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The Three Ds of Angel Investing

Paul Clark
Paul Clark
Last updated: June 4, 2024
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The Three Ds of Angel Investing

Angel investing is about three Ds:

  • Ducks
  • Dunbars
  • And Deca-corns


Angel investing has nothing to do with wildfowl, Sullivan Foundation awardees, or mythical creatures.

Angel investing is actually about three Ds:

  • Diversification
  • Diligence
  • Discipline


Investing in a single early-stage company is risky: it will probably fail. The evidence is clear though: investing in a diversified portfolio of early-stage companies can lead to attractive financial returns.

Here is evidence for angel investing as a whole.

Here is evidence from the VentureSouth membership.

And here is an interesting new study suggesting even more “shots on goal” are needed in the Silicon Valley venture capital moonshot world.


You could invest in every single early stage company you could find, every AngelList syndicate, every WeFunder campaign.

But angel investing takes diligence. Here is the evidence: even a modest amount of diligence is correlated with stronger investment returns.


The last D is what defines the most successful investors. Discipline.

Have a process and stick to it; have investment criteria, and stick to them; set your allocation to angel investing, and make it; make your investments, and see them through; figure out how you can help, and do it.

And yet:

  • Investors put $5,000 in every investment to be diversified but then put $50,000 into the one company they like the most.
  • Investors aim at 10 investments, but get distracted after number five.
  • Investors only invest at sub-$3 million valuations, but then invest in one with a $20 million valuation and a lower target return just because it has more revenue.

These are investors that lose their discipline – and make it much easier to lose money overall.

How does VentureSouth help?

VentureSouth can certainly help with diversification: our members invested in 30 investments in 2019.

And we’re pretty diligent: companies moving through the VentureSouth pipeline go through a rigorous and consistent diligence process.

Discipline? That one we leave to everyone individually. All VentureSouth members make their own investment decisions. Some are more disciplined than others!