What I’ve learned so far about Angel Investing, and Angel Investors

One of the things I’ve learned pretty quickly since I started Angel Investing about two years ago is that there seem to be two types of Angel Investors.

  1. The “know-it-all” – I’ve found that the most junior Angel Investors tend to fall into this camp. Many have never run a startup themselves but they make $250k+ in a corporate job or had a big win in the past and now consider themselves startup experts. They rarely invest and mostly waste founders time and say incredibly obnoxious things about startups and startup founders. Suffice it to say, this category of Angel Investor makes me sick and the second I find out someone is in this category, I stay away.
  2. The “givers” – the second category of Angel Investor I’ve encountered is those who want to do everything they can to help a startup whether they invest or not. Whether they’re big time millionaires or not, whether they invest in ten startups a year or one, they are deliberate about the meetings they take and they value founders time. Suffice it to say, this is the category of Angel Investor that I try to spend my time with.

So back to the title of this post, as a new Angel Investor I’m not trying to pretend I’m something that I’m not. First, I am not a “serial entrepreneur” and I don’t have any exits, instead I’m a founder and someone who has been in the tech world since the mid-90’s. At my core I’m an Engineer so more than anything I’m really interested in building cool things.

When I started Angel Investing I realized that there weren’t many resources out there for getting started with Angel Investing. I went to a few Angel Investor MeetUps but found that they were full of investors in category #1 listed above. Recently I went to a particularly obnoxious one where they invited a handful of founders to pitch but gave them only two minutes. When I asked why they gave such a short time limit the response I got was, “who wants to hear a founder talk for longer? My attention span is less than two-minutes anyways.” (Ugh, well that was annoying and a waste of everyone’s time)

So as a new Angel Investor I’ve found it harder than I thought to learn the ropes, until I made one breakthrough last year that made a huge difference, I found a mentor. 

Last year I met a very experience Angel Investor in SF and we started meeting for coffee every couple of weeks. He would share with me some of the deals he was looking at, what he thought about them, and more importantly, how he thought about them as investments. What really inspired me about this investor is that whether he invested or not, he did everything he could to help the founders he met with. Oh, and he also showed up 15 minutes early to ever meeting and yes, let founders talk about their business for a lot longer than two minutes.

I asked him if I could join him for some of his pitch meetings so I could hear the kinds of questions he asks, understand why he meets with certain founders, and what he does after the meeting. This has already proven to be one of the most valuable things I have ever done when it comes to learning more about Angel Investing. 

Going into 2019 I’m trying to do more of this – connecting with experienced Angel Investors in category #2 and shadowing them in meetings, learning from how they conduct their investment habits. If there’s a way I can help them in any way, I’d love to do it, but for now I know the best thing I can do is to listen and learn as much as I can.

My biggest takeaway about Angel Investing so far is that unfortunately there are a lot of bad players out there, a lot of people in category #1. I hope that in my own way, over time, I am able to get some of these obnoxious, egotistical Angel Investors to stop wasting founders time and to be more honest with themselves and those around them. While you might think you look impressive, you actually just look like a clueless jerk, and wasting founders time, IMO is one of the worst things you can do and shows how out-of-touch you really are.

I don’t mean for this post to come off as an angry diatribe. At the same time, it has been interesting trying to learn the basics of Angel Investing and meeting so many people that consider themselves experts. Isn’t it okay to not be an expert? Can’t we just focus on why we’re all really doing this? There are easier ways to turn money into more money, I want to invest because I love building things and I really enjoy supporting people building incredible things for the right reasons.

In 2019 you won’t see me at an “Angel Investing MeetUp group” or any upscale private clubs in San Francisco drinking martinis with the “Angel Elite.” I’ll stick to my people, the ones who take the bus around the city, or ride the Ford Go Bikes (my main method of transportation in SF), don’t brag about money/things, and who, like me, love talking about innovation and the incredibly creative people who have dedicated their lives to it.

What do you think? If you’ve read this far I’d love to hear what you have to say. Comment and let your voice be heard!

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