Angel Investors, a Field Guide

Unrelated to article, but I had a call with Jean when she was running Akita pre-acquisition, and she was so thorough and thoughtful. We didn't end up buying Akita for various reasons, but I remember walking away thinking, this person can not fail.

> Martin and Mike both advised strategic angels instead of friends and family to fill out the round, so that’s what we did.

How is Kevin Durant (pro basketball player) a strategic angel for a monitoring/observability company?

I like this in general but I think it’s sad the friends and family who helped you don’t get any financial upside.

I also take issue with calling this angel investing:

> I angel invest primarily through my scouting relationship with the VC firm Andreesson Horowitz. They give me a budget for investing in each fund and I get a fraction of the carry.

> if a VC investor is doing their job well, they will make sure to keep investing in your company until they have a good amount of ownership. This means it is against their incentives to introduce you to other investors or do anything else that interferes with their ability to buy more shares in your company for a good price.

this is only true for larger multi-stage funds who compete with each other, not for Seed or Series A-only funds

>> I told him I wanted investment from Kevin Durant. It was fall 2018, KD was playing for the Warriors, and he had won Finals MVP earlier that year. I was a KD fan and had heard he did tech investing.

So you skipped a friend or family member because KD is good at basketball and has lots of money? Super "field guide" /s

> Elad was elusive but the angel who was most consistently influential and supportive during my entire five-year run at Akita. We had a fifteen-minute call almost every quarter, sometimes at an unpredictable time, but always full of great guidance.

How helpful can a person who spends less than 5 hours over 5 YEARS be? How much time are they even spending learning / thinking about the company?

May we all have this man’s network

Stay away from the Angel investor game unless:

1. You're extremely rich. 2. You see it as a learning opportunity or you enjoy helping, without thought of financial reward.

What will happen, at the slightest whiff of success, is that professional investors and VC will swoop in at a moments notice, and dilute you to pieces.

In the end, you will have paid for the company while it was small, to get it started, and then the VC:s will snatch it away by diluting you. Hence nr 1 above, but be prepared to spend!

I’m not quite sure what’s the takeaway here:

‘One conversation that stuck with me: I was telling Kevin how my two lead investors had both interviewed a key product hire for the company. One was positive and one was in the middle. Kevin said to always be “strong yes” or “strong no” if I could help it. I still hire according to this philosophy today.‘

Is the idea that you should ask for strictly binary yes/no feedback from interviewers, and only move forward if there’s a “strong yes” consensus from this process?

How to win the lottery, a field guide.

Not really anything actionable there.

I see the crux of this post is that they gave a lot of valuable advice to someone who was, at the time, inexperienced. Surely you can acquire sage advice without giving up equity by just hiring someone with experience. And they'd be onboard full-time instead of 15 minutes a quarter. It seems to me the biggest value is the obvious one. That they give you money.

And sorry for opening a political can of worms, but I wouldn't touch anything that touches Andreesen with a 10 foot pole at this point. He's taken a serious heel turn and is openly endorsing Fascism.

Good guide.

In the spirit of finding the right person through serendipity:

I’m actively looking for intros to angels who are interested in B2B lending. The tariffs have completely disrupted the US SMB lending ecosystem and automation is going to have to ramp up rapidly to close the gap.

Myself and my team have a AI automation tool, we are revenue generating, technical founding team with 2x maths PhDs

Please email me (email in profile) if relevant to someone you know

Fascinating. I guess people go through this in different ways. Don’t know any startup founders who took a path with this structure.

Ultimately she did exit to Postman so whatever she did was successful though of course one cannot cargo cult everything.

https://news.ycombinator.com/item?id=36787860

Hot take: Another woman talks about her emotional journey as an angel investor. I am tired of these articles. A huge number of them: You can beat them by investing in the S&P 500 via a low cost ETF. What (economic) value these angel investors providing? I will tell you: Little, to zero, to negative.

Great post. She applies her analytical CS thinking to the angel process.

If you don't want to lose your money, don't become an angel investor.

Kevin Hartz is the most desirable angel in the valley IMO. His advice and generosity with his time is unparalleled.

related, story of the startup https://newsletter.pragmaticengineer.com/p/how-to-sell-an-ea...