A few months ago, I read an interesting article in the Observer by Tucker Max who in full disclosure I had not heard of, and upon googling him, it made sense I was not familiar with his writings such as they are. However, the article Why I Stopped Angel Investing (And You Should Never Start) had some good insights, relevant to people who have not read I Hope They Serve Beer in Hell. So here are my key take aways from the article.
- There are a large number of people starting companies that have no business at all doing so.
- There is not a lot of effective information about going from a tested idea to a scalable company and what and how to do it.
- There is a lot of money chasing many good ideas, but few founders who can effectively execute. And the next 2000 and 2008 are inevitable.
- The economics of angel investing work against all but a select few.
- The structure of angel investing works against all but a select few.
In subsequent posts, I will expand on a couple of points as well as on the Shark Tank attraction in angel investing, and crowdfunding as I have explored that as well and have invested in opportunities on one site.
Also, it is somewhat relevant to note that I have invested about as much money as Tucker Max has which is perhaps why I paid attention to his article, I most regrettably have not had his returns although to be fair I started investing in 2013 vs.2010. But highly doubtful, for many of the reasons noted above that I will see at a minimum an overall 5X return, which is perhaps the key reason why his points resonated with me. But of course, I hope I am wrong.
See side column on right, Recent Posts for more thoughts on this article and other topics.