I am a junior angel in Silicon Valley. AMA

https://news.ycombinator.com/item?id=1356140

by joshu • 16 years ago

193 227 16 years ago

news.ycombinator.com

I occasionally invest in startups. Please chime in if you are also an angel.

pg• 16 years ago

I think you can safely say you are an intermediate or advanced angel.

joshu104• 16 years ago

I guess junior is opposite to senior. I don't sit on boards, I don't lead deals, etc.

mattmaroon2• 16 years ago

Why don't you lead? I found when raising money that a lot of angels are like that. Is it just a time thing? If you found a startup you really loved, would you lead then, or just try to get someone else to?

zxz• 16 years ago

<--- Reddit is that way

joshu104• 16 years ago

IAMA is my guilty pleasure.

thejo• 16 years ago

* How do you hear about the startups you invest in? (Introductions from people you trust?)

* What is the one piece of advice you would give to people who pitch their startups to you?

* How do you add value?

joshu104• 16 years ago

> How do you hear about the startups you invest in? (Introductions from people you trust?)

They come from all directions. One of my best investments came from a chance meeting with the now CEO at a party.

> What is the one piece of advice you would give to people who pitch their startups to you?

Hard to explain. I do a lot of this by gut sense. I look for: - strong people doing things in interesting spaces - belief but not inflexibility; religion is bad. - an ability to roll with the punches: reactions are as important as planning

> How do you add value?

I am a product guy, so I look at the product and can evaluate it. Same thing I use to choose the investments, I guess. I am also reasonably well connected and will use that as asked.

paulgb2• 16 years ago

The "valley advantage": what attributes of a business makes a company most able to take advantage of the valley? Do this apply to b2b as much or just consumer tech?

PS for the uninitiated, AMA = ask me anything

joshu104• 16 years ago

I think the Valley offers much easier access to funding. There are also lots of support organizations here -- lawyers, banks, etc, who will understand your needs much better.

I don't understand b2b and am terrified of it.

jasonlbaptiste3• 16 years ago

What terrifies you about b2b (besides not understanding it)?

jmillerinc2• 16 years ago

What maximum % of your net worth would you allocate to angel investments?

joshu104• 16 years ago

http://en.wikipedia.org/wiki/Kelly_criterion

jmillerinc2• 16 years ago

Great. Any thoughts on parameter values?

danbmil99• 16 years ago

heh, I just browsed Fortune's Formula and read about Kelly math. Excellent -- it's just like playing blackjack -- gotta control your bank.

upshot: if he does well, in a couple years his typical investment size will be $20-$50K. Investment size is a proportion of bank.

mdolon• 16 years ago

When investing, how important is a founder's educational background and work experience? What do you think is the best indicator of a successful founder?

joshu104• 16 years ago

I would like to see people who have succeeded in tough environments. Some degrees are like that, some are not. Evidence of having built something is better.

einarvollset• 16 years ago

Hi Joshua

Would you invest in a pure mobile play (i.e. Something you needed a specific type of phone for)?

Reason i'm asking is that I quite often hear "yeah but what about everyone who doesn't have an XXX".

Cheers,

Einar

joshu104• 16 years ago

I am not fond of secondary franchises. If you are going to live in the shade of one tree, it'd better be a huge fucking tree.

I am also not fond of temporary opportunities. If you are doing X for Android because there's a successful X for iPhone and nobody has done it yet, then it's not a scaleable business.

mattmaroon2• 16 years ago

It worked pretty damn well for Playdom. They did X for Myspace because there was an X for Facebook and it took them to a huge amount of revenue.

It's scalable as long as you can keep finding new Xes indefinitely.

aditya2• 16 years ago

* What do you like to see before you invest? idea? product? traction?

* What do you give more importance? idea or team?

* You've had incredible dealflow recently, how are you getting into all these deals? (Foursquare, Square, StackOverflow, DailyBooth, Canv.as)

* Since you don't lead, if you run across an interesting startup, do you make introductions or only co-invest in deals that come from other people?

* Better location for a pre-funding consumer internet startup: NYC or Bay Area?

* Bootstrap or raise money? Any particular reasons to choose the former or latter?

joshu104• 16 years ago

> What do you like to see before you invest? idea? product? traction?

I am trying to build intuition. So some of this is gut sense. Sometimes I look at deals and say, this is obvious. Sometimes I have to sell myself.

I look for new things that are in spaces that have a comfortable competitiveness climate.

> What do you give more importance? idea or team?

Both are important. See above.

> You've had incredible dealflow recently, how are you getting into all these deals?

Luck is a matter of being in the right place at the right time, so I take care to be everywhere. I know everyone. Foursquare: I knew Dennis from NYC. Square: I knew Jack from twitter. StackOverflow: I was on a panel with Joel once. Canvas: I suggested moot to TED and introduced myself at the conference. Dailybooth: Asked for an introduction to me.

> Since you don't lead

If I like the product, I introduce it to relevant people.

> Better location for a pre-funding internet startup

I'm fond of both NYC and Bay Area. I started Delicious in NYC.

> Bootstrap or raise money

Venture money is only useful in some situations - where capital will help grow the business. I also want to see something where I will conceivably get out someday; that's either acquisition or IPO. Do many privately held companies pay dividends?

aditya2• 16 years ago

Thanks! To rephrase the NYC vs SF question, if you were starting a new company today, where would you do it?

huangm• 16 years ago

1. What matters most to you: team, market or product?

2. You've said that you typically don't lead rounds and let others lead instead. What other angels do you respect the most?

3. Are there any deals that you regret passing on?

joshu104• 16 years ago

> team, market or product

All are important.

> other angels

There's a lot of great angels out there that I like to learn from. Aydin Senkut has shown me a lot that I've liked lately.

> deals that you regret passing on

There are always surprises. I think it's important to compare my feelings at the time I passed to the current feelings to benchmark my intuition.

What I regret more is companies I did want to invest in but either flubbed or wasn't able to get into.

staunch3• 16 years ago

Whats the range of your investment size?

joshu104• 16 years ago

Almost always $10k-$25k. I am a very small investor.

jimboyoungblood2• 16 years ago

Someday you'll grow up.

johns3• 16 years ago

How much equity does that usually get you?

grandalf• 16 years ago

What value do you add (besides the money) to a project you invest in?

joshu104• 16 years ago

My product sense, mostly. My connections, a little. I try not to bother the founders unless they ask for help.

christonog• 16 years ago

How much are you willing to be available to the companies you are invested in? Does your bandwidth allow for companies that would like some product advice, but aren't interested in funding at the moment? If so, what's the best channel to ask?

patio115• 16 years ago

1) Entrepreneurs need to understand that [ ... ] or I will stab their eyes out. Please fill in the blank.

2) What is the most broken thing about angel investing?

joshu104• 16 years ago

> Entrepreneurs need to understand that [ ... ] or I will stab their eyes out. Please fill in the blank.

Communication is key. If you want people to do things, you must communicate in ways that facilitate the action. Make it easier for me as I am bandwidth constrained.

> What is the most broken thing about angel investing?

I haven't been doing this long enough to have a sense for that, which is surprising. I am frequently cranky about things that don't work well.

joshu104• 16 years ago

Funny story: When I see names in the press that look familiar, I often check to see if I've communicated with them. I saw an article about a company that raised money, and checked, and sure enough I had talked with them about it.

The entrepreneur had written ten paragraphs. I sent a "sounds interesting, send screenshots or a prototype" and they wrote ten more paragraphs. I didn't follow up.

However, smarter people than me invested, so what do I know?

joshu104• 16 years ago

Incidentally, I have sent at least three startups to your blog, just for an example of crisp thinking they needed to emulate.

patio115• 16 years ago

Thanks, that is a wonderful compliment. If you have something specific you like crispified, I'd be happy to do a summary post about it. (The user experience of accessing my blog for the first time is terrible if you're not coming to a particular article, since it degrades into "what am I thinking about this week" and doesn't usually include context for the last four years.)

rms• 16 years ago

Is Christopher Poole really moot's real/birth name?

joshu104• 16 years ago

I will ask to see his birth certificate.

My mother has met Moot... I should demand to meet his mom.

paulgb2• 16 years ago

I realize this is getting off-topic from investing, but since that's the spirit of an AMA, is there an interesting story re: your mother meeting moot?

staunch3• 16 years ago

Are you doing it for financial reward or for the enjoyment of it?

joshu104• 16 years ago

Probably the second, currently. I haven't seen a lot of return in real dollars.

mayop100• 16 years ago

Whats the best place to raise $200k for an early-stage internet startup. A single angel? A group of angels? A seed fund?

joshu104• 16 years ago

I guess anything that works.

In my experience, companies raising less than 500k are making a huge mistake.

trevorturk• 16 years ago

Why do you think that?

rdl• 16 years ago

Is there anything you'd invest $10k on a $4mm pre in that you wouldn't invest $25k in on a $4mm pre? Assuming a $500k-1mm raise.

i.e., do you invest within your range based on your feelings about the investment, or just how oversubscribed the round is?

For me, a $10k investment and a $25k investment would take roughly the same amount of thought and time, so really it's just a 2.5x bigger payoff if you win.

ct4ul4u• 16 years ago

What are you wearing?

joshu104• 16 years ago

I am wearing a red "foo camp" tee shirt from 2007, jeans possibly from j-crew, and white gym socks I bought at walmart.

a year or two ago I threw out all my mismatched pairs of socks and bought all identical white socks. now I do not have to match and fold the socks when washing them. I just pile them into the drawer.

rokhayakebe4• 16 years ago

++ on the j-crew.

pclark6• 16 years ago

I do the same thing, except I bought lots of socks of different colors from the same range. Best feeling ever - not having to pair socks. (and being told you're wearing odd socks like some kind of mad man)

Want to be friends?

joshu104• 16 years ago

Hi Reilly.

(Reilly used to be my boss in the 90s. Much later I asked him to be on the board of directors for delicious.)

icey2• 16 years ago

Rate of good versus bad pitches you get?

joshu104• 16 years ago

Actually, I don't see that many that are bad per se, but I don't understand or like everything I see.

Lots of bad entrepreneurs have problems that prevent me from actually seeing the pitch itself anyway.

I prefer to see prototypes, anyway. This keeps a LOT of crap out of the way.

ephermata• 16 years ago

What are the problems with bad entrepreneurs that keep you from seeing the pitch itself?

Thanks for your time answering these questions.

tlrobinson• 16 years ago

Why did you get into angel investing?

(also, do you talk to yourself often?)

joshu104• 16 years ago

Ha, I was starting to fill out obvious questions that nobody asked, then got embarassed and deleted it.

I wanted to try to figure out of I was going to be a professional investor someday. I discovered that the hardest part for me is saying "no" a whole lot.

Yes, I do talk to myself.

gruseom3• 16 years ago

What's something a startup has done that most surprised you by working when you expected it not to work?

joshu104• 16 years ago

Startups don't generally tell me about their decisions often enough for me to be able to benchmark this, I think.

gruseom3• 16 years ago

Well that brings up my other question, which I wrote and deleted: what's the median frequency with which you talk to startups you've invested in, and how does that change (in a given case) with time?

auston• 16 years ago

* What is your favorite investment to date?

* Was delicious boot strapped?

* How do you feel about a publishing co (a la O'Reilly or PeepCode) as an investment?

joshu104• 16 years ago

> favorite investment

They're all my favorites. I try not to do the ones I hate.

The ones that seemed very obvious to me on first conversation were Etsy, Weatherbill, and Twilio.

> delicious bootstrapped

I worked on it for two years before raising funding. But I did raise VC.

> a publishing co

Feels like a long slog. I'm not fond of content as a business.

carpdiem• 16 years ago

What's the most unexpected thing you've learned along the way?

joshu104• 16 years ago

Saying "no" is the hardest part. Entrepreneurs are by nature a persistent bunch.

shawndrost• 16 years ago

What portion of your investments are outside of the bay area? (If you travel frequently to NYC, exclude that too. I'm interested in how much remote investing you do.)

joshu104• 16 years ago

None.

jonpaul2• 16 years ago

Is that because you won't invest outside the Bay area?

dzlobin3• 16 years ago

This applies to me personally, but I'll ask out in the open: Are you interested in advising young startups?

joshu104• 16 years ago

I don't really do advisory boards. It has different compliance hurdles due to my work situation.

Also, in my experience, startups are bad at fairly compensating their advisors. I'd agreed to seven or so advisories in the past and actually gotten paperwork for shares just a single time. One startup actually had me come in twice for advice and then later told me they decided not to have an advisory board.

dzlobin3• 16 years ago

Gotcha, thanks.

What's a fair equity share for an advisor, btw?

samd2• 16 years ago

In general how far along is the startup by the time you invest?

joshu104• 16 years ago

I really want to see a working prototype first. Rarely do i invest without that.

jaybol2• 16 years ago

With that in mind, how do you feel about all of the people who rushed to send money to the NYU kids with the 'Facebook killer' in mind?

edanm• 16 years ago

How far along do you expect a prototype to be?

E.G., if I'm building a social web app, do you expect to just see a prototype with a few of the basic concepts? Or do you expect a first version that's already online and starting to get users?

jonpaul2• 16 years ago

I'm a big fan of the ideals of 37 Signals, such as embrace constraints, bootstrapping, etc. But, I feel that my day job is getting in the way i.e. time. Should I take the plunge and seek angel or continue on my bootstrapping adventures?

joshu104• 16 years ago

Not enough info. I switched to fulltime when my day job felt less important. Your attention and time are the scarce resource.

bramcohen3• 16 years ago

Was the recent stock market plummet your fault? Did you sabotage the investment banking industry on your way out?

Do you do back channel reference checks on founders?

joshu104• 16 years ago

You can't prove anything. I have an alibi.

maxklein3• 16 years ago

Let's say you invest 25k in a company. What's your expectation on when you will receive money, and how much are you expecting to receive?

joshu104• 16 years ago

I don't really think that way. Instead: will this be an enterprise worth being involved with? For example, are they going to change the world and make people's lives slightly better? Or do they, I dunno, write boring iPhone apps?

maxklein3• 16 years ago

So you're doing it to improve the world and not for the money?

jasonlbaptiste3• 16 years ago

When will you do something outside of tech? ie- food type of establishment (I see you mention this desire here a lot).

joshu104• 16 years ago

When I have a big enough purse that I can invest in things that will almost certainly lose money (unlike startups, where it's just probable.)

david9272• 16 years ago

Do you ever invest outside of SV? Outside of the US?

joshu104• 16 years ago

NYC too. But I'm from there originally.

My one non-dollar-denominated investment is also the sole acquisition from my portfolio.

david9272• 16 years ago

Is there a reason for that? I know that communication is key, but with Skype and daily builds, couldn't it be managed?

spoiledtechie• 16 years ago

Thanks for Answering... I learned a lot.

bramcohen3• 16 years ago

Why aren't you starting a new venture yourself?

joshu104• 16 years ago

That is an excellent question.

kalvin• 16 years ago

If, hypothetically, you were starting a new venture yourself, what kind of change would you want it to make in the world if it succeeded?

adityakothadiya2• 16 years ago

How does a startup approach/contact you if it's looking to raise funds? I understand you don't lead the rounds, but you might potentially introduce a startup to lead investors.

joshu104• 16 years ago

Figure out my email and send it to me, but I may not respond.

A better idea would be to send it to AngelList.

adityakothadiya2• 16 years ago

Great. Thanks for the recommendation.

runT1ME• 16 years ago

Would you have any advice for a startup that needs advisors and experience growing a company more than it needs straight up cash?

Is a company that makes this known a turnoff for angels, as by doing so it admits it doesn't have 'everything quite worked out'?

joshu104• 16 years ago

Find some advisors and mentors, then.

Honestly, set yourself up to make some mistakes and learn from them. Advice is rarely that useful.

If you don't need venture capital, don't raise. It sets certain expectations and puts you on a specific path.

joshu104• 16 years ago

So far I'm surprised that a) nobody has really asked about exits or returns b) people that have asked questions about their own situations have been incredibly vague c) no questions about background or current work or d) no questions about delicious's creation, founding, and later sale.

_delirium• 16 years ago

Sort of on a): Are non-exit returns ever something you think about? E.g. the possibility of buying into the next craigslist and getting x% cut of some large revenue stream, but never getting an IPO or buyout? Or is that just too uncommon, and/or people with those intentions never cross your radar because they don't seek funding rounds?

joshu104• 16 years ago

I don't know specifics about craigslist, but I haven't heard of anyone who is an investor of a company that pays significant dividends. Not saying it doesn't happen, though.

I suspect that folks who have large revenue streams imminent would go to some effort not to dilute themselves.

felixmar• 16 years ago

At what point did you decide to sell Delicious to Yahoo? Did you sell because of the money offered, because the initial idea was more or less finished or something else?

joshu104• 16 years ago

Two reasons: The second round was more difficult than expected, and I thought that search engine integration made a lot of sense.

samd2• 16 years ago

I think a lot of us have read Founders at Work.

How about this, has your wealth made you happier?

joshu104• 16 years ago

Not really, no. I like making things.

mwerty• 16 years ago

Why are you an angel investor? Since thats super-broad, here are some options (feel free to add more):

1. You think you can make decent returns.

2. You like helping people.

3. You find it a great way to avoid getting bored.

joshu104• 16 years ago

1 and 3, definitely.

I also like being near interesting projects.

pavs4• 16 years ago

I really enjoyed your Reddit AMA

http://www.reddit.com/r/IAmA/comments/azgs6/iama_guy_who_sol...

joshu104• 16 years ago

Ha. Not me, you can tell by the top section. He claims to be happy.

pavs4• 16 years ago

oops sorry. I did see your comment on that thread and didn't check the username of the OP. There are quite a few similarities between that guy's story and you, so I made an unverified assumption.

johns3• 16 years ago

Will you ever lead rounds/negotiate terms? How many more deals do you think you'll do before you reach that point?

joshu104• 16 years ago

Dunno.

I don't invest enough dollars to have that right. I don't have enough purse to increase the dollars I invest.

More importantly, I do not have enough stroke within the community to do this kind of thing.

I also am probably not ready to be a fulltime investor any time soon.

medianama• 16 years ago

Thank you for doing this.

joshu104• 16 years ago

No problem.

clutchski• 16 years ago

I heard you built one website a month, hunting for the right idea, until delicious clicked.

Would you ever fund a person you believed in for that kind of exploratory work?

joshu104• 16 years ago

I tried to build something interesting every year. I originally set out to be some sort of expert in social software (I think I succeeded, more or less) way back. In the past I built memepool and geourl and a bunch of other things you've never heard of.

However, I never really had the idea of building businesses, just interesting things. I wanted to get attention (I got myself invited to Foo Camp before I did delicious, for example) from folks outside my industry, as I worked at an investment bank.

I still build some small things here and there. I find it much more difficult to program now, though.

joshu104• 16 years ago

I think delicious picked up more users in a day when I left than in its whole first year of existence. So it took some time to figure out if it clicked... however, I know that I spent a lot of time making Muxway (delicious's predecessor) work right for me and had a good sense for what would work for other people.

rokhayakebe4• 16 years ago

I still build some small things here and there. I find it much more difficult to program now, though.

Care to share any links?

joshu104• 16 years ago

> Would you ever fund a person you believed in for that kind of exploratory work?

I've put money into a few things based on people's prior work, but generally the idea itself has to be interesting.

bdevil12• 16 years ago

Say you have an idea for a web startup, you're working on a prototype in your spare time. How should one make the jump from side project to getting funded? How did you do it with delicious?

joshu104• 16 years ago

Delicious started getting noticed a great deal. Press, etc. I think I had 30-40k users right before I started talking to Fred. This is in the days before user inflation, mind you.

I got several offers of acquisition for delicious in the 250k-500k range, and felt that if I actually worked on it full-time it would be worth more.

I turned down eight or so acquisition offers before I took VC.

bdevil12• 16 years ago

How did you host/fund it prior to taking VC? Was it so low maintenance that this wasn't an issue?

(Many have said this already, but thanks for starting this thread. Very insightful.)

johns3• 16 years ago

Has working at Google while being an active investor ever led to any conflicts of interest?

joshu104• 16 years ago

I generally avoid stuff that relies on heavy SEO or otherwise obviously directly competitive. Although I'd avoid some of that stuff merely because it is bad for the ecosystem before I worry if it bothers my employer.

I'm pretty clear where I work and what my burden of responsibility is. So entrepreneurs will end discussions when they learn where I work if I wasn't aware. Usually if there is a conflict issue it ends there.

I invest small amounts relative to my net worth and am unlikely to compromise my behavior for an investment. The E(v) of an investment, if you assume the 33% chance of a > 3x return is still not that big.

Although: Yahoo compliance forced me to pass on the first round of Twitter. Yet another reason I am annoyed at them.

jedc• 16 years ago

> Although: Yahoo compliance forced me to pass on the first round of Twitter. Yet another reason I am annoyed at them.

Ouch. I would have thought you'd use a stronger word than "annoyed"!

paraschopra• 16 years ago

1. Do you ask startups how exactly they are going to spend money? Or are you fine investing even if team doesn't know where each penny is going to be?

2. Since you must be involved with a lot of startups, how much time, attention and guidance you are able to give to an individual startup?

joshu104• 16 years ago

Use of capital is a typical open question. But no, I do not ask for a budget. They should spend most of it on people and the rest on other constraining resources.

A lot of them no longer need my help. Many don't use the time I do have available. I have plenty of time for my day job and even playing video games.

rokhayakebe4• 16 years ago

Would you invest in a used car dealership? (I am not even joking. I am launching one later this year.)

joshu104• 16 years ago

I invested in Carwoo. Probably a conflict.

agoric2• 16 years ago

What are the prevailing terms for angel deals you've seen recently, and what do you consider to be "market" right now?

joshu104• 16 years ago

Lots more convertible debt lately, which I am not thrilled about.

Or do you mean numbers? Every deal is different.

royrod• 16 years ago

Ok, so (like many/most angels) you like priced deals :)

Any other terms, or trends, you care to share?

(Roy, "truly junior" beginning angel in Boston)

agoric2• 16 years ago

I've heard of more capped valuations for convertible debt with negotiable interest and discount rates (and no warrant coverage), but also seen some angels openly demanding priced rounds. Are such capped convertible notes a good middle ground for debt that works like equity? Have you seen any that provide an alternative conversion if no priced round follows?

budu3• 16 years ago

Are you saying that you're not a fan of convertible debt?

pclark6• 16 years ago

I think that delicious is really awesome. I still use it pretty much every day, even though if anything the product has almost declined in quality over the past few years.

It feels like Delicious could have been the start of something even larger than a bookmark service, it's my primary resource for finding specific content (eg: rails + tutorial, photo + howto, etc.) I'm aware that that is a fairly large technical barrier in terms of how search works, but I feel it proves the potential for something really, really awesome. A real social search engine if you like.

Ever thought about buying it back off Yahoo?

joshu104• 16 years ago

I have. But then I'd be the bookmarks guy, and I'd rather go on to do something else.

gruseom3• 16 years ago

I agree with you. I noticed something about Delicious: when I add a URL, it's rare that someone else hasn't already bookmarked it. That means that Delicious has, to a first approximation, everything interesting on the web. All organized by humans in a rich way. That's an astonishingly valuable data set. Relative to that value, the use that's being made of it is so low it's criminal.

Even if they aren't capable of evolving it, I wish Yahoo would at least make it fast enough that I don't cringe every time I use it.

pclark6• 16 years ago

pretty much every change Yahoo has done has been a step backwards, except for changing the url to delicious.com

foomarks• 16 years ago

I second this! Please someone buy back Delicious, or make a new one:

+ Delicious is lagging behind in mobile support.

+ Delicious could be taking more advantage of the conversation that people are having in their Notes section.

+ Delicious could be taking advantage of the links that are shared between users: help me find users that have similar but unique interests as I do. This would be true social networking on Delicious!

+ Delicious places priority on what is "Hot". This is not terribly useful since a lot of "Hot" links have already made the rounds on Twitter or in my Google Reader first.

+ Delicious could be taking advantage of links that are not yet popular but have a strong interest in category niches.

+ Delicious could be taking advantage of a user's top 10 tags: it's not an accurate assessment of a user's interest, but it gives me a quick assessment if I want to subscribe to their feed.

(I wish I could make another Delicious, but I'm not a programmer!)

joshu104• 16 years ago

I actually did at least several of these. But they forgot how those parts worked and rewrote them poorly.

bjonathan• 16 years ago

Hi, I'm raising money for my first startup (Business angel round) and I read lots of blogs to be familiar with the process(Dixon,Suster,Wilson,VentureHacks) but I am still eager to learn more about the subject. Do you know other good ressources (blog, book,video) to learn about how to raise money and the mechanisms ?

Thank you

joshu104• 16 years ago

Those are good resources. You also need a good lawyer. All of the folks you mentioned are good people.

swombat• 16 years ago

What's the best way for start-ups to get in touch with you? Do you respond to email pitches? What's the worst way to get in touch with you? Have you ever invested in a start-up that pitched you by email?

joshu104• 16 years ago

Do something that I've heard of before they end up in touch.

Cold emails rarely turn into anything.

fleaflicker• 16 years ago

What do you do at google?

joshu104• 16 years ago

Press buttons, mostly.

coffeemug• 16 years ago

Do you get many business proposals from friends or relatives that you consider bad or uninteresting? How do you tactfully reject them? In general, did you have relationships with friends or relatives that changed in a significant way once you acquired a non-trivial amount of wealth?

joshu104• 16 years ago

A lot of friends are in the business. A bunch of the things I have invested in are things started by friends.

gyardley• 16 years ago

How should entrepreneurs screen potential investors to avoid personality or other conflicts?

Assuming you failed the above, how do you deal with an investor who's being difficult or disruptive?

joshu104• 16 years ago

That's a good question.

You have to talk to other entrepreneurs who took investment from the angel.

While any shareholder can cause problems, especially at that stage, a small percentage / non-board angel can't do TOO much damage, I think. But I've never really been in the situation. Ask grellas.

xg• 16 years ago

Three questions:

1) Why do you find it harder to code these days? Does that bother you? It seems like you're still keeping up with a lot of python stuff from your delicious tagging.

2) Why hasn't anyone advanced the ball past delicious with bookmarking? I'm still a delicious nut, but I really want good search tied into it. Is there no business model or no real use to the data?

3) Do you believe in the Ron Conway style of angel investing? IE. invest in many interesting companies for better returns? Do you ever participate in follow-on rounds?

joshu104• 16 years ago

> Why do you find it harder to code these days?

I don't know. Too many distractions and anxieties? There's a lot of noise in my head. Yes, it bothers me.

> Why hasn't anyone advanced the ball past delicious with bookmarking?

I don't know. I should restart Muxway (the delicious predecessory)

> Do you believe in the Ron Conway style of angel investing?

I don't know enough about Ron's model to make a judgement. All we know is that it generates more "buy" decisions. I think that having a larger portfolio is stronger. Sometimes I do participate in follow-on rounds.

btw0• 16 years ago

Will you invest in a Chinese company?

joshu104• 16 years ago

I really don't understand the lay of the land there.

coryl2• 16 years ago

Hi Joshu,

1) How aggressive are you in getting deals done? Are you more like "lets have a chat, sign here" or more like "okay, call me if you ever need funding."?

2) I'm actually working on a site similar to Delicious, http://www.howl.com. Its not quite bookmarking, we call it link blogging. What do you make of the market? Thanks

pclark6• 16 years ago

howl looks neat (good domain) how are you better than tumblr?

coryl2• 16 years ago

still figuring that out. I think we're lighter and easier to post with. We also don't offer any blogging tools other than pasting links. We think we can do comments and content discovery better.

joshu104• 16 years ago

I am not that aggressive. If the entrepreneur doesn't understand how I can help/add value/etc then I don't really push it. It's not something that comes up a lot.

Looks kinda neat. Feels tumblr-y. As an investor I avoid content-y stuff like this (how do you monetize? ads probably) but as a user and as a developer I like stuff like this.

toppy2• 16 years ago

Have you considered investing outside US, Central Europe for instance?

joshu104• 16 years ago

Not really. Maybe if I visited there. I don't like doing deals sight unseen.

toppy2• 16 years ago

Why not? In Poland we have beautiful girls ;) Additionally put an eye on http://www.globstar2010.com/en/index.php

adrianscott2• 16 years ago

I've done a series of angel investments, but was most active 99-01. Performance would probably put me in top decile v.c. for that time.

Had two liquidity events in last 2 years from advisory shares. Expecting an IPO in next year.

Most famous startup I passed on: Paypal, back when they were doing palmpilot stuff. ;)

Most famous startup I invested in: Napster, which went bankrupt

Best return: Giganet, acquired quickly by Emulex. Haven't heard of it? Could there be a connection? ;)

Present day: In the process of closing an angel round for my own new startup, mainly from friends I've known for a while who've built and sold off companies, plus a small number of friend of friends.

joshu104• 16 years ago

> Paypal

Ouch. I know the feeling.

Doesn't Emulex make connectors?

I would like to see some liquidity someday myself.

What's the startup?

We overlapped - I was at BofA Securities. My boss went on to Epoch Capital and then Schwab.

adrianscott2• 16 years ago

>> Paypal >Ouch. I know the feeling.

;) Yah, I also could have been in on Salesforce.com and a recent flip to MSFT if I'd pushed a little harder...

>Doesn't Emulex make connectors? Wow, I haven't looked at Emulex in so many years. That was at beginning of the decade...

>I would like to see some liquidity someday myself.

It'll come... it's funny that period between deal announcement and closing and liquidity, particularly w/ restricted stock and such. And also the ones that have taken 10 years to become liquid ;)...

> What's the startup?

Fosdev, I'll drop you a note.

> We overlapped - I was at BofA Securities. My boss went on to Epoch Capital and then Schwab.

Hehe, cool, I was helping Schwab Inst. first, then BofA Global Markets Group.

Utility2• 16 years ago

I am thinking about accepting an offer to join a startup with two founders (one technical, one non-technical) to be the first employee in a Biz Dev role. The company has no funding and a prototype will release in 1 month. I think the founders have been working for 5-6 months on it (probably 75% of their time in total).

They offer no salary, but a 1k / month stipend, and a very fair commission structure for sales revenues I bring in.

They offered me 1.0 - 1.5 % in common stock equity that will vest (as will theirs) over a typical 4 yr / 1 yr cliff path.

I feel that the equity offered is too low, given that my joining is a risky investment for me financially, similar to theirs as founders. What do you think is the appropriate amount of equity to ask for?

joshu104• 16 years ago

Would they fail if you didn't hire you?

Utility2• 16 years ago

Nope. I estimate that I can add 5% to the likelihood they succeed (which in itself is small), and about 20% to the upside if they make it.

kevinelliott• 16 years ago

I'd like to be an angel one day, but I'm still plumbing away at the entrepreneur thing first. I'd like to get a few successes under my belt, and really experience starting and growing the businesses, before I jump into investing.

What are some things I can be doing now to prepare myself for angel investing?

I am a junior angel in Silicon Valley. AMA

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