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> 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 i
by birken 9y ago
> 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 really good return on their money.
This isn't to say there aren't valuable signals perhaps involving "cool kids" status, but there are a lot of diamonds in the rough.
> I figured it would be more fun to be the beggee than the beggor for a change, and I was right about that.
As a much smaller time angel investor myself than the author, I'm still the beggor. You are only the beggee if you are writing 25k+ checks (and more like 50k-100k to really be the beggee). If you are writing 5k or 10k checks, you are going to be begging people to take your money, cool kids or not cool kids. So if you are looking to get into angel investing today without allocating 6-figure amounts to your hobby, I wouldn't advise doing it for ego reasons :)
- lisper 9y ago> we certainly were begging people to invest both at the angel stage and (especially) the series A stage. Oh, sure, but angels typically don't lead series A. And yes, finding needles in haystacks does happen. But for any founder who really has the knack, it only happens once :-)
- morgante 9y ago> This isn't to say there aren't valuable signals perhaps involving "cool kids" status, but there are a lot of diamonds in the rough. Yeah, it entirely depends on where you're positioned as an investor. If you have great deal flow, then you can limit yourself to cool kids. But if you're more obscure, it makes sense to seek a comparative advantage with undervalued companies.
- arikr 9y agoOP didn't claim that the cool kids always succeed, or that the uncool kids never succeed. Just that they have higher odds.
- taeric 9y agoAnd numbers backing the claim would help. A lot. I'm inclined to believe it is all a craps shot.
- logicallee 9y agothe article-writer OP claimed "There is a small cadre of people who actually have what it takes to successfully build an NBT [next big thing], and experienced investors are pretty good at recognizing them." which is hilariously and demonstrably wrong. we already have one person chime in with a counterexample (the person you replied to) and that is a very common experience. No, experienced investors are not pretty good at recognizing them. It's hilariously wrong to claim they are.
- arikr 9y agoBenchmark Capital has a pretty small number of bets, and a pretty high hit rate, from my perspective. They certainly seem better at picking than most. Though I'd say a lot of that is of course positive selection - the best founders self-select to Benchmark/Sequoia/A16Z, and to Greylock/Accel.
- aerosmile 9y agoGenuinely curious if your choice to group those investment firms is intended to imply something about them - such as they generally work together/compete with each other, belong to the same tier, etc.
- arikr 9y agoYes, due to tier.
- logicallee 9y agoThey could be awful at recognizing them and only invest when founders show up with a box pooping out bars of gold already, and not at any point before then, since they're so awful at recognizing them. so you can have a 100% success rate (investing only in founders that show up with a box already pooping bars of gold) while having a 0% ability to identify successful founders. a high hit rate does not mean you can evaluate founders correctly.
- empath75 9y agoHow 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)
- mstaoru 9y agoOr it pays one skilled non-tech employee for a YEAR here in China. I'd gladly take $10k in exchange for 0.5-1% at this stage.
- deleted 9y ago[deleted]
- deleted 9y ago[deleted]
- Neliquat 9y agoWtf is up with these?
- 3131s 9y ago...says Madeline44 and Nathalie45. Your username generator algorithm is lacking.
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