I had the pleasure to interview fellow blogger and angel investor Gabe Young @ freebloghelp.com about offline investing practices and methods. Money-making secrets revealed inside.
1. You’re an offline investor… when did you start to get into this fieldand what comparison do you see with the online industries out there?
As my career success started climbing, so did the number of relationships I’ve built. Inevitably, investment opportunities find me. I don’t distinguish online vs. offline opportunities, I just look at potential ROI and payback periods. The problem with online opportunities is that there are way too many of them. Everyone thinks they can make a quick buck if they could only find someone else’s money to play with. It’s really not that easy.
2. What is an investor should look for before deciding to put his ownmoney into a project online and/or offline? What it should avoid?
First, ensure that you are in a financial position to actually take opportunities. I’m not a fan of mortgaging your future for small businesses. Your seed money should be excess that won’t impact your ability to live and save comfortably.
Secondly, I would make sure that the person you’re giving money to has skin in the game. If they are playing with only investor money, that’s not incentive enough for me to believe they are truly committed.
3. What top general industries do you find profitable fromyour experience (online and offline)?
No matter what you choose, make sure that the company can continuously reinvent itself. For example, one of my businesses sells the hottest trendy products that teenagers look for. They have an incredible disposable income and are willing to splurge on things on a whim. That said, we have to consistently evaluate our lineup to ensure that we have the actual products that they want.
4. What is your opinion on general vs. micro niches? Which one should we tap into? Why?
I would personally choose something that I have either a lot of experience in or have an interest in learning much more about. Don’t jump into something that you don’t know or care about because not only will you lose interest in the long run but you will also be constantly trying to catch up with others who actually love what they do.
From there, choose a sub-niche that market hasn’t already been cornered by someone else. So if you love cars, instead of having a general car enthusiast site, create a community surrounding the love of vintage Jaguars. Early on, it’s better to be big fish in small pond.
5. What tips do you have for investors who are starting out and have some moneyto invest in the offline & online world? What markets should they avoid, whatmarkets should the consider? What else.
A. Invest in what you love
B. Choose a niche or sub-niche that you can eventually own
C. Don’t partner with anyone who doesn’t have at least an equal financial investment
I know those are general rules of thumb that I’ve mentioned but I firmly believe any business can be successful if it has the right foundation.
About Codrut Turcanu
Really insightful answer on question #2. I’ve invested before on an idea that I truly believe in, but my partners were not that committed on the project, that’s why I really agree with Gabe’s answer.
I’ve been following Gabe’s blog for quite some time now, but I didn’t know that he does offline investments such as this. But what I can really say from what I’ve read from this interview is that he is really good at risk management – a characteristic that can only be built through experience.