Confessions of an Angel Investor

Do you think being an angel investor is trendy?
Yes. Very. People hear the rare stories of angel investments turning into big money. No one ever hears when people never see a return.

Has the success of companies like Facebook and Twitter caused delusions of grandeur for many startups?
Yes. The movie “The Social Network” painted a ridiculous picture of startup life. It’s fucking hard, and most kids don’t understand the sacrifices that they’ll need to make and the risk they are taking on when starting a business.

What kind of information are you looking for when listening to pitches — is it solely product- or service-related, or does the pitching team matter, too?
The team matters way more than the product or service. There are tons of great ideas. Great companies are built by great people. Many investors say this but don’t back up their words with actions.

What was the best and worst pitch you witnessed?
The best pitch comes from a person or team that already has some traction, has a clear sense of the problem they’re solving, and doesn’t act like they have all the answers or make me (the investor) feel like they don’t need my money (even if they actually are over-subscribed, etc.). The worst pitches come from people who act like they’ve got everything figured out.

Are young/startup companies that are valued way beyond what they should be a good thing or bad thing for the industry?
It’s a very bad thing. It sets unrealistic expectations for everyone involved with these companies, and it’ll ultimately end up killing a lot of solid companies that won’t be able to raise later rounds because of overzealous fundraising in the early days.

Are there too many startups that aren’t solving real problems?
Yes. Tons of companies that shouldn’t be companies — they should be features. The best companies are solving a clear need.

What’s the difference between the Valley and NYC?
The Valley has tons more ego from both VCs and entrepreneurs. NYC doesn’t have the tech chops yet. Both cultures could learn from one another.

What industry seems to pop up the most on your radar?
Recently, it’s been tons of consumer-facing mobile apps that shouldn’t be standalone business. I pass on multiple deals like this every week.

What’s the hardest thing about being an angel investor today?
There’s too much stupid money in the market pushing prices up, funding deals that suck. It’s no good for investors, and it’s no good for entrepreneurs.

What are your thoughts on celebrity blogger VCs?
Some of these guys are spectacularly smart and providing real value to entrepreneurs (Fred Wilson, Mark Suster, Shervin Pishevar). Some are just yapping and trying to build personal brands.