My Investing Days Might Be Over
At the peak of my angel investing days, I was doing from 10-12 deals a year; in 2014 and 2015, I did 24 deals each year. I was in the thick of things. I loved it. But then I started not to like it so much. Perhaps I became jaded. I intimately saw and invested in over 130 companies for more than a decade. I knew the cadence, the frustrations, the ups, the downs, and everything in between. I could write a serious tome.
In the last few years, I have done maybe one or two a year. I still am involved in many companies and talk to many founders I have invested in. They are one of the best parts. The energy, drive, tenacity, competitive edge, and curiosity have always sung to me. I appreciate it. Most of these people are unhirable, and quite frankly, so am I. I applaud that.
Why did I stop? I have had multiple careers, and I actually believed that this one would last forever. Wrong. I threw myself into investing. I treated our personal cash like a fund, managing the portfolio and involving myself in each founder’s business, particularly from the start. At one point, you hope the institutional investors rise and put in cash and their expertise. That they embrace the companies with all their power and founders as I did, but unfortunately, too many of them did not.
When I entered the start-up world, it was 1999 with an investment in UPOC. One of my closest friends was the founder. It was an eye-opening experience, and of course, as always, I was extremely founder-friendly. As I started to blog, I heard from many female founders who were not given the respect and capital they deserved. I committed to begin investing in females, Blacks, Latinos, and quirky men. The excellent news is that others have jumped into this boat.
I kicked off my thesis after investing in Curbed Media in 2007. There was also a financial component to that thesis, 1% of the company, and a side letter that I have every right to participate in each round in the future with my pro-rata right. The valuations at that time were no bigger than $5m at the post-money as they should be unless there is already a real business there or a second-time founder. I was the side letter Queen and everyone began to adopt the concept.
Valuations have become out of control. VCs began investing in every single sector. It makes sense because technology, health, how we eat, next-generation consumers, etc., have changed everything. Yet to value a company that sells mattresses like a software company makes zero sense to me. The amount of money just tossed around and lost without care is mind-boggling. There are products that I purchased knowing full well that some VC paid for them. Actually, some LP paid for it. I didn’t get it. At the end of the day, nobody has to look any farther than the publicly traded companies to understand correct valuations. Correct valuations allow everyone to grow and hopefully prosper. It stopped happening. Companies being valued at $30M getting out of YCombinator are not for angel investors. The expectation with these valuations also creates an environment of crash and burn that is not pretty. No wonder mental health issues are on the rise.
The capital I injected into the start-up world has already shown us great returns, and they are only getting better. That makes me feel good. I made many right bets on many people, and most of the time, I was the first investor in the business.
I adore so many of the people I have met on this journey. It isn’t like I am going anywhere because I am still paying attention to what’s happening, but I won’t be participating very much in angel investing anymore. I am moving on to another career where I build something for myself with our own capital. I am actually working on two things right now, one is a business, and the other is film-oriented. We have and continue to do real estate, but these are separate. I am excited and perhaps age or my experiences, I am being patient, slowly building, and approaching a business differently.
I won’t stop blogging, so eventually, I will share these journeys, but I am not ready yet. Again I am meeting incredible people and feeding my curiosity about other businesses. I am also taking time to breathe, be more connected to close friends and family, and be present in the moment.