Angel: How to Invest in Technology Startups—Timeless Advice from an Angel Investor Who Turned $100,000 into $100,000,000

I prefer founders who are willing to pursue their visions long before an investor comes along and takes some of the pressure off of them. What this signals, in my experience, is that if these founders someday run out of money—and almost all startups do—they will likely revert back to not paying themselves, while still pushing the company forward wi

There are things in this life that you have control over, things that you have no control over, and things that you have partial control over. It’s best to spend your effort on the things that you have complete control over, like your knowledge and work ethic. If you’re constantly learning and working hard—two things that are in your control—good t

I use two methods to sort through the deluge of startups contacting me. I eliminate the small ideas and weak founders. Then I double down on the great founders and big ideas. While I can’t be sure which businesses will be the next Google, Uber, or Facebook, I can be pretty sure which businesses will not be—and not waste time engaging them.

I compare running startups or angel investing in them to being thrown into a large, pitch-black gymnasium with one light switch. You fumble around in the dark, having no idea what you’re doing, until you find a tiny switch, flick it up, and all is revealed. Searching for the switch can take five, ten, or fifty investments, but once you hit it you’r

Founders also love angel syndicates because they exist as only one entity on their cap table: the SPV. This means they don’t have to collect dozens of investor signatures when doing future deals. Instead, they just need to get one signature from the syndicate lead who legally represents all of the other investors in the group.

Those founders don’t need you, they don’t need your money, and they are not going to meet with you. You need to find founders who will become the next Mark Pincus and Evan Williams. The only way you’ll get into a hot deal early on is if you are invited into one or you get lucky. When you first start investing, you should meet with as many people as

Most wannabe founders are waiting for an angel to anoint them with a $50,000 check before they start working on anything outside of a PowerPoint deck, or worse, delusionally long emails explaining why everything else out there sucks and their derivative idea will win—if only you believe in them and cut them a check. If the most a person can create

Another major difference between your process for investing in startups vs. a venture capitalist’s process is that you will make your decisions alone, whereas VCs will debate every investment over multiple meetings with their partners. In fact, the main reason I’ve chosen to not join (or start) a venture capital firm is that the idea of debating my

For all ten of the startups you select, you need to write a “deal memo” explaining why you’re investing, what you think the risks are, and what you think has to go right for the startup to return money on your investment. You will review these deal memos every time the startup raises a new round of funding so that you can test if your original thes