Last week, I was at the Angel Excelerator Conference organized by Hyde Park Angels in Chicago. There were several key note addresses by some really smart folks - Howard Tullman from Flashpoint Academy, Brad Feld from Foundry Ventures and Tech Stars, David Hornik from August Capital and discussion panels comprising Chicagoland VCs.
Image via CrunchBase
Obviously, a lot of insightful information to ponder over. One thing however stood out for me. There is significant difference in the investment approach by valley based investors versus others. Valley investors spend much of their focus on sniffing out and cultivating the coolest of ideas – key mantra for the angel being value add before and after the deal is done (more focus on financial, operations, network introduction and less on structure), while it seemed that most of local VCs/angels discussion was about structure, communication between investor and entrepreneur etc. I agree that all these areas are important, but it is more of a question of where does one focus to make the right investment and also make it work. For me, it was an easy decision on what I would want to do.
Another thing that I loved during the conference was the aphorisms being let loose. Aphorisms are very common in the venture community and says a lot about how people think. So instead of blogging about everything that everyone talked about, I have decided to share with the readers some aphorisms that I heard. So here goes..
- One needs to be irrational to become an entrepreneur.
- Some of the best entrepreneurs are bipolar and are on meds.
- Mentally kiss your money good bye, the day you write a check.
- Angel investing is like owning a boat. The two best days of a boat owner are the day they buy it and the day they sell it.
- Successful venture investing is about resolving conflict between the investor and entrepreneur.
- If you are one of those who does a long rectal due diligence on an investment, it is a sign that angel investment might not be for you.
- In venture investing, you have to compete and that means to value add.
- VCs are simple animals who like to scratch and sniff stuff.
- In the startup world, treat everyone like your best friend.
- Founders need to be shown empathy. You would find managers who would mortgage their house to get the business out of a hole.
- Venture investing is a fair amount of poker mixed with humanity.
- When entrepreneurs call you, then you have become effective as an investor.
- I would rather have a piece of a watermelon than a whole grape.
I liked the last one best. If you like to read more such aphorisms, I would recommend Maxims Morals & Metaphors – A Primer on Venture Capital by Scott Chou. It is a light read and is a lot of fun!
