Ask HN: Who's angel investing? | Hacker News Reader

Ask HN: Who's angel investing?

17 pointsshafyy13 comments

I know this is not how it works, but the current status quo to find angel investors is broken.

Something someone said in the YC Startup Investor School [0] stuck with me (I'm paraphrasing): "If you're an angel investor and meeting founders, think of it as a job interview for the position of the investor. You're the interviewee.

The status quo to find angel investors is over networking. However, I think this is a huge market inefficiency. Continuing the analogy from before, something like Triple Byte for angel investors should exist. Wouldn't it make sense for angel investors to pay $100 or so a month to get super high-quality deals?

Wouldn't it make sense for founders to fill out a YC-style application on that platform and get matched with angel investors? (As a founder I can answer my own question, which is, yes, it would).

Do you know of any such platform out there that's not scam?

As a quicker solution, maybe something analogous to "Ask HN: Who's hiring" might also work?

Happy to hear your thoughts...

0: https://investor.startupschool.org/

There is a lot of noise in angel investing.

Remember, professional investors (like VC firms) have a full time staff handling due diligence, cold pitches etc. Angel investors on the other hand simply can't handle that kind of deal flow.

I also know several angels who use the current inefficiencies of the seed stage market as a 'test' for founders. Great founders will find a way to get that warm intro to you - because great founders just get things done.

I've heard that test argument before, and even larger firms like a16z say that. However, for me, that's more a strawman argument that tries to exploit the market inefficiencies. They already have all the connections and the brand, so making it harder for newer investors to get to quality deals is an advantage for them.

What they don't realize is that they are shooting themselves in the foot. They are missing out on new and unknown founders. Is there a reason to assume founder quality is not uniformly distributed? (among founders with and without a network?).

Furthermore, I think the test argument is just untrue. There are a lot of people who are good at networking but suck at building a company and do get investments just because of they happen to know X or Y. I know that the realm's currency is the people, and I know that people are super important (like, if you're building a company, it's all about the people), but networking shouldn't be part of this.

The networking argument just doesn't make sense from an economic perspective.

- "Ask HN: Who's hiring" might also work?

Sounds good. "ASK HN: Who's looking for investment" and you post with a sort of ASCII pitch deck.

It should be the other way around.

I agree, “Show HN” should work, maybe with some standard way of indicating that they’re interested in investors contacting them.

No, I meant that investors post about themselves, in what they're interested etc. and startups can contact them :-)

Haha woops, I think having the startups present themselves would be better because they have more relevant information and I think potentially having multiple investors looking at a startup at once would help create pressure for them to actually invest.

Is the deal flow a challenge for angel investors?

Isn't that what AngelList tried to do, a marketplace for Angels and Founders? I will suggest researching/sniffing around AngelList business to see what worked and what didn't work and what could be done differently to overcome challenges AngelList encountered.

I'm not an investor, but I would quality deal flow is definitely a challenge. The biggest challenge, probably.

AngelList sucks for finding angels. You can find people that are supposedly angel investors, but to me, it's not clear if they are legit and mostly there is no way to contact them. Even if there was, there is no filter for the angels to increase their deal flow quality.

I agree, if someone were to do this, they should look at what can be done better. Unfortunately, I don't care enough about this to do it. Currently :-)

Edit: Added part about AngelList

> I'm not an investor, but I would quality deal flow is definitely a challenge. The biggest challenge, probably.

You are not an investor and using such definite statements. Hmm... You might want to consider talking to angels about challenges.

With your criticism of AngelList and replies to other, you come across as someone who is looking from the viewpoint of a "founder" instead of "angel". Look critically at your positions and consider validating them.

You're correct and that's what I'm trying to do here :-)

And AngelList does suck from the viewpoint of a founder.

>Who's angel investing?

Me.

>Wouldn't it make sense for angel investors to pay $100 or so a month to get super high-quality deals?

I pay 20% of profits for 'super high-quality' by going through Angel.co syndicates and the like. That is MUCH higher than $100/mo and I gladly pay it.

Wow, great thanks for your insight. So, as an angel investor, what is something that you wished angel.co did for you (except of lower prices)?

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