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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

#111

Post by Janessa345 »

ScottBurson wrote: post #106
TheCowboy wrote: post #97

Earlier quoted context omitted.

Unless you saw something else, he was making a joke about having his own biases, not that he could identify Zuckerberg due to keen founder detection instincts: > And Graham knew that he had his own biases. “I can be tricked by anyone who looks like Mark Zuckerberg. There was a guy once who we funded who was terrible. I said: ‘How could he be bad? He looks like Zuckerberg!’ ” http://www.paulgraham.com/tricked.html

No, it wasn't that. I don't see it on paulgraham.com. It was probably an HN comment.

I get paid over $95 per hour working from home with 2 kids at home. I never thought I'd be able to do it but my best friend earns over 10k a month doing this and she convinced me to try. The potential with this is endless. Heres what I've been doing, •••••••••>>http://www.joinmate2.com

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

#112

Post by empath75 »

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…

How is it that a $10k check even gets a startup to take your call? That pays like one engineer for a month, if that. (Genuinely curious)

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

#113

Post by acjohnson55 »

mindcrime wrote: post #65

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. 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 wond…

I totally agree. In not so many words, the author explained how implicit bias works. It's not so different from the processes that shape the incoming classes of prestigious universities.

Want to know why these people can be recognized by experienced investors? At least part of the reason is that they know who looks like an NBT builder to other experienced investors. I would assert that this makes a massive difference in a founder's ability to close rounds and continue executing.

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

#114

Post by mojuba »

empath75 wrote: post #112
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…

How is it that a $10k check even gets a startup to take your call? That pays like one engineer for a month, if that. (Genuinely curious)

Considering that "cool kid" founders do engineering themselves and that they typically don't pay salary to themselves, 10k could cover their initial hosting or say hardware prototyping costs.

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

#115

Post by shykes »

empath75 wrote: post #112
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…

How is it that a $10k check even gets a startup to take your call? That pays like one engineer for a month, if that. (Genuinely curious)

In my experience founders taking a 5-10k check often do it as a favor to an advisor they like and who can't afford to invest more. Maybe the advisor helped them out in the past, or their personal brand or connection are relevant to the startup.

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

#116

Post by seibelj »

dbcurtis wrote: post #77
seibelj wrote: post #26

Earlier quoted context omitted.

Normal employees should work hard but not ridiculous amounts. Executives, whose compensation is highly tied to stock value, should be animals, at least in the early pre-revenue stages. That is my opinion.

Well, it's a marathon, not a sprint. A CEO that isn't taking care of him/herself isn't taking the long view. Sacrificing your health and not making time for thinking big thoughts is a bad way to lead a company.

There's a big difference between working super hard and working so hard that your health fails. If you aren't pushing 60 hours a week, you aren't even trying. At a startup, so many things are out of your control, but one thing you can control is working hard. All that time and effort, and failing because some other company out-hustled you is the worst reason to fail of all.

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

#117

Post by cakedoggie »

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…

> Like I said in the OP, you will be shocked at how things can fail. (And this is far from my only horror story.)

Did I miss the story, did you talk about it somewhere?

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

#118

Post by RandyRanderson »

It's impossible, with any certainty, for an investor to prove that his or her judgement is better than random chance. This is high schools stats.

What I take from this is that this person doesn't have a grasp if high school math or is not being honest.

Also if you listen closely to a lot of investors they'll basically tell you their metric is "can I sell this to a greater fool?". This is why there is so much investment in 'hot' areas when, in reality, those are the areas to stay away from as the unicorn shares are likely already over-priced.

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

#119

Post by Systemic33 »

danieltillett wrote: post #108
lisper wrote: post #79

Earlier quoted context omitted.

I was actually thinking of mentioning this, but there is a very strong counter-example: Google. One of the reasons Google went unnoticed for as long as it did (both Excite and Yahoo passed on opportunities to buy it for In fact, I think this is one of the reasons so many people are trying to re-invent Facebook. If Google could re-invent Excite and Facebook could re-invent MySpace (and Reddit could re-invent Digg) the…

Actually the "fighting the last war” effect was the reason everyone passed on Google. Almost all the VCs (and other companies) thought the search war and been fought and won five years before. Rather than looking at Google from an unbiased viewpoint (that Google was the first to solve search), they saw it as the 17th competitor in a mature market. I think the difference with Facebook is the network effect and that it…

> What ever failings Mark has a CEO he has one amazing strength which is a single minded focus to let no competitor to Facebook rise.

In the world of business, this is well illustrated by the market dominance of SAP. They have, and will buy out, or compete out startups that encroach on their market. This is why they are still the top pick for the biggest companies in the world.

Successfactor comes to mind as an example.

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

#120

Post by lisper »

graycat wrote: post #82

Good news: I can agree with some of the OP. Much better news: I do believe that it's fairly obvious that there are good solutions to the most important problem mentioned in the OP. First a remark on scope: I'm talking about information technology (IT) startups based heavily on Moore's law, the Internet, other related hardware, available infrastructure software, etc., and I'm not talking about bio-medical technology w…

> We can outline a simple recipe in just three steps for success as an IT startup:

You might as well put a sticker on your forehead that says, "SUCKER."

Four of my investments (including a startup of my own) were absolute slam-dunks according to your process: large, well-established markets, orders of magnitude price-performance improvement over the competition, good IP protection. They all failed.

Like I said: unless you are very, very lucky, you will be absolutely be shocked by the creative ways the universe will come up with to screw you.

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