Angels should have the same depth of understanding of the markets they invest in as the people who are working in the field, with fiduciary responsibilities to the people whose money they are investing. Angels have a broader set of reasons for investing, too: Maybe they want to help a friend out, or they care about a particular problem, or perhaps — as is sometimes the case — they are looking for an infinite pit to pour a not insignificant amount of money into without any chance of success at all.
Investing at the earliest stages of a company is a high-risk activity, even with perfect information and context. That means that investors are more likely to not make any returns than someone investing in a more established business.
I can’t tell you where to invest, and I can’t predict which startups will go on to be unicorns. But by avoiding the following pitfalls, you have a better chance to succeed.