Angel Investing and Taking a Break
January starts and things always change.
So over the past few months I have been more involved in our own companies helping to sort some things out. This means over the past 2/3 months I have not been investing at the same pace as in the past, thus have had time to reflect on investing. For over 3 years I have been the first seed money into almost 50 startup investments, mostly in the UK, but also now across the globe, and indirectly invested via Ignite, Entrepreneurs First and Techstars in over 200 other companies. Many of these companies have gone onto become proper companies, many have raised millions in follow on money. The paper value of my portfolio has become very significant. We created one of the largest syndicates on Angellist in Europe. I have become friends with many founders, angels and VC’s around the world. Thanks goto James Routledge, YC and Yeemun for helping me do this, I cannot thank them enough as they are lovely, hard working smart, moralistic and I am honored that they helped me and become friends.
When I started it was all about helping out a friend, Paul Smith of Ignite fame, that then grew to helping some other people. This helping evolved into investing people I liked, with ideas I thought I could help with. It felt great to be loved by so many people:) I will not go into the all the details as they can be read on my linkedin profile.
Slowly over time these investments became more transactional investing than helping people. People started becoming a commodity in a system and I also started becoming a commodity in other people’s system. We started to get inundated with random emails with requests for money or help and people even got pissed off when we said no or told them their idea was crap OR that raising money was not what they should do in their best interests.
For over 18 months, myself James, YC, Yeemun and my long term business partner and friend Andy, discussed raising a fund. we got offered cash to do it, but every time I said no as it felt wrong. We had moral discussions many many times of why it felt wrong and we could never really nail it, but it just did feel wrong. So over the past few weeks whilst I have been on holiday I have had time to reflect:
- We watched VC’s we knew who are nice people fight each other to get into a deal
- We watched founders who were nice people lie to people to raise money
- We watched nice angels/founders/vc’s screw and lie to each
- We watched people almost grovel when a large VC was in the room or having one of lunches
- We watched good companies with good people go bust as good VC’s had backed them and loaded up the fixed costs and then decided they were not going to be their Unicorn company and drop them
- We watched founders fall into the trap that they should raise capital and be huge when they never should.
- We watched many people who had become in positions of so called GOD in the established system who I do not think have the abilities or the morals to hold such positions
- We watched founders become depressed as they “failed” doing something they never should have done
The morals of the system just seemed wrong. I have talked to many many people about how the system works, angels/VC’s etc and in public they are all very pro the established system, but in private many have their doubts about how it has evolved and how it is evolving. I thought we could be different in how we did things, and I think we were, but the system is established and many people are on the gravy train and can’t get off. I am in the fortunate position that I can choose to get off and so that is what I have decided to do and stop angel investing for a while
I will see you round
As a well known VC said to me recently:
love the people hate the system :(