Investing

I credit a lot of my investing acumen to having a loose understanding of complexity science, as pioneered by everyone from Brian Arthur to Benoit Mandelbrot to Nassim Taleb. More

A great company expands the market it’s in. You need some sense that the market is expandable and it’s not limited to what it seems at first glance. More

As Vinod Khosla says, you want to invest in zero-billion-dollar companies. More

There’s a class of startups that look like tech companies on the surface, but then you scratch them with a fingernail and find there’s little technology underneath. More

One of the biggest red flags for an investor is when a team raises money before building any kind of product.  Business founders or sellers will say, “Hey, if you give me money, I will go and recruit the builders.” But if the team hasn’t built anything, what makes you think raising capital will allow them to do it? This is why having a product as the team’s resume is so important. More

As an investor you want to apply judgment to pick good founders who are attacking large markets with credible products. More

With first-time founders, you must test their ability to learn. Are they fast learners? Will they learn how to run a company? Will they adapt and grow? This is different than asking: “Are they coachable?” I believe coachability is overrated. More

There’s a running debate among investors about which is best: first-time founders or repeat founders. There’s no hard and fast answer. More

Angel investing is a game of exceptional outcomes; it’s not a game of averages. You’re better off with a portfolio in which nine out of 10 investments go to zero and the 10th one goes 1,000x, than a portfolio where all of them are 2x or 3x. More

Some angels insist on checking references of founders. This can work if you know what you’re doing, but reference checking is an art that most people haven’t mastered. More