Frustrations of early stage investing
I had a moment this past week. I got angry and frustrated at investors who seem to come together as a group. I only shared that with two people involved in this particular raise and then one who I have known forever who happened to be my next call. The most difficult part of early stage investing is raising capital. Certainly some companies get quick momentum and raise rounds quickly while others find it a real slog.
I have been at this for about 9 years. Everyone has their own thesis and sweet spots. Many (although early stage investors) have a hard time making leaps into the unknown but want to invest in companies that are using formulas that they have seen work in the past. I have found that there are few who like what I like or see what I see. As my father says, that is why they make vanilla ice cream. He prefers chocolate.
Many of the companies I invested in 4 years ago who slogged it through are now raising solid Series A from great investors. After each closing my conversations with the founders usually start the same way…remember when you couldn’t get anyone to believe in your vision and essentially believe in you.
Someone asked me why I get up and do this every day. What is it that makes you feel like you are doing something worthwhile. It is those founders who had different visions that nobody else saw but for some reason I did and was willing to throw our capital and my force behind it that have gone on to raise that big check and are growing significantly month after month. That is insanely rewarding.
With that comes the growth of economies and jobs which I really believe in. One of Fred’s first investments was in a Buffalo company. They grew to be the second largest employer in Buffalo at that time. Creating jobs is powerful.
I am over my temper tantrum but it part of the journey as an angel investor. Onward.
Comments (Archived):
I like how you vet out your frustration by writing it out. You didn’t name anyone but I’m sure they knew who you were talking about. +1.
perhaps…:)
@gothamgal:disqus @wmoug:disqus What i’ve learned (so far) about being a founder is that the only investors who matter are the investors who can get to a point of conviction on their own without anyone else’s opinion. That’s obviously why you both are ?
“I have found that there are few who like what I like or see what I see. As my father says, that is why they make vanilla ice cream. He prefers chocolate.”Ha! Know that feeling. Couldn’t agree more. It’s exhilarating to walk to the beat of your own drum.
More of the time it is exhilarating….sometimes not so much
Oh, I hear ya. More exciting, but also a lot more obstacles on the road less traveled… ;~)
100% agree with you. You really can’t say enough about the slog. It’s a good way to put it. Herding cats, whipping and driving-early rounds are very very difficult. Once the capital is raised, take a breath and then the realization hits that a company has to be built. As Fred so aptly put in his video with Dan Primack, “I gave you a check now I want a return.” Even though you don’t get a return when a seed company you believed in raises a Series A, Series B, Series C, it sure feels rewarding. Sort of like other people have seen the light. https://www.youtube.com/wat…
Building businesses and investing in them is a great way to live but it just ain’t easy.No work/life separation. Firedrills and momentum uptakes and dowsn.That’s the truth.I kinda love it.
obviously i love it too!
The “remember when nobody believed in or scoffed at your vision” is the WHY as a founder, we’re motivated to build the best team we can, and the best business that speaks for itself. And its investors like you who see that vision with us, and feel our pain who are valued.
🙂
Slog. Such an apt word for startup life.Finding your “flavor” seems to be the secret of great investing.I’m not an investor, but I do need to choose which founders to work with because in order to work successfully with startups — at least the way I do it — requires flexibility and even a certain amount of sacrifice. This gives me something to think about going forward.
slog is a great word.
slog, and flog, which for good reason is golf spelt backwards.you didn’t win, but you didn’t lose. there’s the positive.
“I have found that there are few who like what I like or see what I see.”it has to be that way.
I had a moment this past week. I got angry and frustrated at investors who seem to come together as a group. I only shared that with two people involved in this particular raise and then one who I have known forever who happened to be my next call. This was really confusing to me. Are you saying you were front runned?
No…I am saying that it was hard to bring others on as investors.
Love that you are fighting the good fight on our behalf! You are indeed a force, and your support is invaluable in concrete ways (intros/advice) and abstract ones (Joanne’s a freaking badass, so if she believes in me, I must be doing something right!) You da best, Ms. Wilson.
??
That’s what startups really need early on is to find an angel evangelist, but they are hard to find as things have to line up just right it seems. Must be so damn cool to back a young company and eventually see them raise a series A, generate some great growth and traction, hire people to impact many family’s and lives, make a positive contribution to society, and other positive outcomes. Congrats Gotham Gal, you are indeed a true angel to many entrepreneurs out there 🙂
Seeing that shift from first dollar to Series A is incredible
Have you and Fred ever been involved on a startup’s seed funding deal and then a Series A? I’m sure every tech entrepreneur would love to have you as an angel and then Fred as a VC, but that scenario is unlikely for many reasons.
Fred has not but USV has.
Sweet, that’s great! Have a wonderful weekend, thanks for engaging 🙂
My first read of your work and it is AWE!SOME! Your Founders are VERY lucky to have your understandings. As a Founder trying to raise this “seed” capital (that is not really a fair phrase anymore BTW…Seed = Series A…even Early Seed is more Series A) it is REALLY tough to get good and understanding Angels that want to see what you LOVE…the growth of a dream and jobs there within. They all want to act as if they are Angels but they really are focused on the IPO that they can say they found before anyone else. Instead of the 10 – 1200 jobs and inspirations they may have created. Good Founders are building for the dream and to get jobs for others not for an IPO or the $…thank you for your wisdom and awareness. I hope to meet you one day and would love to have you see our company on AngelList and give feedback…https://angel.co/451degrees
Thanks for this perspective. As a founder of an edtech startup it is certainly a slog but it’s exceptionally rewarding seeing students excel while knowing that we’re building a great business for ourselves and our investors. It all has to matter, and it absolutely does to us and our customers, so we need it to matter to our investors as well.The journey is never easy, but it is necessary.
The journey is definitely necessary and a part of the process