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Early Stage Investing- Sourcing

Week 2: Sourcing

When thinking of sourcing my mind goes immediately to finding product. Being someone in a product-based field it is only natural. What peaked my interest was an idea that sourcing could also be just information. What Amis/Stevenson described were people who found their community and then used that network to find investments. It definitely makes sense how Amis/Stevenson highlight the importance of staying narrow and deep in your preferred industry (keeping only to 1 industry). As someone who has not participated in investing, I could see how newcomers would be picking from too big of a pool because they are unsure of the typical procedure and what to look for.

Like in any business, your network is everything. Creating and maintaining relationships with bankers, attorneys, and industry members is crucial for understanding your market and finding the best deals. As someone who is not in the investment field already, I find this idea daunting to break through into an industry. How does one insert themselves into a field and gain trust? I feel like without trust and inside knowledge the industry will not be very welcoming. How does one choose an industry to focus on?

As someone who is only 25, I feel like this book is geared toward the experienced. With only a couple years of my career under my belt, I cannot say I am an industry guru. A couple of the ways to source according to Amis/Stevenson is to write a book, teach an entrepreneurship course, or give speeches. But for someone of my age this seems impossible. This book was written in 2001 and therefore social media was not where it is today. On a more modern level I think that creating a following on Instagram or YouTube, which is more attainable for any age would also give you credibility to be able to do some of the activities outlined in the book. Also, how was social media changed angel investing? Businesses are able to use platforms such as Go Fund Me in order to get investment from everyday people rather than seeking investors.

Some sourcing methods seem like an old way to play and I do wonder how sourcing has evolved with technology. As someone who is not familiar to the sourcing world, the initial information needed to become an Angel seems daunting.

References: Amis, David, and Howard H. Stevenson. Winning Angels: The 7 Fundamentals of Early-Stage Investing. Financial Times Prentice Hall, 2001.

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