Don’t Fantasize About What You Would Do If You Were the Founder
Naval: A common trap for investors—especially if you’re an entrepreneur—is to fantasize about the things you could do with the company if you were the founder. You’ll learn the painful lesson that it’s actually the entrepreneur who’s running the company.
It’s important to listen carefully and take the founder at their word about what they plan to do. Don’t get caught up in the idea that somebody else is going to run the company.
Angel investing is the opposite of value investing. Warren Buffett says, “Buy into a business that’s doing so well an idiot could run it, because sooner or later, one will.” That’s not the case with startups.
With most startups, almost all the value creation happens while the founder is intimately involved. So you’re betting on the founder.
If you bet on a founder you’re not excited about even though you’re excited about the market or product, often the founder will fumble the company or a competitor will come along with a much better founder. When that happens, either you’ll be conflicted from investing in the new company or the new founder won’t want to talk to you because you invested in a competitor.