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Things I wish someone had told me before I started angel investing

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Re: Things I wish someone had told me before I started angel investing

#41

Post by dkarapetyan »

TheBlerch wrote: post #10

The author makes good points here. While it's true that YC and other venture investors invest in many companies to increase the chances of large returns on the best of their portfolio companies, there is another significant advantage to YC having a bunch of companies in each batch - the teams that are not doing so well are a source of talent for the teams that are doing well. At some point YC can and has encouraged t…

The YC network effect is the secret sauce. Most YC companies would not even be able to bootstrap if it wasn't for YC alums like AirBnB.

Re: Things I wish someone had told me before I started angel investing

#42

Post by the_cat_kittles »

polote wrote: post #5

Summary: beginners almost never invest well. And it is the same for stocks, many people think they will make money by investing in a specific company because their logic says it is good idea. Investment is a job, and to win you need experience

and, must like gambling, the winnings are very skewed towards the top small percentile. so, even if you know more than 90% of participants, you will probably get owned.

Re: Things I wish someone had told me before I started angel investing

#43

Post by lisper »

jcousins wrote: post #37
lisper wrote: post #9

Earlier quoted context omitted.

Looking at what other people did and how that turned out is completely useless because the things that matter are the day-to-day details which you can only get by immersing yourself in the process full-time for a long time. So sharing that data would be worse than useless. At best it would serve to satisfy some prurient interests, and at worst it would cause someone to act on what cannot be anything other than hopele…

With hindsight would you take the same path with your career and funds? I find myself at this crossroad right now, both financially and professionally, so found your article useful - thank you.

If you're asking me this question because you hope my answer will inform your decision that's the wrong reason to ask. This is an intensely personal choice, and what you want out of life is very unlikely to be the same as what I do (that's what makes trade possible!) I'm glad I did it despite the fact that it cost me a lot of money because I know that if I hadn't tried I would have regretted it more than I regret the lost money. But that's just me.

Re: Things I wish someone had told me before I started angel investing

#45

Post by gizmo »

lisper wrote: post #40
trevyn wrote: post #30

Earlier quoted context omitted.

Something specific, or just unethical behavior in general?

Not "in general", but there is a long list of unethical behaviors that, sadly, can contribute to success. Selling snake oil. Abusing monopolies. Flat-out lying. However, it's not good to go to the other extreme. I've seen companies fail because the CEO bent over too far backwards to be ethical and as a result let people walk all over him. One of the qualities that seems to be required in a successful founder is a wil…

It's not _required_ to be unethical, it's just really tempting when you see others get rewarded for their unethical behavior. "When circumstances demand it" is of course the excuse of all unethical people throughout history. Total weak sauce.

Re: Things I wish someone had told me before I started angel investing

#47

Post by david927 »

> There is a small cadre of people who actually have what it takes to successfully build an NBT, and experienced investors are pretty good at recognizing them. Because of this, they don't have trouble raising money.

That's a pretty specious statement. I don't know how he came up with that; it certainly doesn't match with a lot of reality.

Re: Things I wish someone had told me before I started angel investing

#48

Post by lisper »

birken wrote: post #38

> But the cool kids don't beg. The cool kids — the ones who really know what they're doing and have the best chances of succeeding — decide who they allow to invest in their companies. The company I was an early employee of (that ended up being a "unicorn") was not a cool kid, and we certainly were begging people to invest both at the angel stage and (especially) the series A stage. And those people got a really real…

> we certainly were begging people to invest both at the angel stage and (especially) the series A stage.

Oh, sure, but angels typically don't lead series A.

And yes, finding needles in haystacks does happen. But for any founder who really has the knack, it only happens once :-)

Re: Things I wish someone had told me before I started angel investing

#49

Post by haburka »

david927 wrote: post #47

> There is a small cadre of people who actually have what it takes to successfully build an NBT, and experienced investors are pretty good at recognizing them. Because of this, they don't have trouble raising money. That's a pretty specious statement. I don't know how he came up with that; it certainly doesn't match with a lot of reality.

Just because you have a different experience than the writer doesn't mean that either experience is invalid.

Re: Things I wish someone had told me before I started angel investing

#50

Post by stevenj »

lisper wrote: post #9
brianwawok wrote: post #2

I was hoping for a fact like "And this is how I made 42 investments in my first 3 years. All are now bust, and I am out 1.4 million dollars" Obviously not fun to tell the world how much money you lost, but it would help to add color to the people behind the VCs, that developers love to see as the frenemy (terrible people out to screw you, but man their money is nice sometimes).

Looking at what other people did and how that turned out is completely useless because the things that matter are the day-to-day details which you can only get by immersing yourself in the process full-time for a long time. So sharing that data would be worse than useless. At best it would serve to satisfy some prurient interests, and at worst it would cause someone to act on what cannot be anything other than hopele…

Are most angel investors focused on finding the 1000x companies (i.e. the NBT) that VCs are?

I guess my question is what's a practical, good outcome for an angel investor when a company exits? Or what rate of return do the most successful angel investors have?

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