So you want to be an angel investor. If you are a regular person with no edge and no connections, I don’t think angel investing is worth the risk.
After 21 years of doing some angel investing, I believe you are much better off investing in an angel fund rather than investing in individual angel investments. Just say no to angel investing!
Let me share with you an angel investing example I had in a gin company back in 2010 and the outcome. To clarify, angel investing is the early stage of venture capital. However, the definition of angel investing has stretched from pre-see investing to seed investing to even Series A round investing.
Angel Investing Is Difficult
After 10 years, my $60,000 investment in a private gin company finally paid dividends.
Initially, given the company was sold for about $49M after expenses and I had invested in the company at a $10M post money valuation, I was thinking I had made a ~3X return ($180,000). Since over time shareholders get diluted with subsequent funding rounds, I thought that was a reasonable assumption.
Well it turns out I didn’t come close. Instead, here’s what I got:
Gross Proceeds: $98,425.88
Federal Withholdings: $0
State Withholdings: $6,523.82
Net Proceeds: $91,902.07
What the hell!? After almost 10 years, with $98,425.88 in gross proceeds, I only made a 64% return on my money (1.64X). Further, I had ZERO liquidity and lost hope for years that I’d ever get my $60,000 back.
Doing the math, I only made a 5.1% IRR, barely better than my guaranteed 4.1% 7-year CD that just expired.
So where did all the money go since the company was sold for 5X what I bought in for? Based on an internal document I received, we had to pay a lot of banker, lawyer, escrow, accounting, and general administration fees.
We also had to pay severance packages to all the employees (rightfully so) who were made redundant when the parent company took over. But there must be something else I’m missing, which I’ll investigate further.
Got Away With A Close One
Despite the missing money, I consider myself LUCKY to get any money back because most startups fail miserably. Before the buyer announced the acquisition, I had already written off the $60,000 because shareholders had never gotten a dividend and the growth target dates kept on getting pushed out.
My concern was the company would turn into one of those zombie companies with just enough growth to maintain EBITDA break even, but never enough growth to become an attractive acquisition target.
When the purchase price was announced, my write-off expectation transformed into greed. And now with the payout, my greed has turned into selfish disappointment.
Why You Should Not Angel Invest
Now that the stock market has gone up every year since 2009 (except for in 2018 and 2022), everybody thinks they’re investing geniuses. I’ve got so many people asking me whether they should invest in some random, moat-less private business. You just can’t lose if you put money to work, especially if you’re under the age of 35!
This is exactly what I thought in 2007 when I invested $60,000 in the gin company and bought a $715,000 condo in Lake Tahoe. Then the world came to an end.
Here are the reasons why you shouldn’t angel invest:
1) You have ZERO edge.
The other day I had sashimi and sake with a Sequoia Capital partner. Sequoia Capital is one of the best VC companies in the industry. It has made billions backing Apple, Google, Oracle, Paypal, YouTube, Yahoo!, and Whatsapp.
The partner said Sequoia shoots for a one win, seven loss hit rate. In other words, to follow Sequoia’s ratio you’ve first got to be willing to make eight bets of similar size. Further, you’ve absolutely got to be willing to lose money on 87.5% of your investments and hope that one deal is at least a 10 bagger!
The best VC firms get all the first looks. They have some of the brightest people spending 50+ hours a week reviewing company after company. Oftentimes they see information about competitor companies that enables them to evaluate who will likely come out ahead.
They also talk to their fellow VC industry colleagues about what other companies and other VCs are doing. In comparison, you and I get no looks. Instead, we only get the companies that have been rejected by the VCs. Talk about an unfair advantage.
2) Your money is more sacred than other people’s money.
Being a VC is the best job ever because you get to make a $250,000 – $400,000 salary and make investments using OTHER PEOPLE’s money! If your investments turn sour, who cares? You still get paid your base salary for the 8-10 year life of the fund. If your investments do well, you get to earn even more money off other people’s money in the form of carry.
As an angel investor, you’re putting your own money on the line. In order for me to follow Sequoia’s model, I would have to personally make an investment total of $480,000 at $60,000 each in eight unproven companies. Other VCs with worse returns have a 1:9 win:loss target. In other words, I’d have to make a $600,000 investment to try and make money.
Even if we’re allowed to invest only $25,000 per deal, most of us won’t be willing to risk $250,000 worth of capital in venture.
3) Your stake will be diluted away.
As a minority investor, you have no say in management decisions or funding rounds. If the company starts getting desperate for cash, they may offer sweetheart deals to future investors at your expense. One such sweatheart deal is called liquidation preferences.
For example, assume a venture capital company has a 2X liquidation preference after investing $1,000,000 for a 50% stake in the company. The founders own 30%, and you, the angel investor, owns 20% after investing $100,000. If the company is sold for $2,000,000, you might think you’d be getting $400,000 back.
In reality, you’d get $0 back because the VC gets paid 2X their initial $1,000,000 investment during the liquidity event. Meanwhile, the founders also get $0 back as well!
Just realize that whenever your private company raises a new round of funding, your stake will get diluted by 20% on average. See my post on career advice for startup employees.
4) You have zero liquidity.
Goodness forbid you need the money to cover an emergency during a typical 8-10 year holding period. So sorry! You will never get your money back unless there is a sale or IPO. And given ~90% of companies fail, and 9% of companies end up barely staying alive, you will likely never get your money back even if you waited 50 years.
At least with public investments in stocks and bonds, you can get your money back within three business days.
Now in 2023, even accessing cash may pose problems after the bank runs Silicon Valley Bank, Signature Bank, Credit Suisse, and likely many others. Make sure you have enough big banking relationships to keep you safe and liquid.
it’s looking more and more like early stage start ups will have a very difficult time navigating the future going forward. Funding will be much slower and the startup terms will be tougher.
5) The returns aren’t even that great!
For all the sexy talk about angel and venture capital investing, for the typical VC and angel investor, the return is truly dismal. We’re talking median 0%-2% returns a year from 2001 until now. The mean (arithmetic average), however, is more like 8% during the same time period due to the massive success of the top VC firms.
Check out some great charts that demonstrate my point.
The top 20 firms (out of approximately 1,000 total VC firms) generate approximately 95% of the industry’s returns according to Betterment, the leading digital wealth advisor today. Further, nobody can participate because the funds are way oversubscribed.
Here’s an old chart that shows how VC returns were awesome in the 1990s, and have since fallen to ~0% in the 2000s due to too much money chasing too few deals. The lines continue to hover around the 0% return level until 2017.
Here’s another chart showing that 64.8% of US Ventures return just 0 – 1X your money over a 10 year period. In other words, best case scenario for 64.8% of the VC funds, you only get your money back (1X return)!
Micro-VC Performance
Here’s another chart that shows the top quartile and bottom quartile performance of micro-VCs, funds that are $50 million and less. Notice the wide range of performance, with the median performance coming in closer to 10%.
Not bad, but nothing special compared to the S&P 500 return. With the global pandemic hitting in 2020, many more private companies will go bust due to a lack of cash flow and capital.
If you look at even “sure bets” like Uber, Lyft, and Airbnb, investing in these companies haven’t turned out so well if you did after 2015.
Airbnb is the big shocker, when they had to raise money from Silver Lake Partners in 2020 at a $18 billion valuation after being valued over $50 billion at the end of 2019. Who would have thought there would be a global pandemic and months of lockdowns that would crush the travel and hospitality industry?
As investors, we just never know. Timing is so important.
Three Saving Graces For Angel Investing
Although my gross proceeds from my $60,000 investment is only $98,425.88, apparently I don’t have to pay the full federal taxes on my $38,425.88 gain under the Qualified Small Business Stock (QSBS) Act.
Beginning in 2015, for the first time since its enactment in 1993, Sec. 1202 allows noncorporate taxpayers to exclude from federal income tax 100% of the gain on the sale of certain qualified small business stock (QSBS), limited to the greater of $10 million or 10 times the adjusted basis of the investment.
To qualify for the exclusion, five criteria generally must be met:
1. The stock must have been directly acquired via an original issuance from a U.S. C corporation (Sec. 1202(c)(1))
2. Both before and immediately after stock issuance, the C corporation’s tax basis in gross assets did not exceed $50 million (Sec. 1202(d)(1));
3. The C corporation and shareholders must consent to supply documentation regarding QSBS (Sec. 1202(d)(1)(C));
4. The C corporation conducts certain qualified active trades or businesses (Sec. 1202(e)); and
5. The stock must have been held for more than five years (Sec. 1202(b)(2)).
Well what do you know? My investment in the gin company back in 2007 meets all these qualifications. All I have to do is pay California state tax, which I’ve done. But of course, there’s a catch. My investment needed to have been made after 9/28/2010. So in reality, I only get about a 43% tax savings (see chart), which is better than a dumbbell on a toe.
The other saving grace of this deal is a performance bonus. If the gin company achieves several sales targets over the next several years, investors get to earn a 50% bonus on our returns equivalent. For me, that equates to an additional $49,213 of upside. I won’t count on it, but it’s nice to know it’s there.
The final saving grace is that locking up $60,000 saved me from potentially wasting my hard earned money on something wasteful like a fancy car or an even more expensive vacation property. I had a lot more desires as a 29 year old than I do now.
Despite these benefits, I still don’t think anybody should angel invest. If you absolutely must, you can take 5% – 10% of your investable capital and make some unwise investments to help friends and family. Just expect your money never to return.
Related: Recommended Net Worth Allocation By Age Or Work Experience
Brushes With Angels Of Death
As I reflect upon my investment, I was foolish to invest $60,000 in a 28-year-old first-time founder with no experience in the spirits business. But he was my friend and I admired his drive and hustle.
He told a great story: “We’ll do to gin what Skyy did to vodka and blow the category up!” A more risk appropriate amount for me at the time would have been $25,000.
Now my friend, who is 38, is worth $5,000,000 – $7,000,000 before taxes and is taking a well-deserved break before starting a new venture. If you are a founder, and people are throwing money at you, take it!
Just make sure there are no nasty covenants in place. It’s so fun to get rich off of other people’s money. No wonder I like real estate.
To conclude, here are a couple more venture investments I was so close to making, but didn’t, thank goodness.
Triggit
Circa 2011, I could have invested $100,000 in a company called Triggit, a Facebook ad retargeting company that was growing like crazy. I played poker with the founder all the time and at one point, my investment would have been worth ~$1,000,000. I was kicking myself in 2014 for not taking the risk in a business I knew pretty well as an online media business owner.
Then out of the blue in 2015, Triggit got taken UNDER by Gravity4. Employees got zilch, and I’m not even sure the founders got anything. Facebook decided to change the rules and made third party ad exchange providers irrelevant. Then the founder of Gravity4 ended up getting kicked out due to domestic abuse.
Bento Now
Then there was a company called Bento Now, an Asian food delivery company I was considering investing $25,000, also in 2015. I wanted a deal in exchange for helping promote their product, but they said demand was too great for them to negotiate.
It was run by an ex-blogger I knew who ended up raising ~$1.5M from several well known angels. Then one day in the fall of 2016, I was listening to the Gimlet Media Startup podcast (which eventually sold for big bucks to Spotify) and heard they had spent $70,000 more than they realized in one month! How do you do that? A few months later, the company shut down.
Given I didn’t lose $125,000, does that mean I gained $125,000 and can therefore splurge on whatever I want?! Please say yes! Venture investing is seriously risky business. Don’t risk anything you can’t afford to lose. With my gross “windfall” of $98,425.88, I plan to do some more landscaping and save the rest for my Hawaiian dream house fund.
Empower Personal Capital
I invested about $10,000 in Empower Personal Capital, my favorite free wealth management tool and popular digital robo advisor in 2015. At the time, the valuation was for $500 million. The firm sold for $825 million plus $175 million in incentives to Empower Retirement in 2H2020.
This investment really wasn’t an angel investment because I invested during the Series C round. I ended up getting $49,500 back. Not bad!
If you want to invest in VC, try and invest with a top tier VC fund instead. Funds like Andreesen Horowitz, Sequoia, Kleiner Perkins (new vintages), Benchmark, and so forth. The difficultly will be getting an allocation. These guys have much better track records and much better access to capital.
Angel Investing Alternative
I’d much rather invest in real estate, a tangible asset that provides shelter and generates income. Real estate is stickier on the way down and is often a defensive asset class during times of uncertainty.
Fundrise is the leading real estate crowdfunding platform today that is free to sign up and explore.
Another good real estate crowdfunding platform to check out is CrowdStreet. CrowdStreet primarily focuses on real estate investment opportunities in 18-hour cities, those cities with lower valuations and faster growth due to demographic shifts.
Thanks to technology, remote work from home, and high cost of living on the coasts, I expect there to be a multi-decade demographic shift towards the heartland of America.
I have invested $810,000 in commercial real estate across the country and plan to continue investing more over time. I’m much more comfortable investing in real estate than angel investing.
Wealth Management Recommendation
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I’ve been using Personal Capital since 2012 and have seen my net worth skyrocket during this time thanks to better money management.
Updated for 2022 and beyond. Angel investing is still popular, but I would limit your angel investments to no more than 10% of your investable assets. Instead, I would invest in a private fund (VC, VD, PE, etc) instead. These funds have much greater access than you or I.
I’ve invested in two early stage venture funds here in Australia. The incentives are that gains are tax free and you get a 10% tax credit (i.e. cash back from the government) for your investment. I’ve been invested in the first fund for a couple of years – I wasn’t an initial investor but am up about 60% on my net AUD85k investment. This is based on a couple of exits and the interim valuations on the other investments. So, it could go worse from here, but it looks like it will end up making money even in the worst case. It was an AUD100k investment formally but they are using the proceeds of the exit for follow on investments in the more successful companies.
So, I invested in a second fund. AUD 250k, 25% called so far. So, I was only investing about AUD 10k in each of the companies in the first fund and will now be more like AUD 25k. These seem appropriate risks for me (family net worth near AUD 5 million).
If everyone had your beliefs, or mine we wouldn’t have a functioning economy.
Thank f*** for Sequoia Capital and other businesses.
You’re not wrong on poor investment, high risk, but just think of the privilege it speaks to that you had 60k in your 20’s to invest as well as buying a house
Curious, why do you discuss privilege when this is a discussion on angel investing? Is there some type of privilege you have that is making you feel guilty?
I think we’re all quite privileged and we have to make the most of it. See: https://www.financialsamurai.com/your-wealth-is-mostly-due-to-luck-be-thankful/
I agree with Sam. Angel investing is suitable for institutional money not for individual, as your money won’t be diversified enough to adjust with the risks. Its better to invest in a fund rather into one business directly thats the way you can still help the economy grow.
Sorry, but I have to disagree about “never invest in startups.” That’s foolish advice.
Of course, if you don’t know what you are doing, you will lose your money. And it seems the majority of commentators here really had no notion of how find, analyze and then invest in an early stage company.
I could just have easily written the same thing about stocks or real estate — plenty of people have lost money in all sorts of investments. But just because one person is foolish doesn’t mean everyone has to be as well.
First, you need good deal flow. If you think you are going to find a good company at your local incubator, or your nephew who started a cool tech company, then you get all the problems you deserve. Finding a stream of good companies is a skill itself, and no, the best deals do not get pasted on Angelist or Gust, or come from your local university. You have to be plugged into a solid, trusted network of actual angel investors.
Second, you need to know how to analyze a company. Honestly, I’ve known people who spend more time researching their next car then they do a $100K investment in a company! And it’s NOT about the product! If you invest because you think the product is great, you will probably lose all your money. Mostly, it comes down to the management team — if the founder or entrepreneur has a history of starting and selling companies, and has strong ties to the industry and knows how to sell, it’s probably a good company. it doesn’t matter if it’s ketchup or an app, or a biotech company — it’s about the business, not the product.
Third, you have to know how to negotiate an investment. If you think that you know everything about angel investing because you’ve watched Shark Tank, you are an idiot. You have to put your own valuation on a company (which means you have to analyze it), and then negotiate how much equity you get.
Fourth, once your investment is made, if you think you just sit around and wait until the company gets sold, again, you should be doing something else. As an investor, you are a partner. That means you need to communicate with management on a monthly basis at least, and you need to do what you can to open doors, find distributors, provide management expertise, or whatever.
It’s not about picking winners, it’s about making winners. I’ve operated an angel investment group for 9 years, and most of our angel investors have made money. Tons of it. Biotech companies may take longer, but you are looking at 30X returns. However, we routinely see investors getting 5X to 10X on their money within five years. You just have to know how to do it, and get access to good deal flow.
I made a small family investment in a start up and later made an even smaller contribution in another funding round. Have tied up $7000 for nearly eleven years. The tech marketing company is finally making a small profit but there are few rumblings of a buy out or any other way I’d ever get my investment back a profit. I’m glad I didn’t do more although the eventual payoff might be lucrative. I’m not an accredited investor so I certainly couldn’t afford to go higher than that.
Around that same time, I started to make some great stock investments that have averaged above a tripling of the initial value. One stock is approaching 5x value while the worst moneys is still up a few percentage points each year on average. Since the company valuation in further funding rounds went much higher, I still have hopes of a large payoff someday. But as each year goes on with seemingly little headway taking place, I realize it’s becoming more and more like a gamble than a real investment.
Good you didn’t invest too much!
The stock market has easily outperformed the vast majority of private investments since 2009.
I’m thankful I got my $70,000+ back after 10 years.
I’ve made a couple other private equity investments, but in funds instead.
I appreciate how you have had your brushes of trial and error in investing money. I even appreciate more that you share these events in your life to help others to handle investments frugally, my cousin would love to read about this. If I were to make a venture capital investment firm, I will need well-tenured individuals like you.
It looks like better to stay with an IRA account where you can actually manage your money and diversified as much as possible using the global market. Even with indexes alone following the charts going up and coming down i could make more money during the year. thank you.
I previously went through an accelerator program called Y Combinator that has invested in companies that have gone on to be very successful such as Airbnb, Dropbox, Instacart, the list goes on.
For those who are unfamiliar, an accelerator program can be described as a “boot camp” for startups and, as the name describes, it “accelerates” the trajectory of a startup’s growth by providing some initial funding (Y Combinator invested $120k in my company when I went through the program, now the investment amount has increased to $150k), as well as expertise, mentorship and other resources to help entrepreneurs be successful.
My angel investments have been made exclusively in Y Combinator companies. The quality of companies that get accepted into Y Combinator (1%-2% acceptance rate) and go through the program is much higher than the average startup, and the failure rate is much, much lower. Like the returns in VC, it is still very much a winners driven business, but instead of a 1 win and 7 losses at Sequoia, with Y Combinator companies it is more like 1 win, 6 companies that end up doing OK, and 1 loss.
Also, as a Y Combinator alumni, I get to have a first look (even before VCs) of all new companies that graduate from the accelerator program at an event called “Alumni Demo Day” (a sort of dress rehearsal before the real “Demo Day” in which the graduating class of Y Combinator entrepreneurs will pitch to a huge audience of VCs, Angels, and other investors)
The issues of zero liquidity and dilution remain – although most investments made in Y Combinator companies during or shortly after Demo Day are done on instruments that have pro rata rights built in, so as an Angel investor, if an investment I make ends up being a winner, I have the right – but not the obligation – to invest more to maintain my stake.
Would I do better if I reallocate the money I put towards Angel investments into a broadly diversified index fund? Yes, most likely, but the Angel investments are only a small part of my overall portfolio, and the index fund is never going to have the chance (albeit very small) to turn a $50,000 investment into $50 million. You never know… if lightning strikes and I get in early into a company that ends up becoming “the next Airbnb,” that one investment will more than justify the 75% of $50,000 investments that end up doing OK (e.g. not Unicorn status) or 12.5% that fail outright. Plus, there are other benefits such as being the first to learn about new / innovative businesses and interacting with smart people.
If I was an alum and had access like you, I’d invest too no doubt.
But for most people reading this post, we don’t have the same access. So it’s best not to gamble.
What’s going on with your start up? And how many years do you foresee it taking to reach a positive liquidity event? Thanks
This article actually just came across my feed as I’m considering making an angel investment in a medical tech company. At least I have some familiarity with what they’re building. It’s a unique situation where I’ve been given an opportunity to invest in a seed round alongside legitimate VC’s. There’s something comforting about that, and not an opportunity I’ll get often I’m sure.
I’ve invested in a few companies with capital I could “lose” however, I wish I had done so with smaller amounts so I could spread out the risk. I thought I’d make a couple big bets on a few, but thinking about it again, it may have been better to make 8-10 smaller bets.
Thanks for sharing your experience. No success or failure stories yet, but I’m sure I’ll have some to tell over the next 3-5 years.
It is always interesting to see what investments highly educated people don’t feel good making. Thanks for sharing this insight. The allure is so strong with these companies. The only way I got “close” to this was investing under $1000 in a friend’s company. It seemed very strong and that the market wanted it, but the friend had family and health issues that destroyed the company.
A levelheaded and insightful analysis of why angel investing is a bad idea for Average Joe (or Average Joan). There’s generally so much that ordinary folks don’t understand about the company, the industry, or both–it’s unwise (and very risky!) to invest money in startups; you only hear about the winners like Google and Facebook but not the hundreds or thousands of companies that don’t take off and end up folding.
Thanks for the detailed and supremely helpful article, Sam!
Thanks for sharing your advice, Sam! Angel investor discussions are still too rare on personal-finance sites– I’m glad to see this one make Rockstar Finance.
I joined Hawaii Angels in 2008, and I just made my 11th investment. Each was the default $25K and I’ve added my pro-rata in most follow-on rounds. My first three investments received 100% state tax credits, although that law shut down in 2010.
No exits yet. Four startups are no longer with us. Two are too close to call. One was two months ago. Three are doing well and should exit within the next five years. (They’re all negotiating offers or at least “building value”.) The 11th investment is the accelerator Blue Startups.
Angel investors do have an edge in their local community. VCs might get “all the first looks”, but angel investments are a waste of their time. Pitches under $2M should be ignored by VCs because it’s not worth their due-diligence expenses. Local startups appreciate the social proof of local angel investors, and founders actively network for their advice & support. If you’re running a smaller accelerator then your applicants are almost universally ignored by VCs… until the founders pitch at demo day.
I started angel investing in my late 40s (near the hypothetical peak of my cognition) to immunize myself against temptation in my 70s (when I’ll probably be past my cognitive peak). I’ve thoroughly deglamorized it– it’s hard work– but it’s made me better at business and investing. I’ve met dozens of incredible people (just like FinCons and Mustachian meetups) and I’ve made a number of new local friends. I very much enjoy volunteering at Blue Startups. Personally, I’d rather help founders create jobs than donate my money to charities.
I’ve stopped making new angel investments (and this time I really mean it). I plan to wind down this part of our asset allocation instead of using the (potential) exits to fund new startups. We’ll see whether I feel differently by 2020.
Just curious, what’s your data source for the VC return charts? I was also wondering if you think the same return patterns hold for angels, as I was under the impression that the average angel returns are pretty good.
I personally don’t plan on investing in any start-ups, because I don’t have the time to spend evaluating the businesses nor do I have the capital to invest in enough different businesses to limit my risk. However, it’s an interesting topic and perhaps sometime down the road I’ll give it further consideration.
Great article. I’m sending it to my friends who do this type of investing.
To your points I’d add one more–“follow on investments.” Often there’s pressure to add money in subsequent rounds to prevent failure and/or dilution. So you up your bets in the losers and tilt the odds even more against.
I’m not sure how angel investing ever became glamorous but to me there’s nothing sexy about losing money.
It’s a good lifestyle move (but probably not investment) for people who’ve had major cash outs, and who want to employ some of their money and expertise to mentor others.
For everyone else, it’s a likely loser, and one that can dog you for decades, as in your opening example.
Another problem with angel investing is that the start up company often comes back to you to ask for more money beyond the initial investment or face dilution assuming the company can even raise more money. Not attractive options.
Sam- on your gin investment, from the numbers you’ve shared with us, there is a lot of unaccounted for money as you said. What kind of covenants could there be that the shareholders didn’t know about?
At least you got your initial investment back vs a total write off which often happens in angel investing.
Yeah, I’ve been concerned about that ever since Sam wrote about it a year or so ago, but some of the crowdfunding portals provide anti-dilution protection contracts so you can argue that is in fact better than direct angel investing where it’s caveat emptor.
I don’t think we’re at that point yet were follow-ons have happened for the CF and A+, so it will be interesting to see how that plays out. Most A+’s that have commented that they plan to do only one raise from the general public, then go straight to VC thereafter (presumably for the rest of the Series until the acquisition or IPO exit). VC’s do not typically invest during early or seed rounds due to their gorilla-sized liquidity issues. BTW, the failure rate between early and middle rounds is essentially same but the magnitude of the payoff is orders higher with early. So there’s really not much point in doing middle unless you’re a VC (or a D fund).
Great article on VC investing. This blog is like business school, but for free.
I would say that some of those conclusions also apply to stocks from bigger companies. In the end, we don’t know what they are doing with our money. Others have an edge that individual investors don’t.
That’s why I prefer ETF or even a mutual fund.