Name: The Operator Investor: Angel Investing
Uploaded: 2025-02-26T19:16:05.496Z
Duration: 57 min 40 s
Description: The Operator Investor: Angel Investing

Transcript for "The Operator Investor: Angel Investing": There we go. And didn't something just popped up on the screen there. Hopefully, you guys can can see me or hear me. Yeah. So founder operator. Kyle, you're shaking your head. Can you hear me? Gotcha. Alright. Are we good now, everyone? Thank you for the feedback. We just moved from Zoom webinar to Goldcast. Perfect. So everyone says audio is good. Video But nobody heard the intros. Okay. Okay. Started from the top, Scott. Let's do it. Let's do it. What is a good live webinar without some technical difficulties? Alright. Well, I'll keep the intro more more succinct, but just wanted to welcome everyone, to our first digital live event, on this topic. So, of course, if you know GTM Now and GTM Fun, we create a ton of Is Scott frozen for you now? Same. Oh my god. The tech ops are not with us today. I'm happy to kick it off with just a round of intros real quick while Scott back gets back online so we keep keep it rolling. So hi, everyone. I'm Elaine Day. I'm a partner over at Alt Capital. We're a newer venture fund founded by Jack Altman. He's most well known for founding and scaling Lattice, the HR company. So we invest in seed and series a. It's a hundred 50,000,000 fund one. And personally, I've been investing for over seven years now, both just professionally as an institutional VC and as an angel investor. Started my career over at Microsoft many, many moons ago on the operating side before I joined the dark side of VC, and originally, I'm from Boston. So excited to be here. Alright, Nick. Over to you. Yeah. Yeah. I'll thank you, Lynn. Yeah. Excited Excited to be here, everyone. Nick Tippman. I'm a founder operator turned, emerging manager, new VC. I started my career, fresh out of school, going to an accelerator, got recruited to to join one. Started a couple of companies after school. Ultimately, many of those ended up being learning experiences, but most recent relevant before starting Tip Top Ventures. Was part of the founding team, head of marketing CMO at a vertical SaaS company called Greenlight Guru. We are a quality and regulatory compliance platform for the medtech industry. Wore many hats over my nearly decade run there. Looks like Scott might be trying to to butt in as well, so I don't know if, anybody else is, yeah, trying to hear can't hear Scott. I can't hear Scott. But, I'll finish I'll finish with my intro here, and then, Scott will try to get your your audio jumping in. But, yeah, I had an amazing run at Greenlight Guru. We had a nice exit to private equity a couple of years ago, and now started angel investing through that time period. Also became an LP in, quite a few different funds, which we'll talk about here later, including go to market fund. But now I've started my own, venture firm as well. It's called Tip Top Ventures, Fund One, not a hundred and $50,000,000 Fund 1. But nonetheless, going going well. I've made seven investments to date and, out of the fund and excited to to be here. Kyle? Give me a give me a chat if you can hear me before I start going. Okay. You guys can hear me. Okay. Alright. My name's Kyle Norton. I'm the CRO at owner.com. So we're a series b vertical SaaS company, actually part of the Alts Capital portfolio. Jack's on our board, backed by Redpoint and SaaStrfund with Jason Lemkin. And we're 30 plus million ARR. We sell to mom and pop restaurants, growing two and a half x year over year. Prior to this, I ran two business units different business units at Shopify, point of sale then, the Canadian market once we went, GEO. And I've been angel investing, advising, and involved in venture for, I don't know, last five to six years. I'm an LP in GTM Fund. I'm an LP in stage two. I don't write a lot of angel checks these days because I bring most of the deals I like to GTM Fund, but still do a decent amount of advisory. Alright. Sophie, are you moderating now? Love it. We're doing it. We're we're swapping out. But before we get started, we'd love to just get a sense for how actively involved in angel investing at Verne is. So you'll see a poll pop up here. I'll give it, just a minute, but feel free to pop your answers in there. Curious if folks are more new to angel investing, if you've done a little bit, or you're new to angel investing. So I'll leave that up for a couple minutes, but, really, the purpose of today is to pull back the curtain a little bit around angel investing. It's part of the inception of GTM Fund. I know we shared this on social leading up to this event and so forth, but it was really Max Altschuler, our general partner's angel investing track record that led to a lot of these interesting conversations around investment, which ultimately led to the inception and founding of GTM Fund. So we've always got our roots in angel investing and something that is constantly being discussed in our Slack and so forth. So I wanted to kind of run the session around it. Now to get started, I wanna open it up. Like, how do you get into a new home investing? Kyle, Lane, Nick, I know you're all involved, but what does that actual kind of first step look like? What did it look like for you? And that way people can really get a sense for, you know, maybe how they get involved. Yeah. I'm I'm gonna be yeah. I'm I'm happy to kick it off here. So, I got into angel investing back at the beginning of twenty twenty one. So I've been doing it, what's it, two, three, four, five year four years or so, now. When we had our liquidity event at at Greenlight after bootstrapping for seven years, I didn't come from money. So it was the first time I had some liquidity in my life and had to think about how I was going to allocate resources personally. I've always been interested in angel investing and venture. It's always been a long term career goal of mine to to get into venture and, eventually raise a fund and build a firm like I'm doing today. And I knew that my time at Greenlight would come to an end at some point over the the next four years, after that event. And so two things that I did specifically that got me into angel investing after that event. One, I just wanted to to learn and to understand. And so I went to a bunch of events like this, but specifically went on to AngelList, and ended up joining a a ton of different syndicates, which I think is actually probably maybe how I first came across go to market fund. But, I joined pretty much every relevant syndicate out there that I could find, and it really just opened up a a floodgate of vetted opportunities for me to start reviewing and, a low risk way, I'll say, to start flexing my decision making muscle. I think there was a a point in 2021 or 2022 where I was seeing, like, 70% of all the deals on AngelList, and it was it was super interesting, fascinating, all theses stage, focuses, not not a lot of focus, I I will say. And then, two, I I mentioned that I also knew I wanted to get into the investing side of things and venture long term. And so rather than going out and writing a bunch of twenty five, fifty, hundred k plus angel investments, and kinda exhausting that that capital. One of the other things that I did was realized that becoming an LP in different funds was a great way to kick start the network and get access to, a lot of different investments and get a view on a lot of different investments without having to make specific decisions on any of them, but also given the opportunity to make specific decisions, angel investments through SPVs and different opportunities that came up through those funds, like, being involved in go to market fund. Awesome. Super, super helpful context. I I had a similar journey actually through AngelList discovering syndicates, and I I've just always had an interest in in early stage investing, and I started to get inbound volume. My my journey into advisory angel was a little backwards because it started with, like, content and audience building. I was always doing it for talent attraction. I I think early I saw this competitive advantage to be able to hire at scale, especially in the Canadian market, which is very small compared to, many places. And so I just had a volume of inbound interest people, founders reaching out because they had seen content and wanting to, invite me to invest or advise. And then, I was like, oh, I should probably, like, learn how to do this well or get some exposure before I start ripping off checks. And so similar to Nick, explored AngelList, went read a bunch of stuff online. Like, anything online I could about angel investing, I started to read. And there was a really active group at Shopify at the time. And because a bunch of those folks had had, had made so much money from being in the early days of shop and and going public that there was a lot of people writing checks. And so I I just spent time with some of the folks that had written, like, hundreds of of angel checks. And, one of the really interesting lessons I learned early from Farhan Thawar, who's now the head of engineering for Shopify and and a big, Toronto based angel, is if you're writing early stage checks, you're probably not doing it to make make a bunch of money. You might, maybe, at some point, but, you know, the it's an it's an illiquid, it's an illiquid asset class with very long time horizons and, very volatile payoffs. And so if you're trying to make a buck, that's probably not the right reason to do it. And much like Nick, I've just had an interest in it. I I even at at a public company, I always missed early stage, so it was fun to, like, to stay involved in that way. And I think at some point, venture in the future could make sense for me. And so getting getting exposure to it was was of interest because, if you're doing it for financial gain, I don't know if that's gonna be the best path. Like, it would be arrogant of me to think that I'm gonna be that great at picking early stage companies, when I don't do it professionally and I don't spend a % of my time on it like Elaine. And so, the way that I think about Angel is if I really like a founder, I think there's a ton of upside and it's a journey I wanna participate in. I'll write a check. And advisory, I'm a lot more discerning because it's gonna cost my time, and so I can talk about my, like, founder evaluation framework at some point. But I would just say, like, Angel is probably I wouldn't encourage people to do it to make money. I don't know if that's a if that's, like, a controversial opinion, but it's more about, like, my love for early stage and my excitement to just, like, stay involved in early with early stage founders. I think it might actually be the worst way to make money or the best way to Okay. Good. Yeah. I mean, just look at the stock market. Like, QQQ, a bunch of index funds went up 28% and beat a bunch of, you know, all types of different asset class returns. So if you really want to make money, put your money in an index fund is my advice. But I think I've, similarly to Kyle and Nick, have always been curious about early stage. When I was back at Microsoft in Seattle, I would just go to a lot of meetups in the local area and city. I think a lot of you guys are based in the Bay Area. There's a lot of meetups here. But I'd go to a lot of, like, Madrona events and just, like, data meetups. I was really interested in infrastructure and some app layer businesses, and there were, like, certain hackathons and pitches that, you know, my alma mater would put on. So I would just go to a ton of events and then just talk to people. And then the founders I felt very, like, gravitated towards or was really, resonated with their missions, I would try to just spend more time on. And I think the biggest thing as you get started with angel investing is kind of planting the seed with folks on what exactly your value add and what you can help with. And so for a lot of you, I imagine it's like, I can help you, you know, hire your first AE or, like, think about how you bring on VP sales. So something very specific that people remember, and they'll be like, oh, I'm gonna go to Kyle for that. And then that's how you kinda get brought along the journey. But often your first angel checks, like myself included, are gonna be awful. Like, they're gonna go to zero, and you're gonna take the hits. So I would just, like, mentally prepare for that. A very good warning. And also probably one that most people weren't expecting coming onto this. I think a a big perception around angel investing is, hey. I'm gonna do it for the monetary return, but we've already opened up the conversation to that might not be the number one incentive to actually get involved in angel investing. There's a lot of other benefits that that paint the more robust picture around it. So super interesting to hear how you all got into angel investing. And just to take a little step back, because I know we had some technical difficulties at the beginning too. So thank you, everyone, for bearing with us through those. A little bit of background context. I'm with GTM Funds. I'm a VP of marketing. Work closely with Scott Barker. So we did a little bit of a trade off here, but I wanna take a a step back and and if we just share the stories of, you know, how everyone got into angel investing. But to even reel it back further, you know, we had some really good questions in the chat around what is an LP. So I want to take a moment to quickly define that. An LP is a limited partner, so essentially an investor in a fund. And to be an LP, often you have to be an accredited investor. So thank you, Joseph, for raising that in the chat. It's a very good point. What that process looks like is typically you have to meet one requirement of a few different things. So an income earning earning requirement, for example, are burning at least 200,000 per year, a net worth of at least a million, not counting your primary house. And there's a few kind of professional certifications that could also be one of the criteria, but super easy to also research online. It is a self accreditation process, typically. So let us know if you have any follow-up questions around that, too. Now heard a couple things around just overall kind of incentives of getting started with angel investing. It sounds like from a network perspective, from a talent perspective, now how do you source opportunities to either invest, advise, and get involved in? Elaine, you touched on this actually, so maybe I'll flip this back to yourself to get started. Totally. I think a lot of you guys are at a huge advantage because you're at companies with high talent density. I think of angel investing and venture investing in general as just talent identification. So who are the most talented engineers that you know, product managers? Who's most likely at your company to go found a company? And then getting to know them, helping them be a sounding board through their early ideation process, and then helping them with that zero to one being a design partner, making intros, etcetera. So I think that's honestly the best place to start. Great advice. Sophie, is the the question is about how to source, how to build deal deal flow? Yeah. So let's say somebody wants to get involved in angel investing and just the results of that poll to get started too is we're about a fifty fifty split as a group. Half of folks are already angel investing, half of folks are not, but are interested in getting involved. So So how do you get involved? Question. I'll talk about my path to it and then share some thoughts on other other things. So for me, it's it's really about, like, audience building, brand building. I've been writing on LinkedIn and doing the podcast thing for a bunch of years. It it's really slow to start, but now I get, like, multiple multiple LinkedIn messages every single week of founders reaching out for help or inviting me to write a check or or looking for advisory. And so that is a really, good path. Like, how do you get in front of a bunch of founders? At scale, I think, brand building and social media is is a pretty, is a pretty good path, but it's it's, like, an absolute grind. Like, I've I've was I've been writing and doing content for so long. Now it's all paid off, and it's great. I've got this, like, unlimited talent, faucet, and it's good for all these other things. But, if you're thinking about sourcing, you really have to think about your unique value. Like, why would somebody why would somebody seek you out, and how can you go and be helpful? I think the best deals have if I look at all of my best investments, all of my, like, hottest advisory, engagements it's all it's almost all been through my network and so if you have to just take on something and that first advisory engagement that first consulting thing that first that first angel check is probably not gonna be like awesome but if you like Harry Stebbings talks about like there's four S's in venture can you source select secure and service and the service piece is one of the ones that I think is where, angels can really over index and and carve an advantage. Can you just be super helpful to a founder and actually help them solve problems and, move their business forward? Because if you're great with one founder, who are all of their buddies? It's other founders. And then for me on the go to market side, if I can, you know, really help somebody figure out part of their sales motion, their launch and onboarding, their their CS, and they're excited about it, they're they're gonna tell their friends and be like, oh, I was stuck and then we're doing this thing, and then they're gonna ask how did you figure it out? Oh, I got this adviser. That is where most of my highest, most competitive stuff has come from. And I I think, like, over time, you just need to slowly climb this ladder by being, more and more helpful. And if you're good at it, and you're legitimately helpful, like, that that network will span pretty organically. I don't try very hard to, like, work my referral network. I'm not I'm I've never asked, hey. Do you have any other founder buddies that can meet? Because I only wanna take on, like, a really small handful of advisory things at a time, which is actually a good thing. Like, it it the constraint makes me, I think, more selective. But if I wanted to, I could go and ask every single founder for introductions and really, like, hustle on it. I don't because I've I'm a full time operator, but those would be the two things. For me, it's been, like, brand brand and audience building, and then just being really helpful and and having, and having it work organically. What the one other thing I'll say about this is you have to have a super, super long time horizon to do any of this. And so there's like no payoff in the short term. There's no financial benefit in the short term. Like all of this stuff has a very long time horizon. And so it just takes a lot of discipline and commitment. But if you do it and and you think about long term relationships and being a long term partner for the funds you're involved in, the investors, the or the, portcos that you're spending time with. If you if you just have a long time horizon and try to be really helpful, like, good things tend to stack over time, but it's it's long. Yeah. The compound being stacked. 100%. Well well said, Kyle. Yeah. I mean, we're all go to market current or or former go to market executives here. Right? So we we know how to build funnels and and source leads and and customers. I I don't think it's that much different from an investing standpoint. And so when I was getting into this, I thought about, like, you have an inbound channel, you have an outbound channel, and you have a partnership channel. Very similar to to Kyle, my thesis coming into this, was all around brand building and content and and driving new opportunities to myself. And to your point though that that takes its own process and its own work, and you gotta have a benefit of why you're doing it. I don't think anybody is gonna be creating content in their brand, full time as a full time gig to source angel opportunities. Right? But my thesis coming into this, having built a media company focused on startups and entrepreneurs outside of Silicon Valley prior to joining as part of the founding team at Greenlight Guru, and then essentially building the largest, media company in the med tech industry inside of Greenlight Guru and that being our main sourcing mechanism. My thought going into to venture angel investing and then eventually going into venture full time, was to go run back basically the the same playbook. And, when I was kinda transitioning and and getting, spending more time or full time, doing the angel investing and going the the venture route, one of the hypothesis that I had was if I created content, built the founder brand, built the investor brand, that I'd be able and posted continuously on social that I'd be able to attract high quality off market deals from top founders in the world. And so just ran a little mini hypothesis experiment for myself with posting every day on social for thirty days and saw what the outcome was and, it it totally worked. One of those posts ended up being the the thesis for Tip Top Ventures, which ended up kinda going mini viral in the the venture and start up community and ended up with a ton of inbound from top tier firms and and top founders as well. But also, like, building a go to market engine, you have to have a system behind that if you're gonna process all of that coming in. And so I actually pressed pause on that as I continue to explore. That was just one of the check boxes that I wanted to check before deciding to make this decision to go full time, for for this into my career. But pressing pause and and coming back a little bit, I think the the old adage that, like, your network is your net worth, really holds true here. And what Diane was saying is, like, a lot of you or Lane, excuse me, was saying, a lot of you are in a lot of these high flying companies with a lot of great coworkers, and that's a great way to to get started. But if you actively start putting yourself out there and trying to be within these networks, then the best deals typically come from the people that you're interacting with. And so, I think spending time deliberately creating relationships with others that have great deal flow as well and then being able to point to your personal brand, your value add as to why those other investors, those other angel investors, those other executives would want to bring you into the top deals in the hottest rounds, creates this little mini flywheel. And so I think the the partnership channel, out of the three has really been extremely effective, but it really is just another way to build an inbound channel rather than doing it social and kinda going very wide and broad with the audience that you're building. If you can create a relationship with a dozen, two dozen, or, like, last year, I think I I talked to a 20 plus different venture funds, and can create relationships with them to make you, top of mind when they are looking for that value add check to come in and and round out around or bring in the the angels. That's that's been, extremely fruitful for me. Just be helpful. I think there's, like, one magic to it and, you know, maybe it's cliche, but it's funny because as you're talking, I get a I get a text message from somebody who I met through GTM Fund. We've become friends over the last, like, three or four years, and he goes, I'm gonna make an intro to a YC founder. You need to take equity in. Fucking cool product, crazy early traction, and I'll leave out what the company does. But, like, you know, this is just somebody that I've sent a bunch of, put founders to because he could be helpful. And there's just a you know, I'm not doing it because I'm trying to get something in return. But, if you can just be really helpful to people in the ecosystem, like, it'll eventually pay off. And I'm probably not the model to to follow, to be honest. Like, Nick is way more intentional. He's now an emerging manager. He's he's done it more, like, proper. I am a just on the side interest advisor investor, And so I'm I'm much more laissez faire. I turn so much away. But I think, like, just be super helpful all the time and, like, the this ecosystem will pay you back. It's crazy how much it happens. That's great advice. And say you got this text and for anyone who know again, we're about a fifty fifty split on who's already actively engaged and who is not. What kind of check sizes could someone anticipate who has not yet dipped their toes in angel investing? Granted, of course, it ranges considerably, but just for everyone in the audience who hasn't yet dipped their toes in to be able to level set. Depends on how much pull you got. If you're super duper helpful and people want you in the round, maybe they'll let you write a five k check. It's it's it's a pain in the butt for somebody to let you write a five k check. Like, it's it's it's that would have to be a very exceptional circumstance, but, you know, I'm sure Nick's written some big ones. Elaine's probably written good ones too. I think he really reaches to Kyle's point. It could be anywhere, like, I've written a couple grand all the way up to, like, $10.15 k. They are meeting like, they stack up super quickly. So to Kyle's point, just to be really discerning about who you end up wanting to angel in and engage with moving forward. Because after you write the check, a lot of my angel friends are surprised that, like, you don't really hear updates from the company. Like, occasionally, the CEO might reach out and ask you for your advice on something, but you're not privy to information rights. So you're not gonna get a quarterly update. You're you have it's basically a black box, so you don't know how the business is doing. So just being okay with, like, letting a check rip and fly and then holding it for a long time horizon. Yeah. I I think that's that's well said. I think most founders, when they're thinking of angel investors and looking to to round out their round is typically, like, in a in a 10 to 25 k range when you're at the pre seed and seed stage. I was at a an event with some high net worth last night with Pitch It. They were pitching an event and the the company, one of the founders, many exits, done very well, with about 40 other high net worst in there, was raising a $7,000,000 round and the the minimum to come in as an angel was a hundred k. But that's a highly competitive round with, great investors in bond. To that point, like, you would have to really be able to show your value add if you were gonna come into that round, at a lower than a hundred k check. But that's definitely, more the exception than the than the rule, I would say. I think the smallest that I've seen being able to invest directly on the cap table is 5 k. But I think founders realized too that the reason that they're bringing angel investors on board is not for your capital. They want to allow you kinda up a a large enough amount or small enough amount that it's meaningful for you. But, typically, what the founders I found, but why they're bringing angel investors onto a board at least or onto into a round, at least when it's a professional round where you have a lead pre seed investor or a lead seed investor is because they want the value add to to round out those checks. And so, yeah, they may let you in as low as low as 5 k. Typically, in that, yeah, 10 to 25 k is what I'm seeing, at the early stages there. Unfortunately, there's an inverse correlation between the size of check and the quality of the company. Like, if you you don't wanna write a big check and somebody's if somebody's letting you write five k and you're not super duper useful and and sort of well known as somebody who's gonna be really valuable to have on the cap table, that might not be a great investment. The the same with, like, the deals you get into as an early angel are are inversely correlated with their success. If you can get in there as, like, a random angel who has no brand and no, like, founder, references. You're not getting into bad deals, but, like, that's that's just how you've gotta learn. Absolutely. And what do you look for in a founder? How do you evaluate companies from your end? So I have four things that I look for. So you're obviously looking at at team product market. You want big markets or a path to big market. You want early signs of product traction. And but for me, I'm, like, 60 to 70% focused on the the caliber of the founders. It's not even team. Like, people will say they're evaluating the team, but almost everybody's gonna change other than the founders if you're writing, like, precede seed checks. And so they need to be able to continuously assemble that team over time. So I'm looking for founders who are are forces of nature. Like, do they do they have, like, a drive, a presence, a in in authority, a gravitas that just pulls people in? Because you need to be able to raise money, bring in talent, close deals. Do they just have, like, an insane psychopathic drive to win and and this sort of aura? So, force of nature, supercomputer learner. So are they just, like, way smarter than normal? Like, are they not even just like, wow, this person's really smart. They have to be, like, the next two standard deviations smarter than that to to survive, in my opinion. So so super high intelligence, but a high learning motor. You can get in oftentimes when I'm talking to founders, I'll suggest a book and I'll see how fast they read it and what the questions are the quality of the questions are that come back. So I'm looking for learning aptitude. I'm looking for founder market fit. So why should this person win in this market? Like, what what unique insight do they have about this market, and why do they care about this market? Like, do they really do they just wanna be a founder, or do they do they have some, like, insatiable urge to to solve this problem and a reason why they should be the ones to uniquely solve that problem? And then the fourth one is the one that is the very difficult one to find when the other three are present, which is enough intellectual humility not to blow it all up. Because what I oftentimes see is like late series a, series b, You know, you can't do it all yourself at that point. You know, you really need to rely on your VPs, your other c suite execs. You need to rely on the advice of your advisers. And and I have no data to back this up. This is this is very, like, anecdotal, but I oftentimes see founders just blow up at that sort of mid series b point because they can't listen to anybody else's opinion. And then they just can't, they they don't have enough humility just sprinkled in. You're not gonna get over the like, founders aren't gonna be a real humble bunch. You don't want them to be. They need, like, an insane confidence in themselves to try to, you know, make a dent in the world, make a dent in the universe as Jobs would say, but they need enough intellectual humility that they won't, like, have the whole thing comes collapsing down on them. So those are the four things I look for. I think the main thing I would add to that, I completely agree with that framework, Kyle, is, I really like the high slope point. So, like, how quickly do they learn? How quickly do they iterate? And that feeds into, like, developer velocity as well. So, like, taking Dekogon as a recent example in the customer support space, they iterated on three different products over the course of, like, three to four months before they landed on their current product. And so it's very much like a willingness to move quickly. It's a bias towards action. It's not overthinking and dwelling and reflecting. It's very much like, go go go. Let's talk to as many customers as possible. Get market feedback. Don't build in a vacuum. And then build a prototype and then be willing to scrap it and, like, say, hey. This is not gonna work. Hit it quickly and then do it again. So I really look for that, especially at sea. Yeah. Well, we'll settle in to to follow along on that, thought process. I like to look at it as, like, are they mentally flexible enough, to make the hard decision when presented with new information? I think that's getting at a similar thing of Kyle, what you're talking about at the series b. Do they have that mental humility? Are they able to delegate? Are they able to build a team? Are they able to motivate? Do they have the leadership? I I really like to simplify it into three IQ or three buckets, IQ, EQ, and experience. I think the again, one of the old adages of, like, past performance is the greatest indicator of future success or future performance. And so I really like to look at, do they have a demonstrated history of outlier success? It doesn't just have to be founding companies or having previous exits. We we do invest. I have invest in first time founders all the time. But then you need to look at their history. What have they done in their lives? Have they shown, that that they can have outside success? Do they have grit? Do they have determination? Have they shown resiliency in their life? What have they what have they overcome? What challenges? What what failures have they had? And then what did they learn from that failures, and and how do they bounce back from that? Another thing that we look at around the experience is, have they if they haven't had founding experience, have they had a hypergrowth experience? Have they seen what greatness looks like? Have they been around greatness? Have they have they felt that before? And then, yeah, in this specific founder market fit, definitely highly important, particularly in vertical software and vertical AI companies where I spend most of my time. And so what's the founder's domain experience? What's their unique insight? What's the reason that this company needs to exist? And then the the last one, yeah, like, are are they going to run through a wall to make this happen? Like, is it a part of their identity that this company is successful? Maybe not the the best for, a healthy balanced lifestyle, but I I don't think most founders and, truly the outlier success ones are living healthy balanced lives. And so, are they going to feel like if this fails, they're there for better or worse in in some ways? I I think that, insane will to win and and drive to to make their dent, yeah, in the universe and and will whatever they're going after into action is super important. And then the last thing on on the IQ, yeah, I ditto all around on how fast their learners, can they learn? Do they pick things up quickly? Do they move quickly? That translates into many other parts of the business as well. And I think jumping in here, we've been talking about founders and founding team quite a bit, but I would say we have a very maniacal focus on specifically the CEO and does that person demonstrate all of these qualities. Unfortunately, a great COO, CTO doesn't make or break a company. The CEO does. And so spending all your time with that person and evaluating them on all these metrics, like, deeply like, they're very deeply unbalanced people to Nick's point. I think one of the mistakes I made coming into this business was I worked at Microsoft before investing, and I was like, oh, I see Satya and what he looks like today. But, actually, you want to try to imagine them twenty years ago when they were young and hungry and what that might have looked like. And so a lot of you are at startups, and you got to see kind of that early persona for a CEO. You get to see what works and what doesn't, so drive from that. And, also, going back to, like, how do you source opportunities? If you know someone is just a killer, a 10 x engineer, etcetera, internally, I think that can be a great proprietary signal for you as well when you make your first checks and stock ranking that person against other folks that you've also worked with in the past. Great point. And we have an excellent question from Paul in the chat, and I'll let anyone handle it. But how much diligence do you find that angels are typically able to do in the investment process? Because it's always that balance of getting the right information to make your decision, but also working with the founder's timeline. Yeah. I'll I'll hop in on onto this one and, talk about a a point of one of the maybe the lessons learned or what I wish I would have known coming into to angel investing. I think this goes into what flavor a bit of angel investing. We haven't talked about this a a ton yet of if you're investing directly into the company on the cap table yourself or if you're investing through an SPV through some of the syndicates like we talked about, at the top of the hour, through AngelList and and others. When investing through an SPV, you're essentially outsourcing a lot of that diligence to the fund or the angel or the syndicate, that has done the research and you're trusting that they've vetted the founder in some way. And so you're able to look over the information, understand the market, but you're probably not meeting the founder. And so you're outsourcing a little bit of that that diligence. I think, if you're investing directly on the cap table, yeah, you're probably not going to be able to have three hour long meetings with the founder in any sense of the way. And so similar to, like, interviewing, an executive or a leader at your company, how can you gather as much information around that IQ, EQ, and experience or whatever your diligence framework looks like in that first meeting and really focusing on that and then getting the information that you need requested from the founder, whether that's a deck and or, like, data room, not putting a burden on them, asking for additional information out of anything that they don't already have created. And then it's really on you to to be able to judge and make that judgment on the founder and their character through smaller interactions, small promises. I love Kyle's, approach of giving a book or giving an article to read and then coming back to them. And and whether they're proactively coming back to you, it's like, oh my gosh. Thank you for giving me that book Play Bigger. Like, it completely changes the trajectory of our company. We're gonna create a category around x y z now and yada yada. Like, that's a lot different than making like, referencing something on that first call and never hearing back or even worse if you reach back out and ask if that was, helpful or not and they and you kinda hear crickets. And so, if you can design your process to make those tests, or ways that you're checking on your diligence checklist without taking a bunch of time would be the the recommendation. But then it's really on you to go do your research on once you get comfortable with the founder founder founder market traction product from there. Helene, do you wanna go next? I would just say it's probably one meeting, honestly. Like, you don't get that much time with the founder, but I think that's why it's important to, one, just, like, meet a bunch of founders so that you calibrate what greatness looks like. And then two, just, like, knowing the spaces that you're investing in and just, like, having a prepared mind. A lot of you, you know, are operating. You have that advantage that you see a lot of tooling in your day jobs. So you could start out by investing in go to market tooling, for example, to just, like, get your feet wet in the industry. You can be a design partner for a lot of startups and, like, build your reputation and brand that way. But I do think, like, it takes time to kind of calibrate. I haven't found diligence to be helpful, funnily enough. Like, I used to when I was at Shopify and I had a lot more time on my hands than I do today, I used to, like, research the market and look at the competitors and, like, really be and ask for all the data and read the decks and look at like, we used to really, like, look into things, in a lot more depth, and I just don't have I don't have the bandwidth to do it. And, so I'm and I I find that I the the amount of diligence I did on deals didn't actually help me in the end. Like, you look at the I I make these notes to myself about, like, what I liked about something or what I thought the concerns were, and then I'll go back to it. I I did this, recently. I was reading Pattern Breakers by Mike Maples, which everybody on this call should read. It's, like, one of my favorite books about early stage investing. And so I went I was reading this book, so I went back to some of these notes that were just, like, in a Google Doc. And I was like, none of this would made any sense. Like, none of my notes have anything to do with where the company is today. It was it was just like it was, just like random intellectual exercise. If if you're writing precede and seed checks, it's just the founder. Like, it you know, like, does this founder fit this model? And for me, because I mostly do advisory, I don't I if it's about cutting a check, I'll bring it to GTM Fund. But if it's advisory, it's somebody usually trying to coax me into doing it. I'll do a couple calls with them. I'll say, hey. Look. Like, you know, let's do a couple I don't wanna ask you for equity until you're super confident that you wanna work with me. So let's just do a couple calls, like, no strings attached at all, and we'll see if this is, this is a fit. And I'll know in two or three calls, how they fit into that model. Are they applying the stuff I've mentioned to them? Are they figuring it out quickly? Are they asking, like, really insightful second and third layer questions? I'll I'll understand their level of psychopathic drive by that point. And, then I'll be able to make a decision. But, like, I'm only taking on maybe four at a time. And, like, as as companies, as my year with them expires, then I might take on another one, but but my volume is very low. So my my my style of evaluation and decision making can be different than like if Nick's writing checks as a as a living, or if you're an if you're if you're trying to be, like, a full time fractional advisor consultant. But for me, it's it was really funny to read these notes and, like, see how far how different things were, like, two years later where the company was, compared to, like, things I thought were important. So I'm not like a I'm not gonna do much diligence on stuff anymore. I'm gonna follow smart. I'm gonna follow smart leads. I'm gonna try to follow smart investors, and I'm gonna try to, like, vet the I'm gonna try to vet the founder against my framework and, like, leave the diligence to others, I think. That might not be the right way to do it, but it's it's what I have capacity to do. Super helpful. And it's interesting because you've got the notes to actually look back on. Sorry, Eileen. Go ahead. Oh, no. I'm I was just saying, like, I think over time, you develop investment judgment and you kind of hone your gut instinct on founders. But the only way to do that is just to get started meeting people. You don't have to cut checks yet, but I would just, like, get the process started as soon as possible, sooner than later. That's such good advice. Just start taking meetings. And and you don't need to cut a check, but, like, take notes to yourself whether or not you thought that was, good and for what reasons so that you can go back to them. Because to build, like, Scott at one point, I made an intro and he's like, man. He's like, you have really sharp founder radar. Has anybody said that to you? And I hadn't really given it any thought, but it's just it's just doing enough repetitions of meeting founders, participating in accelerators. Like, try to find big groups of founders. Go volunteer. There's accelerators in all of our cities that are desperate for, like, competent go to market help or competent product help. Just, like, message people who run those things and be like, hey. If you want some help with, if you want some help with, like, go to market advisory or mentoring, like, sign me up and you can meet, you know, 20 founders in a in a in, like, a one day period. You just need to get that exposure. Like Elaine Elaine has it right there. That's a really good point. And Elaine, I'll double click on yourself because Julianna's got a really great question in the chat here. Love to just hear more about your decision process to move from industry into a full time investor role. What was the pull and drive to do so? Great question. I think it goes back to I guess, like, when I was in college, I really thought I wanted to be a hedge fund analyst. So I thought I was gonna be a career investor and then just felt a lot of imposter syndrome candidly. I was on calls with CEOs and CFOs of public companies asking them about why their gross margin wasn't expanding. And I was like, I've never worked at a company before. This is ridiculous. And so that's what prompted me to go work at Microsoft. I wanted to see what it was actually like to operate. Candidly, Microsoft is too big of a company. I got bored, and so I really missed investing and then fell into venture by going to a lot of accelerators, like Kyle said, in the area, just, like, really enjoying it. So I joined Microsoft's venture arm for a little bit, got headhunted to my law firm, Norwest, where I was for five years, and then joined all, seven months ago to help build a new firm. So that's kind of how I fell into this role. Super interesting. And I know we've got about ten minutes left. So if there are any additional questions, please do pop them in the chat. We'll do our best to answer them all. But Nick, Kyle, Elaine, what was one piece of advice that you wish you had going into angel investing or taking your next step in furthering your angel investing? Like, what advice would you give other folks that maybe you weren't providing? I'll I'll kick it off. I I think it's, a buffet or a monger, mongerism, like, stay within your zone of competence, and know know where you have focus. I think Elaine mentioned this earlier with, like, go to market tools around go to market executives. I I think going into this, when I joined all of those angel syndicates, I and seeing 70% of the deals, like, the deals are all over the place. And it's really hard to become an expert in anything if you're investing in different theses, different stages, different types of deals. Yeah. And so what I wish I would have learned back then is I was really all over the place when I started. Now it helps me understand what not to get into and where my focus and competency aren't, but I think that could have happened a lot easier without the trial and error. If, somebody had just told me, like, pick your focus, pick a thesis upfront, pick a stage that you wanna invest at, and then stay pretty disciplined to that. I mean, that is kind of the fun of angel investing to a degree is it's a a little bit random in some sense, but I think if you're going to do this in any sort of deliberate fashion and not random of just what opportunities kinda fall into your lap and what you're gonna do, then I think you should have some sort of focus and clearly defined view on the types of deals that you wanna do, the founders that are interesting to you, the stage that you wanna invest in. Are you trying to go extremely early to idea stage and making founder bets? Or, are you a little more interested in maybe the series a or the series b or there are a couple more metrics, there's more traction. You can evaluate, the growth rates and look at some other things outside of just, is this founder the right founder market fit to go after this market? And so yeah. Looking back, I think I probably could've saved some time, by honing on a specific stage and thesis and type of deal that I was looking for rather than being pretty random and just seeing anything that would cross my desk. It's really good advice. You'll make much better investment decisions if you're staying close to your zone of genius. Like, I've been in vertical SaaS slash ecom digital marketing now for, six years, I can pick I can pick those deals way better than I could possibly think I can make a decision on a deep tech investment. I just don't even go anywhere close to stuff I don't know about. I think that's that's good advice. I already said, like, don't do it to make money. Do it because you, like, you actually wanna be helpful and you wanna stay engaged in early stage. And also, like, know where you can be the most helpful because you'll get into the best deals there. So this is sort of the inverse of what Nick is talking about. Like, you'll be able to pick good deals if you invest where you have expertise, but also you'll you'll get into way better deals. Like, no deep tech founder needs me on their cap table. I'm useless to them. So I'm the only deep tech founder that would let me invest is if they're, like, desperate for somebody to have a, you know, an extra 10 k. That's that's a loser of a deal. But if you are in, like, SMB vertical SaaS selling to blue collar, you're building a motion similar to mine, you'd the the the those founders will be a lot more eager to have me in. Therefore, I'll be able to get into better higher quality deals. So I would say, like, I'm just repeating Nick, but giving you the inverse, I think that's really good insight from him. Right. And I'd add, there's just no right way. There's no one way to do angel investing. Everyone does a different flavor of it. So kind of take your time. Be very real with yourself. It's it's both a time investment and a financial investment. So just be real. Like, how much time do you wanna spend on this? How many dollars do you wanna allocate to this a year? Have the conversation with your family or partner as well. Be like, hey. Like, if I invest 50 k and all goes to shit, are we okay with that? So just, like, being very upfront with yourself, and then just have fun. Like, I think it's a really fun thing to do and enjoy it. It shouldn't be a chore. Good advice. Great advice. And take notes. Do take notes. It's the best way to learn. Like, so you can go back 12 when the company's done two pivots and and look at the notes that you took yourself about that deal. You'll learn that we're horrible at evaluating early stage investments, but Mike Maples will explain why you maybe maybe made a good decision even though everything about the financial profile and the market possibilities were irrelevant at the time. And, like, I also share that book. Go for it, Elaine. Like, you will lose money. Like, there is not a single person who invests in seed and pre seed who hasn't lost money. So I would just go into it with that mindset. Like, take risks and be comfortable with, like, the decision making, but update it, as you continue. Really good point. And a bit of a last question here. Kyle, I'm gonna direct this to you because Hattie's got a great question around how operators with we're not accredited investors can become LPs and fund. And it is challenged without that accreditation, but a really good starting place would be doing more advisory work. So Valhara's got a great question, which is, what are the differences between advisory and angel investing, and how do you actively get involved in either side? Like, is it a similar process, or do you treat them differently, Kyle? I think it's pretty similar. Like, I'm not cutting a big enough check to for it to matter in somebody's round. The only reason they're letting me cut that check is they want me on the cap table to be helpful, and that's sort of the same as advisory. And I think as my profile has gotten bigger, I don't really need to cut a check anymore to get the equity. I can just offer my time. And so I see them sort of interchangeably. You could you can you can do a lot more angel than you could do advisory because you might be spending an hour an hour a month with all of the people you're doing advisory for. That's why I count mine at, like, four so that it's, like, a pretty minimal time investment. But if I wanted to have 20 advisory, engagements, I could, but now that's gonna impinge on my work life. So I would say angel, it's a it's a much lower time commitment. Advisory, you have to be ready to commit to, like, actually being pretty pretty freaking helpful and putting in some hours. And so I would be a lot more discerning about where you do advisory, you know, as you've built momentum. At the beginning, just take whatever advisory you can get because that's how you get the repetitions. That's how you build your your, your reputation with founders. But over time, you gotta get pretty discerning with, advisory because you could be doing a whole bunch of work and all of these could go to zero. So I actually look at them pretty similarly. I don't know if curious to on Nick and Elaine's take if that's how they see it. Yeah. I I think it's well said. No. Nothing nothing more to add there, Kyle. Like, be be discerning. Your time is your most scarce resource. You can write a bunch of checks. You can't create a bunch of time out of thin air. So yeah. Agreed. Wonderful. Well, we'll give everyone back about a minute and a half before the hour. Thank you everyone for joining. Thank you, Kyle, Elaine, and Nick. This has been fantastic, super insightful. And, we will be circulating in a post event email just a quick survey, two questions to see if this type of information is helpful, if you'd like more of it so that we can continuously better serve content for yourselves. So thank you, everyone, for joining. Have a great rest of the day. Thanks, everybody. Yeah. Thanks, everyone.