Angel investing

Ron Conway describes how he moved from founding a computer company into full-time angel investing, and why he chose Internet software as a high-growth sector. He teaches investors to evaluate founders for character, determination, and how co-founders work together, while meeting the whole team and learning the company’s culture. He recommends spreading investments across a portfolio, adding value through hiring and introductions, and accepting that many investments will fail. He also urges investors to act with integrity and transparency, support founders’ execution without taking over their companies, and encourage civic engagement.

Paul Buchheit describes how he learned to invest in startups through successes and mistakes. He favors founders who communicate clearly, move quickly, accomplish a lot with little, and pursue ambitious or initially implausible ideas. He advises investors to prioritize founders over their own market expertise, act decisively on promising companies, and avoid investing based only on price, pity, cynical motives, or impressive numbers. He also stresses that seed investing involves luck, so investors should avoid drawing overly broad lessons from individual failures.

Michael Seibel describes his experience as an angel investor, emphasizing that investors should size checks around the potential return, move quickly, and invest when they have real conviction. For YC Demo Day, he recommends doing research beforehand and maintaining founder relationships afterward, since investment opportunities can arise later. He cautions that Demo Day hype and claims of being an exceptional investor can be misleading, and that most startups fail even with careful evaluation. He also discusses YC’s open application process, its focus on founder talent, and ways it learns from companies over time.

Geoff Ralston previews Y Combinator’s four-day Investor School, which teaches the basics of angel investing, including evaluating founders, understanding investment mechanics, and building a portfolio. He advises investors to meet many founders, seek deal flow, make thoughtful decisions, and be clear and kind when declining. Good investors respect founders, understand the limits of their own influence, and invest with conviction while accepting that a startup investment may be worth zero. The course also covers changes in early-stage funding, including accelerators, online investment platforms, and ICOs.