F2F #73: Gaining credibility as a first-time Investor: Stop sending noise

Becoming an angel investor is not just about writing checks. In the startup circles, most people mistake credibility for visibility. You show up, you talk to founders, you forward deals to other investors, and you try to Be Helpful™ and Add Value™.

We all know the theory, but the execution is usually wrong. And I also executed it wrongly for a few years, so that's why I'm opening up here, so you can avoid this mistake, too.

This post is about one of the most common mistakes I made early on, why nobody told me it was a mistake, and how you can avoid losing time by learning it faster than I did.

The wrong way to be top of mind

I started investing in startups in 2015. I didn't think about becoming an angel investor, at the time. Little did I know I would end up investing in close to 40 companies in the subsequent years.

However, I wanted to learn from other investors and build a network. I wanted to interview them at Startup Grind and get invited to invest with them. I read a few books about angel investing - out of which I only recommend Angel, by Jason Calacanis - and one common piece of advice was "if you want to get closer to investors, send them deals".

My neurodivergent brain took that to heart and started sending a massive amount of deals to the investors I respected. I forwarded pretty much every single deck that landed on my inbox, maybe trying to prove that I had dealflow. I thought, "This could be interesting for someone in my network". So I sent it. Often without context. Often without filtering. Often knowing that I would never invest in the companies whose decks I was forwarding all over the place.

In actuality, I didn't mass-forward the deals to everyone. I did one thing right: I wrote a list - that I still keep to this day - of investors and their thesis. I used that to filter. But I'm writing about this a bit later on.

Most of those deals went nowhere. They did not fit the investors I sent them to for whatever reason: wrong team; company incorporated in fucksville, Nomansland; unclear value propositions, etc. However, I wouldn't know because nobody told me this explicitly.

No one ever told me "Àlex, cut the crap. Only send me deals you'd invest yourself in" or "I'd rather receive one good deal per month than 5 per week that are absolute garbage".

In my mind, I always had thought that I didn't wanna do the filtering because, after all, I wasn't a professional investor and I didn't know much about this game. Also, to be honest, I thought that they would use their army of interns and associates to do the filtering for them. After all, it's their fucking job, not mine.

And that is the dangerous part. Investors are polite and cautious: they never say no. They always tell startups they decline "not now" or "not yet" but never a hard no.

They will ignore bad deals quietly. They will not tell you "please stop sending me this". You do not lose respect overnight: you just do not gain it. Or worse: you can become the "sends anything guy".

Being top of mind by sending noise does not work. Don't do it.

The lesson nobody gave me

It took me a long time to realise that forwarding deals is a signal of the quality of your dealflow. Once I understood that, my behaviour changed completely.

Today, I only forward deals that fall into one of these categories:

• I have already invested.
• I am about to invest.
• I cannot invest due to a hard constraint, but I would otherwise (conflict of interest, lack of liquidity, friend/family in the org, etc).

If I would not put my own money into the deal, I do not forward it. I know it's probably biased thinking, because now I have so much dealflow I can afford to do it, whereas 10 years ago, I couldn't, but I would've appreciated receiving this kind of feedback and directions.

That single filter dramatically improved the quality of my interactions with other investors and helped me step up in klout.

Treat investors like a portfolio, not a mailing list

Another mistake I see often is treating investors as a generic group. Some people build mailing lists. I, in fact, read A year (and a bit) of sharing dealflow by Eamonn Carey and wanted to replicate it myself.

Wrong.

If you want to be useful, you need to know who does what. Treating them all the same is and will always be a mistake. Investors have got big egos. They want warm intros, thoughtful emails and stuff like that. Luis Cabiedes told me that early on, so I built a list.

I have an Apple Notes with over 50 angel investors and VC funds with the following criteria:

• Typical check size
• Stages they invest in
• Sectors they like
• Sectors they explicitly avoid
• Follow-on policy
• Geography preferences

Sending a great deal to the wrong investor is still sending a bad deal. This list keeps me on track. Every time I want to forward a deal, I go through all the investors in my list and send personalised emails to all of them.

Bonus: Ask for advice, not money

One of the best ways to build real relationships with investors is to ask them for advice when you do not need money. The old adage says "ask someone for advice, he might give you money. Ask him for money, he will give you advice".

Investors have got their barriers up constantly because everyone wants their money or their dealflow. If you approach them for something else, they will gladly lower them.

I got closer to lots of top-tier investors by asking them genuine questions, very specific ones, I needed for myself.

Examples that worked well for me:

• "What is your framework for deciding whether something is a conflict of interest?"
• "What do you do if a portfolio company wants you to do consulting/services for them".
• "How do you think about follow-ons when the company is doing fine but not exceptional?"
• "What do you do when a portfolio company pivots to something that another company in your portfolio is doing?"

These questions do two things: they let the investor be helpful, and they show you are actually doing the work and growing as an investor. They have an implicit demonstration of value.

I wish someone would've told me these things when I was starting out ten years ago. Hope I can help you avoid these mistakes!