Last week, I said I'd share a bit about angel investing but got distracted.

In 2020, I ramped up my angel investing. I invested personally and as a Sequoia scout.

I ended the year thrilled about being more active, but glad I'm a builder not a full time investor.

Quick thread:

Investing in founders is a privilege.

The cliche is right: You get to spend all your time learning from people with expertise in things you know nothing about.

The time with them is a gift.

I've historically lacked capital to invest in startups (and not taken the @sacca-style credit card debt route).

I was friends with the first CEO of @Uber, @Intercom, @Loom, and a few other massive companies.

But no $, so no investment. Lots of regret.

A few years ago, I started investing $5-10k checks into founders I believed in. My favorite was @ProductHunt. Such a fun company.

But the volume (2-3 deals/yr) was never enough to build the kind of diversified portfolio needed to potentially see a 100-1000x return on one deal.

This year, I set aside enough capital, plus joined Sequoia as a scout, to really dedicate some time investing. I invested in about 10 companies, and passed on 50ish.

My takeaways:

1. I'm a builder. I'd rather spend my time making stuff than talking to other people about their revenue models, CAC, MAU/DAU.

2. It was pretty rare that I'd get a deal from a trusted contact that I wasn't willing to invest in. Sometimes the "pitch" was more of a formality.

3. If the person recommending the deal was leading the round, I invested 100% of the time. They were $1m+ in, and had vetted the founder far more than I ever would.

(Plus, I'd known and vetted *them* over 5-10 years. I know this is group-think. But so are yelp recommendations.)

4. Regardless, I tried to be thoughtful and deeply analyze every deal. I'd use the product, get other user's advice, etc... I'd write a deal memo on why I was/wasn't investing.

(This took an enormous amount of time overall, but good practice and part of Sequoia's process).

5. If my first instinct was "this isn't in my wheelhouse", I'd spend *more* time making sure I was passing because of fundamentals instead of implicit bias.

(An example of this was spending Saturday watching a live-streams on a glamor social network.)

6. I miss the days when every deal wasn't stupid competitive, "very oversubscribed" and "closing in days".

(I mean, I get it, and happy that founders have the power. It just gets a bit old when *every* founder thinks they're God and is expecting a decision and wire immediately)

7. I learned a LOT, especially working with Sequoia. I embraced the scout program (which is excellent) and took advantage of educational scout camps. Learn learn learn.

(Lots of other programs to learn from. I've heard amazing things about @beondeck & @firstround's angel track.)

8. I was overly valuation sensitive. A couple times, I hesitated and ended up paying 2-3x in the next round

(A pain I know @ShaanVP has felt too. It's just weird that seed rounds are $30m valuation. But that's where we are.)

9. Most of the asks from my portfolio are related to recruiting. I'm not particularly helpful with sourcing.

(There's probably a product to be built to help investors give better referrals.)

10. I'm grateful for the founders who have let me get involved this year @usebubbles, @Levels, @SourcetableApp, @be_pantastic, @holey_grail, @freshpaint_app and a handful of unannounced ones.

(And I found some @SpaceX secondary shares. Still hunting for @Stripe)

Going forward, I'll take the deal-flow and invest where I can, but make a less focused effort unless I can come up with (1) a model that requires less upfront time/effort (2) a more unique angle for me to contribute.

(Otherwise, I'll probably shift $ to be an LP in other funds)