Nivi · September 28th, 2010
I’ve been doing a bit of blogging on a Q&A site called Quora.
Quora makes it fun and easy to write. Sometimes I ask and answer my own questions. Sometimes I answer other people’s questions. Here’s a few of my answers.
It’s always a good time to apply. You can now continuously update your application and we’ll review it every time.
Here’s how I personally filter the startups:
- If you’ve got good social proof, I’m done — I’ll make intros.
- If not, then if you’ve got great traction, I’m done — I’ll make intros.
- If not, then if you’ve got an awesome demo, I’m done — I’ll make intros.
- If not, then if you’ve got a killer team, I’m done — I’ll make intros.
- If not, no intros. Go back to work on your startup, improve one of these metrics, and apply again.
But those are just my personal filters. And my filters don’t matter much anymore. Any of the angels on AngelList can now share deals with their followers.
Social proof is when you do something because other people are doing it. If you’re walking down the street and everyone is looking up at the sky, you look up at the sky.
In this context, social proof is looking at what other investors, entrepreneurs, and advisors are doing. Customers don’t count.
I’ll disagree with Naval Ravikant on “An investor is choosing not to invest in your company and is making the introduction for you”. I don’t think this is as bad as he makes it out to be.
The primitive part of your brain will probably recoil when a peer sends you their rejects. But the logical part of your brain will ask why the investor is passing. And there’s often a good reason: wrong market, wrong stage, wrong geography, bad chemistry with entrepreneur, some known risks that the investor doesn’t want to take, etc.
Rejecting a deal just because a peer rejected it is mathematically unsound. Here’s the proof. Every deal you ever invested in was probably rejected by a peer at around the same time you made the investment. So, if your criterion is that you will reject deals that peers reject, you will never make any investments
How do I get started in angel investing?
For dealflow, check out Y Combinator and the other incubators that are popping up all over the world. Also check out AngelList.
For how-to, see Paul Graham’s How to be an angel investor, our follow-up How to be an angel investor, Part 2, and the AngelConf videos.
To meet other angels, check out AngelConf (roughly once a year), and introduce yourself to the angels on the AngelList Twitter List.
Who were the first 25 angels on AngelList?
We started with Naval and emailed the angels we knew. It spread and there are about 400 angels on the site now.
1. Naval Ravikant
2. Manu Kumar
3. Dharmesh Shah
Quora is the new cool place to hang out online. It is the Facebook for people who are more into ideas than existing social connections.
Love the blog and your work. Just spent an hour or Quora myself.
Can I ask you a question here rather than Quora?
As a new startup we are in the processes of building out our site. Our public beta launch will be February 4th, 2011. My birthday. Also happens to be 7 years to the day after facebook launched, one of our competitors.
When is a good time to approach angel investors? Thing is, we’ve got a lot of ideas being built into this site and we don’t want to run around spilling these ideas to everyone. Call us a little paranoid. We want our site to be out there publicly before people can start stealing those ideas. Stealing is the wrong word, but you get my point.
How much of a risk do we run of investors taking our ideas to some other development team? Especially if these angel investors run companies that could benefit from our ideas.
Cleantech is NOT boring. Aside from being wildly important for the future of our economy and therefore existing in a complex regulatory environment heavily dependent on political maneuvering, cleantech involves making real objects at the forefront of scientific advancement that actually do something more than marginally useful.
The only only way in which cleantech is ‘boring’ is in the respect that a) it’s expensive early on, making it harder to find angel and venture capital in order to build actual objects that ordinary consumers will never buy for themselves, and b) as in enterprise software, the success or failure of a company usually doesn’t depend on the reach and panache of their marketing efforts so much as the industry savvy of the executives and sales staff. Cleantech isn’t as popular among the VC community not because it’s boring, but because it’s difficult enough to require a more systematic approach.
That said, I do recognize that not everyone finds all subjects equally interesting. I mean, from my perspective, we’re talking about truly revolutionary changes to one of the world’s largest industries, an industry with reach as large as the internet, disrupting and potentially displacing some of the largest and most fundamentally evil companies on earth, and ultimately changing how we as humans live forever, but hey, that’s probably less interesting than a really cool new blogging platform for some people.
I get really sick of the utter bullshit that gets thrown around sometimes about how creative new web technologies are all important, as if the internet were the center of the universe, when most of the world isn’t even on the internet. Most of the world is still struggling with basic issues like getting access to energy, food, water, and sanitation; fundamental security issues, adequate medical care and education. The internet is very useful in helping with those problems and others, and I’m sure it will be even more helpful over time. And I don’t mean to rain on the excitement of happy geeks building up this great new thing. But don’t let that excitement distract you from reality, and what’s really important.