
Dave Shen: What I've Learned in Angel Investing - ivankirigin
http://www.dshen.com/blogs/business/archives/what_ive_learned_in_angel_investing_march_2009.shtml
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gregparadee
That was a very good read whether you are trying to be an investor or not.
Really laid things out and lets you know where investors are coming from.

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daveambrose
Also goods tips here to extract for entrepreneurs looking to raise angel
money.

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pclark
> Be Wary of Entrepreneurs Who are Building for Businesses They Have No
> Experience In

Does anyone have any advice on this? What if you want to do (for example) a
startup in music, but don't come from a music background. Can you mitigate
this point by having a few advisors and research to back your project up? Do
you _need_ a founder with direct experience in it?

We were of the opinion that we're coming from _outside_ the box is a great
thing - we know whats broken and how we'd fix it, whereas if you grew up in
the industry you might not be aware of it.

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dshen
I'll comment on this as I wrote the post...

Coming outside the box is a great thing. If you're in a startup versus a big
corporation, you're already enabled to work outside the box versus typically
being stifled. My issue is that I've met entire teams who had, upon further
conversation, skewed or incorrect impressions on how an industry worked. I
think this is dangerous and will cause extra "bobbing and weaving" in their
strategy, which costs them in time and money: money that an early stage
startup doesn't have much of.

So I look at this as a probability game: you don't want to lower the odds of
success by not really knowing how an industry works but raise it. Some
possible solutions are having advisors and being open to research, but I've
also seen teams who didn't have resident founders not really act on advice or
research. It's much better to have a founder who has direct experience with
that industry to be a daily, trusted member of the team pushing in the right
direction constantly BUT you have to not be discouraged by the way an industry
currently operates; you must have belief, focus, and drive to push disruption
to change the rules of the industry you're attacking. What often happens with
resident industry experts is that the team gets discouraged by all the
barriers - to me this is the killer of an idea, not the knowledge.

Can you be a success without having a founder from the industry? Sure - look
at Paypal who defied normal conventions of banking, amongst other really big
examples of disruption. Let's just say there are many factors that drive
success and that being disruptive is only one. Again, it's a probability game
and you want to load the odds in your favor for success, not lower them...

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alain94040
I attended AngelConf too and it was very instructive. Both for entrepreneurs
and for budding angels.

The only thing missing was some kind of template, or recipe for becoming an
angel. We heard from 10+ amazing current angels, so you can sort of figure out
what the rules and best practices are.

But it didn't tell you: if you want to become an angel today, do X (or join
X). That's the question I was hoping to answer at AngelConf.

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joshu
I've met him - he's a sharp guy.

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mattmaroon
I've heard good things about David, so he's definitely done a good job of
branding himself as a solid angel.

