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To make angel investing mathematically viable, you need to spread your capital across at least 20 to 30 companies. Writing two big checks into your friends' startups isn't investing—it's high-risk ga-mbling.
Angel investing is entirely governed by the power law distribution. You have to assume 7 out of 10 investments will go to zero, 2 will break even, and 1 massive home run must return your entire fund multiple times over.
Examines portfolio construction math, risk diversification, and expecting 50%+ write-offs while chasing 10x-100x outlier winners.