BOOKS
Best Investment Books for Equity Crowdfunding
There are many books that will help you on your journey of startup investing. While some of the books are specific to equity crowdfunding or startup investing, others may not have those specific words in the title but can provide a lot of insight and lessons.
As I find and read books I believe will help people with investing in equity crowdfunding, I will write reviews and list them all here. Besides helping you to find the books that are most applicable to you, I will also provide brief summaries with the key takeaways to save you additional time.
Affiliate Disclosure: the book links on this page are affiliate links to Amazon.com. This means that - at no additional cost to you - I will receive a small commission if you purchase these books through the links. To read more about our involvement in the Amazon Associates program, visit our disclaimers page.
The Checklist Manifesto - How to Get Things Right
Author: Atul Gawande
Recommended for: anyone looking to improve their decision-making process, whether in investing, medicine, law, government, or anywhere else in life.
Key Takeaways:
- Checklists can improve outcomes, even for experts.
- Humans fail for two primary reasons - ignorance and ineptitude. Checklists help prevent the latter.
- The "Airline Captain" approach to VC investing (i.e. using objective criteria) resulted in far superior investment returns to other methods.
Equity Crowdfunding for Investors
A Guide to Risks, Returns, Regulations, Funding Portals, Due Diligence, and Deal Terms
Author: David M. Freedman and Matthew R. Nutting
Recommended for: all investors in equity crowdfunding, both new and experienced.
Key Takeaways:
- Don't allocate more than 5 to 10 percent of investable capital
- Don't invest money that you can't afford to lose for several years (due to illiquidity)
- Start small - make smaller investments for 1-2 years before increasing investment size
- Leverage the wisdom of the crowd for due diligence, and collaborate with other investors
Thinking in Bets - Making Smarter Decisions When You Don't Have All the Facts
Author: Annie Duke
Recommended for: everyone who deals with uncertainty (which is everyone - especially startup investors). Learn about human biases and how to make decisions when you don't have all the information.
Key Takeaways:
- All outcomes depend on two factors - luck and skill
- Recent events can cloud judgment and impact near-term decision making
- Ulysses contracts are one tool to protect your future self from emotions
- Mental time-travel is one tool to improve in-the-moment decision-making
Author: Jason Calacanis
Recommended for:
New Tech Startup and early-stage investors, including those investing through equity crowdfunding. This book provides a look into Jason Calacanis' (early investor in Uber and Thumbtack) screening and investment process.
Key Takeaways:
- Write deal memos (i.e. keep an investment decision log) for every investment you make.
- Invest and founders and teams, not products.
- "No gamble, no future." Another way of saying you can't win if you don't play, or you miss 100% of the shots you never take.
Categories: Angel investing, tech startup investing, screening process and strategy.
Principles: Life and Work
Author: Ray Dalio
Recommended for: anyone looking to reflect on or use the Principles that guided Ray Dalio - the founder of Bridgewater Associates, and one of the most famous investors and entrepreneurs of all-time.
Key Takeaways:
Categories: investment strategy, decision-making, business, portfolio management, risk.
Antifragile: Things That Gain from Disorder
Author: Nassim Nicholas Taleb
Recommended for:
Everyone who deals with uncertainty (which is everyone - especially startup investors). This book presents many amazing examples that will have you questioning how you approach life, including perspective-changing questions.
Key Takeaways:
-Barbell strategy for investing: have a portion of your investments in hyper-conservative assets, and the remainder of your investments in hyper-risky (and high potential reward) investments. Startups and equity crowdfunding fit the bill perfectly for high risk and high potential reward.
-The startup investment analogy to nature and evolution: nature does not pretend to know what the future will bring; organisms and life function based on random perturbations to DNA and diversity to live through randomness. Similarly, when investing in startups through equity crowdfunding - especially as it's so new and limited data is available - instead of trying to predict the future, use intelligent diversification, asset allocation, and build a portfolio that will thrive no matter what the future brings.
-The Turkey Problem in investing
Categories: asymmetric risk/reward, portfolio management, risk, startup investing, psychology.
In-depth review and additional take-aways (blog post coming soon)
The Richest Man in Babylon
Author: George S. Clason
Recommended for: anyone looking for a story that introduces the importance of making your money work for you. This book reads like a parable and is fun and engaging, especially for those who don't come from a finance background and want a great introduction to investing.
Key Takeaways: control expenditures, make your money multiply itself, protect your portfolio from
Categories: basic investing principles, compound interest.
In-depth review (blog post coming soon)
The Intelligent Asset Allocator
Author: William Bernstein
Recommended for: anyone looking to be introduced to the concept of basic asset allocation. Includes easy-to-understand examples for anyone, even from non-finance backgrounds.
Key Takeaways:
Categories: asset allocation, diversification, correlation, portfolio management, risk reduction.
In-depth review (blog post coming soon)
#BreakIntoVC
Author: Bradley Miles
Recommended for:
Those investors looking to gain insight into venture capital (VC), various valuation methods, and again a broader perspective on VC as a profession.
Key Takeaways:
Categories: Venture Capital investing, early-stage valuation methods.
In-depth review (blog post coming soon)
Investing in the Next Big Thing
Author: Joseph Hogue, CFA
Recommended for:
Those looking for practical advice on equity crowdfund investing from someone who has been around and advised Angel Investors and VC firms for many years.
Key Takeaways:
Categories: equity crowdfunding, Angel Investing, valuation methods.
In-depth review (blog post coming soon)
Equity Crowdfunding: Explained
Author: Salvador Briggman
Recommended for:
A high-level overview of equity crowdfunding, primarily with advice for startups that are looking to raise funds, but with some advice for investors, too.
Key Takeaways:
Categories: equity crowdfunding (primarily for the companies raising funds, not investors).
In-depth review (blog post coming soon)
Equity Crowdfunding: The Complete Guide for Startups and Growing Companies
Author: Nathan Rose
Recommended for:
Those looking to gain perspective of what the startups themselves look at when putting together a campaign. Intended more for the companies raising the funds than for investors. Examples from outside the United States.
Key Takeaways:
Categories: equity crowdfunding (primarily for the companies raising funds, not investors).
In-depth review (blog post coming soon)