Course, Conference Presentation, Fireside Chat, Panel
Ron Conway - Startup Investor School Day 4
- Angel investing carries a high failure rate, with predictions that 40% to 60% of portfolio companies will fail entirely and an expected initial failure rate for new angel investors exceeding 50%, where many investments result in a total loss of capital.
- Success in angel investing relies on winners generating returns large enough to offset losses, necessitating a strategy of spreading investments across approximately 10 companies rather than concentrating on three per year to manage risk.
- Investment criteria prioritize founders driven by metrics and user experience rather than those who merely claim ambition, while warning that procrastinating founders cannot build large companies and that founders attempting to "try every trick" require determination.
- Co-founder conflicts are identified as highly unpredictable risks, and investors are cautioned against assuming operational control, as running a company likely leads to poor performance due to insufficient time investment.
- Y Combinator is positioned as significantly superior to other accelerators due to its screening process and advice, though uncertainty remains regarding potential tweaks to the SAFE instrument, with a fear that unintended consequences could worsen the current landscape.
- Long-term industry outlooks predict the continued dominance of the internet software sector, the persistence of angel investing, and the integration of ICOs into decision-making, while equity is not expected to evaporate in the near future.
- Market stability and future growth depend on ecosystem participants maintaining consistency, honesty, integrity, and transparency, with specific expectations for timely disclosure regarding pro rata rights and conversion price calculations.
- Student activism is anticipated to potentially drive significant societal changes, including the gun safety movement, with a specific call for participation in a March 24th demonstration to influence political leadership.
- Operational plans for the course include publishing a recommended reading list, finalizing a conversation with Ron subject to time constraints, and distributing 10 in-person invites from the Winter 2018 virtual guest list by the following week.
- Feedback mechanisms are established to gather suggestions for course improvement, with an expectation that positive fund performance following an early "hit" will satisfy investor expectations for profitability.