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

So, status quo for tech companies is to not read on patents (avoid knowing infringement), grow as fast as they can no matter what patent laws they violate, accumulate their own patents where possible for use in self-defense, and build up lawyer money. One day, when the attacks come, the company will be ready for a solid defense where it claims it didn't know about the patents, they're void, or they're overpriced. This might also be leverage for a better deal during an acquisition.

The operating environment is unethical in its very nature with certain things such as patents, trademarks, copyright, lock-in w/ formats/protocols (eg walled gardens) and so on. So, those that can use them will get a financial advantage. Those that don't might get so much less of the market they get squashed or denied a fortune they could be doing a lot of good with. Lots of grey areas to think through in these sorts of things.

Smart people can come up with elaborate justifications for anything, if they take the time to "think it through". Arguments that "they could be doing a lot of good" is basically "the end justifies the means". That's the opposite of morality.

Maybe an executive is doing a lot of good and so it would be bad for society if he went to prison for a hit-and-run. Better cover up the crime so the good guy can keep doing the good things he so goodly does. All for the benefit of society, of course.

I really do question this. The "problem of induction"[1] comes into play when you start talking about pattern matching and learning from "experience". That is, there's no guarantee that the future will look like the past.

Before Zuckerberg was Zuckerberg, I wonder how many people would have said "Hey, I recognize in this kid the innate capacity to be an NBT"? Of course they got funded, but I believe most of it was after they already had demonstrable traction.

On that note, one of the things that makes fund-raising such a drag, is that so many angels (at least in this area) want to see "traction" before investing. Even though, typically, you would thing that angels are investing at such an early stage that nobody would really have traction yet. Maybe it's just that the angels here on the East Coast are more risk averse.

[1]: https://plato.stanford.edu/entries/induction-problem/

I'm of the opinion that a lot of VC's are like money managers. Index funds regularly beat their returns but that doesn't stop them from think they're God's Gift.

VC's seem to be much the same. There's a lot of "black magic" to the funding process. In my experience, something that can't be logically understood usually has no logic behind it. Some of the VC's probably have real metrics but it becomes statistically impossible to find success using logic when you only fund a handful of companies a year. There's not enough data.

Just that they have higher odds.