As a member of the Rock & Roll Hall of Fame band Talking Heads, Jerry Harrison was a pioneer in the use of digital recording to produce music. Now, Harrison champions new ideas as chairman of Red Crow, which is an equity crowdfunding portal for health-care and other startups.
Harrison didn’t start as a so-called angel investor, or someone who funds a company before venture capital comes in. He sat on the board of a few companies. Through that experience, he learned how companies worked through mergers, so-called near-death experiences and patent disputes, for example. After he learned how the process works, he began to invest in startups.
Harrison says his strategy for picking a startup is simple—personal relationships and a belief that a company’s idea has merit. He also suggests that you look for a startup that has accredited investors on board. This means that someone else was excited enough about the company that he/she put money into it, he says.
Harrison says angel investing isn’t for everyone. “You need to be able to afford to lose this money,” he says, adding that he took his share of lumps when he didn’t perform his due diligence. “As much as you believe in something, very seldom do people have the dart that hits the bull’s-eye.”
As such, Harrison’s portfolio is only 18 percent in angel investing, with 72 percent in equities and 10 percent in real estate.