easy.
And remember, both startups have passed our 1,000X Formula, so they both have the potential to pay you a 1,000X return.
Click the button below and we’ll tell you more about them.
And that’s just the beginning.
Every month, you’ll receive the details on two new startups.
That means two more opportunities every month where you could collect a life-changing windfall.
In addition, many of the legends of angel investing and Silicon Valley will also be helping you build your deal flow.
I’m so excited to see what the future holds for you.
So let’s not waste another moment.
If you have any questions about the service and how it will work for you, I encourage you to contact our reliable customer service team at 866-310-1498 or 410-501-5876 (for international calls) and mention Priority Code: WAGNV829.
For Robert Herjavec and Neil Patel, I want to thank you for joining us.
I’m Mike Ward.
Have a great day.
Angels & Entrepreneurs Network