How to Meet Startup Founders?

I'm sorry to hear about your father. I hope you're doing well.

My advice has two legs: 'don't be in a rush' and 'do the job of a VC'.

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Don't feel any pressure to write checks. Your best path here is going to be developing both a network and a reputation. That takes time. Think of your first investments as expenses en route to those goals.

Spend your first year simply talking to founders. Tell them that you're new to angel investing and just want to learn by being helpful. Become a force multiplier for them. Do portfolio support for free: help them refine job descriptions, trawl LinkedIn for strong candidates for the roles they have open in Greenhouse or Lever, send them snippets of great books or podcasts discussing a topic relevant to one of the things they're tackling (partnerships strategy, scaling a distributed company, fundraising from corporate VCs, whatever) ...

All this will begin to make you familiar with the problem set founders experience. This is valuable because it will immediately show up in any conversation you have with someone you want to invest in. It's also valuable because you will be able to discern which founders are strongest, as in better equipped to perform against that problem set. This is really the thing that matters most at the investment stage where your checks are going to generate worthwhile absolute returns.

Separately, if you are intentional about the area you dedicate your time to, you will begin to develop an understanding (and eventually, thesis) of one or two specific spaces.

Together, this will generate a valuable network and reputation. You'll know a bunch of people working on cool companies, and those people will always be talking about their company or other companies they are a fan of (whose product they use and love, or the founder is a friend of theirs, or they're in the portfolio of the same fund). Those people will know you, so any time you decide to say "Well hey, I'd love to talk to X", they're happy to make it happen.

Now, how do you transition to actually writing checks? Depending on how much time you spent on it, you may feel you know a few companies you think are worthwhile just from that initial exercise. You could start wading in there, but the other path is to move up-market where you can buy into 'safer' deals and test the knowledge I wrote about above.

You can find all kinds of cool companies through Angellist syndicates.

I'm talking here about Series B or Series A. You have to know going in what the opportunity set is: you probably won't see a $150k syndicate for a great company doing a $3m seed led by First Round or BoxGroup. What you will see are $10m A's or $20m B's with a $500k syndicate open, and that's what I'm suggesting focusing on.

Note that it's possible to circumvent the syndicate the bigger your check is, meaning if your goal is to write $100k checks, you can 100% lean on your now powerful network to introduce you directly to the founder. Syndicates are really designed for people with check sizes that are inefficient for a founder to pursue or who want truly hands-off investing.

Use your first half dozen checks to figure out what your sweet spot is. Do you like Series A where there's a product you can look at and customers to speak with? Do you like Series B where the focus is operationalization? Do you like seed where it's really about deep people diligence, or a sense of the market potential?

When you feel like you've found your lane, park in it and increase the volume.

One mechanical suggestion would be to do all of this from the start through an entity. It can be as simple as an LLC. This gives you optionality for the future. If this goes well and a couple years in you've got an attractive hit rate with some good markups, there is zero reason you can't become a syndicator yourself. Obviously you can do it on Angellist and open it to the public, but you have a wonderful advantage of working at a firm that definitely has a bunch of older guys with money. I guarantee you everyone is looking for cool stuff to do. If you have people who are happy to invest through you, you can use Angellist purely for the mechanics and skip its marketing function.

The interesting thing here is whether you end up wanting to pursue this as a career. You're fortunate to be in a financial position that a lot of really sharp, skilled people in venture are working their hardest to get to. A couple million dollars plus the ability (deal knowledge, relationship set, thesis or vertical familiarity, etc.) to invest are the ingredients for a successful fundraise. Many of the seed funds you see today were hacked together by people with less money than you have, and they did it in an era where there was way less capital sloshing around the private markets. 

So if you like this and do well with it, you could very easily decide whether to start your own place or join someone else's.

Venture firms will know you, either because founders introduced you saying "you have to meet this guy, he's been so helpful", or they've seen your name before on the cap table of a company they're investing in or attempting to, or you simply asked them for a meeting. Trust me, you will have people asking if you want a job. 

So, to recap, you have a blank slate that you can paint any story with. Build a network. Make a few investments, ideally in the same space. Talk to as many people as you can, all the time. Constantly meet founders. Use all the people you meet to introduce you to others. Once you're in a company, email the VCs in the deal, meet them, learn from them, and ask for introductions to cool people or recommendations on stuff to learn more. Keep your eye open for how to bring people who don't have the same access you do into your deals.

I'm sorry about your father. I know you'd trade away all the money to have more time with him. I'm sure he's proud of you, and I think he'd be happy seeing how intentional you're being about putting to good use what he worked hard to leave for you.

Good luck. I think you have a cool opportunity here.