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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

#171

Post by lisper »

erikb wrote: post #166
lisper wrote: post #11

Earlier quoted context omitted.

Yes. [UPDATE: before you downvote this answer you should know that I am the OP.]

Oh, I have totally missed that part. Happy to see that you didn't lose the money without learning something. What decision have you made? Howling with the wolves or getting back to being a sheep? I'm still unclear in this part and actually hoped for some suggestions in one or the other direction.

Bah ah ah ah ah. ;-)

Seriously though, I do have a strong preference for erring on the side of being ethical and respectful of others. (But that could be the reason none of my companies have succeeded.)

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

#172

Post by Aubrey45 »

3131s wrote: post #160
[deleted] wrote: post #150

Earlier quoted context omitted.

[deleted]

...says Madeline44 and Nathalie45. Your username generator algorithm is lacking.

I'm making $86 an hour working from home. I was shocked when my neighbour told me she was averaging $95 but I see how it works now. I feel so much freedom now that I'm my own boss. This is what I do, ====http://ow.ly/P0wk30aVXfN

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

#174

Post by Brooklyn34 »

logicallee wrote: post #169
SeoxyS wrote: post #157

Earlier quoted context omitted.

If they keep growing into bigger boxes pooping gold, then you've done a pretty good job as an investor. It's all about IRR; if you invest and your investment grows, it doesn't matter what stage you invest at. Keep in mind that for every Series C company that's pooping gold bars still 90% will fail, and a lot of investors are gonna lose money investing at that stage.

of course, I said "100% success rate", under the scenario I sketched they're great investors. I just showed that this doesn't mean they can recognize the cadre of people who have what it takes. They could be 100% successful while having 0% ability to recognize anyone whose boxes aren't pooping gold yet.

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://ow.ly/P0wk30aVXfN

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

#175

Post by lazyjones »

dharmon wrote: post #163
ScottBurson wrote: post #68

Earlier quoted context omitted.

I recall seeing a comment by Paul Graham somewhere to the effect that Zuckerberg set off his "founder detector" very strongly. This was after Zuckerberg was successful, admittedly, but it at least gives some suggestion that someone skilled at recognizing founders would have seen his potential.

It wasn't a comment on HN, but during an interview (video) he did with MZ on YC. I don't have a link, but that may help. Zuckerburg was telling a story of how he built a "social" website to share notes for an art history class, except he didn't have any notes himself but got everyone to share theirs so he could pass his exam. This supposedly was an early experience that started him thinking about social websites and…

> Zuckerburg was telling a story[...]PG then commented how his internal alarm was going off saying "fund him.

Is this a story about PG's amazing "founder detector" or perhaps one about the learnable skill of telling a good story to potential investors?

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

#176

Post by lordnacho »

azinman2 wrote: post #6
seibelj wrote: post #3

My 2 cents - As an investor or potential employee when analyzing a startup, pay close attention to how scrappy and capital efficient they are. Do they have excessively nice office space? Are the founders making too much in salary? Does it seem like the executives are working like animals, or do they have the big company mindset where they take it easy? Startups are nothing like established, revenue-generating compani…

It’s all a balance act. My last startup went bust in part due to the fact that we avoided hiring as long as possible in order to save money. In doing so we missed our inertia when we first started and we’re hot, and as we dragged on we didn’t have the diversity of talent to help do the things we were bad at (and didn’t want to do) ourselves. Obviously super fancy offices, lavish meals, etc should be red flags, but yo…

> My last startup went bust in part due to the fact that we avoided hiring as long as possible in order to save money.

While not going bust, I had a similar experience. In the early stages, you think you can do everything yourself, and you can. Network, hardware, software back and front, systems, the lot.

So once we had a little success I found it very hard to get my cofounders to spend a bit of money on some relief. Ended up paying up for some guy who wasn't compatible, and let him go soon after, which soured their taste for hiring entirely.

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

#177

Post by ddebernardy »

kumarvvr wrote: post #149

The author has mentioned "random shit that markets do, like completely ignore clearly superior products..." Can anyone give me such examples?? I am curious.

Betamax (vs VHS) comes to mind. As does Microsoft (vs Apple).

Prices played a critical role in both examples, but one can put forward that the product was evidently superior than the alternative that ultimately prevailed.

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

#178

Post by z3t4 »

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)

For someone who needs to support a family and with a fancy office it's nothing. But for some kids in a garage it will come a long way.

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

#179

Post by sandralopz56 »

3131s wrote: post #160
[deleted] wrote: post #150

Earlier quoted context omitted.

[deleted]

...says Madeline44 and Nathalie45. Your username generator algorithm is lacking.

I'm making $86 an hour working from home. I was shocked when my neighbour told me she was averaging $95 but I see how it works now. I feel so much freedom now that I'm my own boss. This is what I do, •••>>http://ow.ly/P0wk30aVXfN

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

#180

Post by mysterypie »

Nelson69 wrote: post #98

So fundamentally as an angel you're in early. That usually means that you face dilution. I also wouldn't think it would be that unusual for the business to make a pretty dramatic pivot or two and that initial angel investment may have been for something else entirely by the time the company finds its legs. There are basically 3 things you can do in that dilution situation: 1) Do nothing and go from basically owning t…

> As an angel you're in early. That usually means that you face dilution.

I've always wondered why early investors don't include an anti-dilution clause in the contract? It could be structured in many ways, but it could be simple as "my share of the company will always be 18% (or whatever), no matter what, until I sell". Then when the company takes on more investment, it'll be up to the new investors and the company's accountants to do whatever share adjustments to keep you at 18%.

There must be some really good reason(s) why this isn't done and I hoping someone can explain.

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