I have money, should I be an angel?
A lot of rich people have money. A lot of rich people don’t know what to do or how to invest their money. A lot of rich people are bored. A lot of rich people are bored of index funds and bond firms. A lot of rich people want a hard on. A lot of rich people want to invest in startups…if you know how to make them want to…(usually means share idea but don’t ask for money - they will ask you to invest)
Anyway, say you are the rich person, should you be the angel? Ask yourself one question: “Have I been a successful entrepreneur myself in a similar space?” If the answer is yes, sure you can invest.
If the answer is no, stay away. I don’t care if you’re a VC in healthcare and want to invest in a dot com startup, stay the fuck away and save your money. Unless you were an operator the odds are when you are investing your own money (Super successful VC’s are the exception) you will likely lose it all. If you can’t take over the entrepreneurs job if the entrepreneur went mad (which is always a real risk) stay the fuck away, I repeat do not invest.
Professional Angels should float to heaven broke. Angels never make money. Even if they are in a successful startup they usually get diluted to shit along with the founders. There’s an old saying which defines why banks are the most successful long term financial companies “Last money in, first money out”. An Angel is first money in last money out. Not good for your checkbook.
Even most seed fund go broke and don’t bring home the Alpha. Here’s why - seed = small $ investments with a lot of risk. There’s another saying that is usually true “Seed is for Suckers!” and it’s for a reason. Very few seed investors or angels make money. End of story and I don’t care how successful your entrepreneur was in the past. If you can’t do his job, don’t pay his salary!
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