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The Social Subsidy of Angel Investing (danco.substack.com)
64 points by got-any-grapes on Dec 7, 2019 | hide | past | favorite | 8 comments



I run a Netherlands-based startup. I'm pretty sure that all except one our angel investors did it so they tell people about it at barbecues.

Some of them even proudly use "we" when talking about the company (that they have no influence over). As in "we just hired a new head of sales". I'm pretty sure that's a different vibe than what SF angels do, but seems to me that there's plenty places where angels invest primarily for the social signalling.


As a Swedish founder who spent some time in San Francisco I think this is a really good article that founders both in, and outside the Bay Area should read. The mechanics around fundraising are different in most cities and founders should really try learn as much as they can about their local ecosystem and act accordingly. Don’t read stuff on the internet about running a startup in The Bay Area and think it will automatically apply to you.


This article frames it nicely why small, early stage, helpful and active is how you build your reputation as a VC. You may not have a lot of financial capital, but because VC is a reputation market, you will still generate a lot of social capital by investing in great companies, that then allows you to build a bigger fund because you now have the reputation to systematically get better deals and into big deals with a big checks. Too often I see managers who have no brand go and raise a $150m fund, but they don’t have the network to get pulled into great deals.


What a relief this article was to read. It articulated and confirmed so many things.


Top shelf analysis that comes to the shocking conclusion that rich people make financial decisions to feed their own vanity and ego.


"Please don't post shallow dismissals, especially of other people's work. A good critical comment teaches us something."

https://news.ycombinator.com/newsguidelines.html


To be clear, everyone does this. Rich people often have more opportunity.

What's really concerning is that people change how they interpret facts in order to rationalize the same decisions.


I have equal amounts of friends (in NYC) talking about their early stage startup investments (Doubleclick! Pinterest!) or their successful stock investments - e.g. the Facebook IPO or buying into Amazon in 2003.




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