

My angel investing strategy vs Joshua Schachter - wyclif
http://www.gabrielweinberg.com/blog/2010/05/my-angel-investing-strategy-vs-joshua-schachter.html

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webwright
I think a lot of "bulk" investors feel that trying to guess the success of
early stage companies is a lot like trying the guess the success of a person
when they are still in the womb. I'm always amused at the extensive diligence
you see with some early stage investors-- diligence where Google or Facebook
wouldn't have passed muster. I remember Joe Kraus recalling that someone
passed on investing early in Excite because they said, "Who's going to SEARCH
the internet? They'll just find the sites they like and bookmark them!"

I think it makes sense to get a gut feeling of the founding team (Can they
sell? Do they have a passion for the space? Do they seem like they are in it
for the long haul? Do they seem willing to pivot?) and it makes sense to
hear/believe the narrative of the market size ( <http://is.gd/ceLQU> ), etc.
Every investor is going to have the secret trait/quality in a founder/market
that they think is critical.

But trying to guess what founders and markets are going to do over a period of
7+ years shouldn't be about dozens of hours of diligence.

~~~
epi0Bauqu
Well said. I'm doing the kind of diligence you're recommending. My point was
that I at least cannot get a good sense of the founders in one meeting. I need
to build a relationship and see how they're approaching product, market and
customer acquisition even though I don't care about particular projections.

~~~
jimboyoungblood
I think one can get a good sense of a team's approach within an hour long
meeting.

~~~
epi0Bauqu
My gut reaction is usually right, but I guess I don't trust it completely yet.
Also, I don't need to meet in person more than once, or in some cases at all,
but I usually have follow up questions that I want answered.

~~~
jacquesm
An hour long meeting will get you a good feeling if the feeling is good, or
bad. If there is doubt then you may need (possibly a lot) more time.

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pchristensen
It's a big market out there and I think both Gabriel and Joshua will do fine.
They're investing in different kinds of companies and providing different
kinds of value, and they'll end up with the kinds of companies they can get
most mutual benefit.

~~~
epi0Bauqu
That was pretty much my point. I think for many reasons (and no ones fault)
that startup advice tends towards one size fits all, and that is really not
appropriate. Companies are in a continuum along many different dimensions, and
what they should do in terms of fundraising should vary as a consequence.

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maxklein
I believe that the Gabriel Weinberg method makes a lot more sense than the
Schachter method. From his thread, the impression I got was that he just had
some amount of money and wanted to put it in startups the way kids buy toys:
Hey, that's pretty cool, here, have $10k.

The Weinberg method seems more thought out and more like it actually involves
proper evaluation of the product. I believe that Weinberg is building his
intuition much better than Schachter, even though Schachter may be involved in
more deals.

~~~
joshu
Nowhere did I mention my actual strategy. Nobody asked and I probably won't
tell.

I am trying to do a lot of deals in order to build intuition. You cannot do
this without making a decision and then being faced with the consequences. I
have learned a lot that took more than a few deals to figure out.

I also have a keen sense of how portfolios of assets behave rather than a
small number of bets.

I suppose this is what happens when people without a clue make assumptions
about scant data.

And, honestly, it feels like you want to look down on someone.

~~~
epi0Bauqu
vs was poor and hasty diction on my part. I didn't mean to come across as
adversarial (or critical), so I apologize if it reads like that.

Can we still AYA, i.e. what about your actual strategy will you divulge? Am I
at all close that you're trending towards being the next Ron Conway?

~~~
joshu
I meant Max was sounding adversarial. He seems very angry, anyway. Big chip on
his shoulder maybe?

Some of it I will divulge. Some of it I'd be happy to tell you directly
someday. I should have dropped a note when I was last in Boston.

My investment serves several goals. I have a bunch of markers, horizontal
business types, and vertical industries by which I evaluate things like the
nature of competition the startup will enter.

I don't do as much due diligence, because I am following on with other
investors who DO do more of this. I also feel that there's a lot less value to
it at the earliest stages.

I am also looking to be more connected and more present in the Valley.
Consider it sowing seeds.

~~~
maxklein
Saying I "don't have a clue" and that I want to "look down on somebody" is not
very nice. I have no reason to be angry at you, do I? I don't know you.

Perhaps you're not used to people telling you their honest opinion anymore.
That's my opinion about your strategy from what I read in that thread - it's
what I think and what I will continue to think.

Sometimes you will do things that other people think is shit. Actually, most
things you do, some people will think it's shit. If nobody ever tells you
that, it means you are surrounded by dishonest people, or people that are
afraid of offending you.

I'm obviously not afraid of offending you, as I need nothing from you and you
need nothing from me.

~~~
joshu
Your tone feels a bit hostile. Between your comments here and in the other
thread, I get the sense you want to look down on me. That's ok, but I'm
calling out how your interactions feel qualitatively to me. The fact that you
get more upset when I pointed it out makes me suspect that my guess is
correct.

Anyway: You took a bunch of details about the output of a process you don't
understand intimately (have you ever done an angel investment?) and guessed at
what that process and mindset looks like internally.

How is this not the very definition of clueless?

~~~
joshu
Another one:

You know maybe a third to a half of the deals I've done, if you looked on
CrunchBase. Gabe disclosed none of the deals he did. But you have enough data
to declare which one is better?

~~~
maxklein
Yes, I do. I read both of your methods, and I have a clear preference for
Weinbergs method. It makes more sense to me from a neutral non-involved point
of view.

Sure I could just defer to the fact that you have done so many deals and
automatically declare you the winner, but I prefer to think things through on
my own. Even if I am wrong, having examined it myself, I will be in a better
position to understand why I was wrong.

I think you have a very thin skin and your attack against me is over-
emphasized for whatever reason. Perhaps you should explain what exactly it is
about me you dislike so much? From your very first reply in the last thread,
you were taking potshots at me.

~~~
_pius
_"I think you have a very thin skin ..."_

Pretty ironic.

