What are some things you learned when you started out?
One important thing I learned is that there are plenty of great ideas out there, but not so many exceptional founders. To succeed in any startup, the founder(s) need a mix of human skills, technical skills, experience, commitment and more. I spend more time looking for that magic these days. A more technical “insider” investor thing I learned was that the terms for every single investment are different. Paying attention to the details and reading the documents thoroughly really matters. There can be hidden bombs that could hurt both me and the founders.
What do founders get wrong in seeking angels?
There are about 300,000 active angel investors in the U.S. and they’re all different: think risk tolerance, vertical or stage focus, the amount of due diligence they perform, the check size they write, the ongoing interaction they expect, etc. For founders, the process of identifying, connecting with, reeling in, and then continuing to work with angels post-investment is a big challenge! That said, a few things founders can stumble on:
What do people get wrong when setting out to be angel investors?
Some angels don't respect the risk asymmetry between them and founders. I mean any thoughtful angel will only commit money to startups that they can afford to lose. But a founder is working 24/7 for a long period, and failure means years of their life gone and an empty bank account. Then there is the opportunity cost from the corporate job they could have had, and a few years off their life from stress. A founder's risk is existential. If an angel can appreciate that, then what follows is respect. Respect means being honest with them. Not asking for mountains of due diligence, but instead trying to be helpful even without a check.
Do you actively seek out companies run by underrepresented founders?
Of my 15 investees, 13 have at least one female founder, so I guess yes. Hard to believe, but at the VC level only about 10% of all dollars committed and deals by number go to startups with even one female founder. Over 90% of venture firm partners are men. For people of color, the data is even more challenging. I am the first one to admit that when it comes to that intersectionality, I need to do much better in seeking out and committing to founders across multiple perspectives.
How do you find them?
Just look. The idea that there is a "pipeline issue" with respect to underrepresented founders is bogus. If you break out of that dynamic and seek, ye shall find. Getting out there at demo days and pitch competitions (especially ones focused on underrepresented founders) can help. As does being more open to unsolicited incoming asks: I "met" the (female) founder of a company I subsequently invested in on Twitter.
What areas excite you right now?
I’m not smart enough or well enough informed to pick out what is the new-new thing. I look for founders that deeply understand a problem and have a vision about the solution. For example, I'm pretty excited about Glassbreakers. They have been working on a solution that helps large enterprises with the types of diversity and inclusion challenges that have become all too visible in recent years. There are plenty of other #HRTech startups working on the same huge problem from different angles (e.g. Unitive, Textio, Atipica, Blendoor, Jopwell) and I am cheering them all along too!