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Fool's Gold?: The Truth Behind Angel Investing in America and over one million other books are available for Amazon Kindle. Learn more

Fool's Gold?: The Truth Behind Angel Investing in America (Financial Management Association Survey and Synthesis Series) 1st Edition

9 customer reviews
ISBN-13: 978-0195331080
ISBN-10: 0195331087
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Editorial Reviews


"The story of angel investing is long on opinion and short on data; this book does the opposite and makes a valuable contribution to this emerging financing niche with a practical and skeptical data centric approach to understanding what is going on in the world of angels." --Ian Sobieski, Managing Director, Band of Angels

"What do we think we are doing? Scott Shane shows that we're not consistently targeting the best investments, or the best terms; that we're not as professional as venture capitalists--and our results reflect this lack of focus. Become a professional angel investor; start here to first learn the mistakes and omissions that angel investing is fraught with."--Frank Peters, Chairman, Board of Governors, Tech Coast Angels, Host,

"Venture capitalists, policy makers and entrepreneurs should read this book and take note. Scott Shane has uncovered the mythology surrounding angel investing by examining the facts and drawing crystal clear conclusions. I would thoroughly recommend this book to anyone, especially VCs, aiming to understand how they should engage with business angels in the future"--Simon Barnes, Venture Capitalist with Tate and Lyle Ventures

"Finally, the truth! Follow the facts in Fool's Gold? It is the entrepreneurs' guide to angel investing."--Barry Moltz, angel investor, entrepreneur, and author of Bounce

"There is so much confusion today in the market place regarding start-up and angel financing. Having a definitive, factual based book about the subject is not only refreshing but a 'must have' if you are contemplating using this form of financing for your new company. Understanding how to finance your new company is such an important decision, learn as much as you can about that process by owning this book."--Randall Bambrough, Silicon Valley CFO and Lecturer at Santa Clara University

About the Author

An angel investor with the North Coast Angel Fund, and a professor of entrepreneurship at Case Western Reserve University, Scott A. Shane is the author of Illusions of Entrepreneurship, among many other books and articles.


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Product Details

  • Series: Financial Management Association Survey and Synthesis Series
  • Hardcover: 288 pages
  • Publisher: Oxford University Press; 1 edition (November 12, 2008)
  • Language: English
  • ISBN-10: 0195331087
  • ISBN-13: 978-0195331080
  • Product Dimensions: 9.3 x 0.7 x 6.1 inches
  • Shipping Weight: 1.2 pounds (View shipping rates and policies)
  • Average Customer Review: 3.9 out of 5 stars  See all reviews (9 customer reviews)
  • Amazon Best Sellers Rank: #280,237 in Books (See Top 100 in Books)

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Customer Reviews

Most Helpful Customer Reviews

9 of 9 people found the following review helpful By Amazon Customer on November 30, 2008
Format: Hardcover
If you've ever thought about seeking angel investment capital for your business, there's a good chance you will start the process with some misconceptions. Same goes if you are thinking of becoming an angel to invest in other businesses.

For instance, you may have had the notion that individual angels are rich -- or at least very well off -- and invest a lot of money in each business. Not necessarily so, says this book.

I recommend you spend some quality time with this book if you are interested in seeking angel funding. It could save you some mis-starts and get you pointed in the right direction faster.

This is a book stuffed full of facts and study data. If you wanted to know, say, whether your retail business is a good candidate for angel investing, the book will tell you (answer: yes, 25% of angel investments are made in retail businesses).

You might wonder how a book of facts and data could help you as an entrepreneur. That's easy. From information gleaned you can get a much better idea of such things as:

- why angels invest (it may be as much about having a hobby as making money)

- how angels decide on which businesses to invest in (with less investigation than you'd expect)

- how angel investors come up with valuations and what kind of ownership interest they will expect (most don't do formal valuations and they demand smaller ownership stakes than you might expect)

- where and how to find angel investors (hint: look locally)

All of these things will help you understand how to appeal to angel investors.

The writing style is crisp and direct. Despite the many figures and statistics scattered throughout, it's relatively easy to read and comprehend.

You should get this book if you are serious about getting angel investment or if you are thinking of becoming an angel investor yourself.
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10 of 11 people found the following review helpful By Jonathan Eckhardt on October 28, 2008
Format: Hardcover
Scott Shane is one of the most widely published scholars on the topic of entrepreneurship. In Fool's Gold: The Truth Behind Angel Investing in America, Professor Shane turns his disciplined methodology and logic towards unmasking commonly held misconceptions about angel investing. His effort yields accessible yet robust inferences about a little understood business activity.

This book provides the reader with a rigorous review of the landscape of Angle investing, with an eye towards examining the feasibility of commonly held beliefs. The strength of the book lies in the analysis reported in Chapters 2 through 6. However, Chapters 7, 9 and 10 are important for those interested in considering becoming active angel investors.

Shane's book is not a how-to investment classic, as this book does not provide the reader with specific tools on how to become a better investor. However, this book is an imperative read for angel investors, public policy makers, and entrepreneurs. Why? Shane's efforts have yielded the best book for acquiring a rigorous review of the landscape of Angle investing. Legendary investor Ben Graham wrote that investors should study business history. This book fits this tradition, by providing the reader with an analytical report on the background and context of Angel investing in the United States.
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9 of 10 people found the following review helpful By Jeff Lippincott on October 24, 2008
Format: Hardcover
I liked this book very much. It's the second book written by this author I have read. And I cannot praise it enough. The topic: Angel investing and angel investors - the inside scoup. The book has 231 pages and 12 chapters. I urge you to examine the Search Inside material provided by Amazon so you can study the book's Table of Contents.

Each chapter has a "Key Facts to Remember" section just before an end-of-chapter "In Conclusion" section. I found the chapter titles to be very helpful in telling me what the book was about. But I also got lots of insight into the contents of the chapters by reading the key facts and conclusion sections. This book was really easy to read as a result.

If I had one gripe with the book I felt as though the author was arguing many of his points rather than simply stating them as facts. I don't think the book needed as much argumentative prose as it included. I agree with everything the author says about the nature and reality of angel investors and angel investing. But he could have been a little more succinct in his presentation of his points.

I've read a few books that talk a little about angel investors and investing. But there are only two I think are worth mentioning besides this one. The first is the original Rich Dad Poor Dad book. The "rich dad" refered to in that book was an angel investor. And many of the lessons Robert Kyosaki talks about in the Rich Dad books are a result of what he learned from that angel investor. Kyosaki says that angels have to be accredited investors. The instant book being reviewed says they don't. My understanding is angels only have to be accredited investors if you market your business as an investment to them. It's the act of marketing that forces the necessity of the angel to be accredited.
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1 of 1 people found the following review helpful By David M. Freedman on September 23, 2013
Format: Hardcover Verified Purchase
The title, and the cover teaser "The truth behind angel investing in American," create the expectation of exposing some scandalous deception or corruption. It's nothing like that. What it does is expose misperceptions created and perpetuated by the media (due to sloppy reporting, possibly to PR efforts by the VC industry, but not due to some nefarious conspiracy). The author, Scott Shane, calls them "gross misperceptions" in his Introduction, and some of them are gross while others are merely slight distortions.

For example, many articles and authoritative-seeming books create a false impression that angel investors tend to be wealthy (accredited investors). Not true. In fact, 79% of angel investments are made by unaccredited investors. Only about 23% of angel investors have a household income of more than $200,000, and about 32% have household income of less than $40,000 per year.

Contrary to a lot of media coverage of angel investing, only about 23 percent of business angel are retired, only about half of them graduated from college, and the typical (median) angel investment was only about $10,000 in 2004.

More debunking: Studies show that an angel's entrepreneurial experience "is not correlated with his financial returns" from angel investments. From the entrepreneur's point of view, "there is no evidence that getting an angel investment increases the chance of getting a venture capital investment" later.

The book is, in fact, a long series of debunks. It's written like an academic report, not a narrative with anecdotes or war stories, and not with any guidance for would-be investors in terms of how to allocate or conduct due diligence. Most of the data is from studies conducted before 2004, when the financial world was different.
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