Being an early stage startup founder and an active angel investor sends a negative signal to your team. Reinforces a class divide and perception of not being all in (yes it’s rational to diversify but irrational belief is what people follow and what stops them starting their own)
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Depends on what your definition of active is. I’ve made investments in friends and talented founders I’ve met along the way, all while focused on my business. If anything its made me a stronger founder — you learn from others as much as they learn from you.
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Replying to @falonfatemi @garrytan
I was a founder, then active and successful angel investor before going back to being a founder. There's very minimal, if any, learning that makes you a better founder. Even if there were more, any unit of learning will be outweighed by the negative signal it sends to team.
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Replying to @harjtaggar @harjeet and
What about the access to context on how others are executing, the potential for them to be customers, potential to hire top performers if the companies are not working out? All that is minimal? Should a founder not invest in public equities either to avoid negative signaling?
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Replying to @pranavsinghvi @harjeet
Every hour you spend on “not your product” and “not your startup” is ultra under-leveraged compared to actually doing those things. Talk to users, get customers, recruit, hire and manage your team. Signalling is a real thing, but it’s minor compared to actual impact— time spent
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Time spent is high impact, yes, but Garry then you'd argue that literally any hour of time a founder spends not working on their company is "ultra under-leveraged"? Seems unrealistic. Angel investing is a comparatively high value hobby.
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I’ve seen too many startups ruined by it to really recommend it. There be dragons.
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Replying to @garrytan @bencasnocha and
Is there a line here? Good hobbies don’t feel like work. Being a good investor involves “work” (sourcing, vetting, advising, etc). Being a full on angel feels like a bad idea. Writing small checks to smart friends (or friends of friends) less so. But maybe I’m missing something.
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Yes of course there's a line, I've made one off investments in friends and would sum the time spent on it over 4 years to literally less than 20 minutes.
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