Judgment Gives You the Winning Lottery Numbers

But you still need a portfolio effect to be successful
At the seed stage, judgment is much more about people judgment, product potential and market potential than your ability to size up cashflows, customer acquisition costs or virality metrics—because you don’t have much data. When you have less data, you need a more diversified portfolio. In some sense, diversification is a hedge against the lack of knowledge. More

Everybody Thinks They Have Good Judgment

It takes years to know if you have good judgment
For the past few episodes, we talked about why you should angel invest and how to get proprietary dealflow by building a brand. Now let’s talk about judgment: how important it is and how to develop it. In the long-term, having good judgment is critical. Without it, you’ll end up with a bad portfolio; other investors won’t back you; you’ll lose your money; and your brand will suffer. More

Founders Backing Founders

Investing keeps you sharp—and plugged into what the best founders are doing
One great reason to angel invest is that it keeps you sharp. It’s an incredible way to get educated and stay up to speed in technology. Great founders will seek you out and spend an hour telling you what they spent the last year learning. Investing also exposes you to the different ways you can start a company. More

Be Non-Consensus Right

You have to work from first principles and make up your own mind
Most of what we say on this podcast is consensus knowledge, or wisdom. Experienced VCs will say, “Duh. Of course, that’s obvious.” But it’s not designed for them. At the same time, the real money in this business is made by being non-consensus and right: being correct when everybody else disbelieves. More

Be a Shadow Co-Founder

Create your own dealflow by helping companies get started
Do you think there’s an opportunity to build a brand investing at the pre-seed stage before—or simultaneous with—accelerators? Accelerators give advice on how to start a company at scale.  They don’t give you that much money, but they give you important know-how: how to put your company together, recruit and rev your idea; when it’s ready for investors; how to approach the first customers and measure customer growth; how to get your MVP out there. More

The Best Deals Come from Your Network

Branch out from your network after you’ve built your reputation
The best deals tend to come from your network—people you’ve trusted for a long time, especially early on. It’s notoriously difficult to invest in one of Elon Musk’s companies. Even in high-priced rounds, it’s nearly impossible to get into a SpaceX or a Neuralink. All the people Elon has made money with in the past swoop in, get first rights and take up the full allocation. More

Don’t Build a Brand in a Narrow Vertical

If the market never shows up or shows up late, your brand is shot
You don’t want to build a brand around a specific market thesis, right? You don’t want to build a brand around the transition from X technology to Y technology—because when that transition is complete, so is your brand. You also don’t want too narrow of a brand or a brand in a space that doesn’t materialize. More

My Original Brand Was in Growth Hacking

I pitched growth hacking to Twitter; they passed on it—but they let me invest
Strangely enough, my brand started out in growth hacking. I co-built a Facebook app that got 20 million installs pretty quickly, and I used that as my calling card with entrepreneurs. This was in the early days before Andrew Chen blew it open for the world. A friend told me about Twitter. More

There’s Very Little Innovation in Venture Capital

You have to be willing to do something that hasn’t been done before
Whatever your brand is, it has to be clearly articulated; it has to be messaged. It has to be authentic to who you are. It should be differentiated from what everybody else is offering, and it should resonate with entrepreneurs. The worst strategy is taking a lot of coffee meetings or saying, “I’m a good, passive, hands-off person. More