I didn’t need the money when I started this job. So why do I invest in startups?
For the last 2.5 years, I’ve spent my days meeting founders and investing in early stage tech startups. Any payday is ten years away — but the fun of angel investing goes way beyond money.
The Most Optimistic People in the World
At dinner with a bunch of friends recently, someone mentioned how bad many US schools are.
I threw out one idea after another to improve them. “Could students learn online from the best teacher in the world? What about vouchers?”
One after another, everyone said “That’ll never happen” or “It’ll never work.”
I sat there, puzzled. Then I realized the difference between folks in startupland and the normies.
We try new things. And if it doesn’t work, we try something else!
Normal people aren’t used to thinking this way. And when we encounter the normies, they feel like an alien species.
Angel investors spend every day surrounded by the most optimistic, hard working people in the world. It’s a real privilege.
Wanna See the Future Before Anyone Else?
Not long ago, a founder pitched me on something really amazing: sustainable biofuels for rockets.
You can’t write this guy off as a crank. He had worked at SpaceX and Lockheed Martin and held multiple degrees in engineering.
Since I don’t know anything about rockets, I didn’t invest. But darn if it wasn’t interesting.
If the general public ever finds out about cool tech like this, it will be years from now. But when a founder creates something amazing, we investors are some of the first people in the world to know.
The New Needs Friends
This summer, I met an awesome young founder in London who needed some advice on sales and fundraising. His product was awesome: a cutting edge data analytics tool.
I introduced him to a founder I backed in 2021 who has sold several companies and raised millions in venture capital. They had a great chat and I think the new founder learned a lot.
As investor Jason Calacanis put it, “The new needs friends.”
When you create something new, it’s hard to get anyone to care about it. And it’s hard to know how to make it a success.
If I can be that friend that helps bring something new into the world, that makes me really happy.
And Yeah, Money’s Nice!
The truth is, you can make millions investing in startups. Many millions.
And I fully intend to do so.
Who wouldn’t want to have more money? Also, returns is how you measure success as an investor.
But that big payday is elusive. An IPO could be 10 years off, if ever.
So I make sure to enjoy the day to day. See an amazing new product. Help a founder who’s struggling.
If you’re thinking of investing in startups, find some non-financial motivations. They keep you going!
Wrap-Up
Above all, I’m curious.
Angel investing may be the best way there is to satisfy curiosity. Your entire life is about the new.
And not only do you get to see it before anyone else, you can help shape it — and even profit from it!
I can’t think of anything else I’d rather do.
Do you invest in startups? Why or why not?
Leave a comment and let us know!
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