Santa Clara University's Silicon Valley Executive Center is offering a five-day venture immersion workshop designed to help Angels, high net-worth individuals, and members of family offices architect their startup investment portfolios.

Angel investing continues to expand globally and remains the primary initial source of capital for startups. In 2018 in the United States alone, more than 330,000 Angels invested $23B in 66,000 startups. But how much of this is smart investing?

Modern Investment Theory suggests that achieving extraordinary returns while cushioning downside risk requires a disciplined portfolio approach. Rather than take a strategic view, many high net-worth individuals and family offices dabble in random, early-stage startup investments, which is an approach they never would take with traditional asset classes like equities and real estate. They often invest without defining investment theses, performing risk and return analyses, or taking a rigorous approach in determining valuation and deal terms.

In contrast, in seeking supernormal returns, professional Angels treat early-stage investing as building a portfolio. Building such a portfolio has its own best practices in company selection, diligence, financial analysis, and overall risk analysis.

The primary returns to Angel and VC portfolios come from only 10% of their deals. As a result, startup investing is a game of finding outliers and managing diverse sources of risk—deal term risks, valuation and capital risks, market risks, management risks, technology risks, and exit risks—across a company’s journey from formation through M&A or IPO.