The Wisdom Wall

“If you run into an investor who is asking for five-year projections at seed, you've run into what we colloquially call a noob. They don't know what they're doing. Who, who has five year predictions at this point?”

“it's usually better to have somewhat, um, equal shares, not, not, but not completely equal, and if one person has 51% and the other person has 49%, then they can control.”

“One thing to remember and keep in mind is that often startup founders are unemployable. Not always, but often. The best ones.”

“About lifestyle companies and why I, I think the safe is preferred in general to debt is because we've seen too many times where the fact that, um, there's debt there is used to kill a company that didn't have to die. And it's too easy for investors to call that debt when it's not payable.”

“Angel investors can, in limited cases, have substantive impact on the companies in which they invest. Mostly their impact is marginal, minimum.”

“don't try to be the last money in because you don't have any confidence in yourself. So, uh, some of the worst investor behavior is to say, Craig, I like you. I like your company. You're raising a million dollars. I'll put a 100,000 dollars in as soon as you raise 900,000, because you're useless. The fact of the matter…”

“It seems like kind of an open market, but it's not rational. It's seldom fair.”

“Sometimes the right investors will be the investor With whom you resonate the best and who you think is going to be the best added value. Sometimes the right investor be the person who is willing to write you a check first.”

“The best time to raise money is when you don't need it. This isn't always possible. But when you don't need money, investors see the biggest opportunity.”

“one thought process to go through is assume when you raise money that this is the last time you'll ever be able to raise. So raise enough so you won't need more, so you can get to profitability.”

“Interestingly, the very best investors want to get you before you have all that stuff, because you're expensive by then. The greatest, best investors are Airbnb before they're Airbnb, before they have traction.”

“It is really dangerous to choose too high a valuation. And in fact, it can kill your fundraising, because it's quite difficult to go to, ah, an investor who might kind of be interested, and you say, I'm gonna raise at a twelve million dollar cap. On my safe. And they were like, ah, I was going to invest, but that's…”

“Also, a good sign that an investor meeting is going well is when they talk at least as much or more than you do.”

“They're almost certainly better at you in negotiation. So if you do get into a negotiation, a deep negotiation, the one thing you have on your side is you can delay.”

“This merely means that the most important thing that you guys can do is build great products that customers love, and that has little to do with fundraising, except as an enabler of that. So trying to get the last dime out of fundraising is taking away from that. And it's usually counterproductive.”

“The absolute ultimate best way to connect with an investor is via an investor who invested in your company who will connect you to another investor. That is the best possible introduction.”

“Like, what happens if, if you think you know the solution and you build lots of stuff for it, you're going to be wrong. Cause you just don't know it.”

“Money just sitting there has sort of a gravitational effect. It makes your organization fat.”

“if you're not evaluating that when you talk to founders, you're making a mistake, because if you think about it, every giant company is built with an incredible team. And if you don't believe that the founder you're talking to can recruit and build this team of people who could have thousands of people underneath them,…”

“Meeting founders and making decisions is way more of an art than a science, and, um, as Dalton says, uh, unfortunately in this game I think you have to Lose some money before you can really become an expert, as much as anyone is an expert at, at, um, at answering the questions you need to answer to make an investment.”

“you need to find problems so dire that users are willing to try half-baked The one imperfect solutions.”

“one thing that, ah, for founders, it's easy to tell when an investor is not an A-plus investor is if they claim to be an A-plus investor.”

“just because you've made a lot of money investing, do not forget there's a significant component of luck. Involved. And, um, it's great if you all are the lucky ones that pick the one or two or three companies in this batch or YC, for example, that become multi-billion dollar companies. But just because you do that…”

“That if you end up on the founder side more often than not, then your probability of getting in the one company that will make all those other investments irrelevant is much higher.”

“You know that if you don't have the resilience you need, the toughness you need, the determination you need, the belief you need, it, none of the other things matter. Nothing else. How big the opportunity is, how much of competition there is or isn't, how much money you raise, how smart you are, none of that matters…”

“But it is true in the very beginning, before you've made your first angel investment, calibrate. So do spend, I don't know if it's a hundred or 10 or 15, you should.”

“In fact, if you think about it, if you act like a jerk to a founder, that might be, even if that gets you an extra 50% of your return, your investment back somehow, That might actually cost you way more in the long term because the way you get deal flow is because some founder says to another founder, you should take…”

“Um, I've invested in family. Don't do that.”

“You need deal flow. Find a way to get deal flow. We'll talk about that. If you don't have deal flow, you'll take the first thing you get.”

“Because when you're angel investing, if you're going for a 7.6% return to try to beat the stock market, you're in the wrong game. Right? It's a game of big wins.”