Miles To Go.

Xin’s Thoughtful Gift: PBJ and Ramen 2

Being an entrepreneur is a lumpy business at best. And while I’ve written extensively about the mortality rate (95%), I’ve never written about how hard it is along the way for those 5% destined for greatness.

It ain’t easy, and it ain’t easy on everyone.

This is a basket of Ramen Noodles and Peanut Butter, presented on my Birthday by a very appropriate, thoughtful entrepreneur I backed; Xin Chung. Xin certainly has the moral authority to present the gift: he was liberated from Saigon as a child, spent time in an internment camp, and grew up in Valdez Alaska before settling in to SoCal and pursuing his dreams as an entrepreneur. He is now Founder and CEO of TrustCloud which has emerged from a “walk in the wilderness” with 10k passionate users and a growing number of interested clients in the social check space.

The Ramen and PBJ is our shorthand for being capital efficient, a must for start-ups.

My system at Vaux usually provides $250k of less for a team to develop a product that addresses a meaningful market problem, and do it within 90 days or so. This means most for the proceeds are dedicated to product. The next $250k usually goes to determining if anyone cares. The numbers vary, but either way the Founders and early employees do not get rich in salaries off of angel money. Frankly, they have to be prepared to barely eat, and when they do eat for strength. This is part of the ugly underbelly – and not a full underbelly! – of the dedication it takes to pursue your dreams. Every dollar you don’t waste can go to a better product or a better viral coefficient.

And of course, stuff takes longer than you expect. And costs more money than planned. This puts tons of pressure on the entrepreneurs as they debate the next crucial steps, often on an empty stomach. Probably once in my last 10 start-ups has a company got it right, right out of the box and kept doubling down all the way. Most try with a product, revamp, try again, tweak, and try again until there’s no track left. And it leads to some very difficult conversations about where to invest precious resources: make the product better and more people will come… or tell more people about the product and they will spread the word. Development vs. Marketing vs. Biz Dev. It often provokes difficult conversations, and sometimes desperate measures (these guys slept in a van on a Biz Dev road trip that lasted months).

And so the entrepreneurs themselves, while pursuing their dreams of autonomy, making a mark on the universe and yes winning riches, have to absorb the vagaries of what precious resources to assign where… including their own sustenance. I get queasy when I hear comparisons to the comp someone could make in the corporate world, which simply doesn’t apply in start-up-ville. And I get nauseous when I hear debates about how deep down the rabbit hole start-ups should go pursuing the next pivot (which is another term for fail and try again). Luckily  angels don’t have that much patience or that much capital for endless restarts. Which is why, when interviewing prospective partners I always look for that unique combination of resourcefulness, willingness and mental toughness that will see us through. And a dose of reality to know when to put a fork in it.

Entrepreneurship is not a straight line to the summit, it’s a jagged ascent and we have to be prepared for the whole ascent not just the sprint at the top.

~~

Save runway: TrustCloud’s sample T&E guidelines

Use personal credit card; expense every month with invoice. Avg trip: 2nts/3days, $800, $1000max

1. Air: economy $250

2. Ground:  $25/day

3. Lodging: Airbnb $50/nt

4. Entertainment: $75/day

5. Badges: pre-approved

6. Big dinners: pre-approved

Start Up Choate NYC

Ivan Taback and Proskauer hosted the final at bat of our Start Up // Choate Spring Road trip in their gorgeous space at 11 Times Square. It was a fitting finale to a great week which gathered over 100 Choaties from three cities to network, learn, and share experiences about starting and growing businesses.

The Panel was definitely skewed young and mobile, with Alex Moazed and NT Etuk joining me for the final night. We polled the crowd and we surprised to learn that there were 10 entrepreneurs, 6 angels, 8 service developers among the crowd that gathered. All said, I’d estimate 2/3 of the crowds in all three cities were involved one way or another with start-ups in their everyday lives.

Who knew.

As usual, the panel had some great nuggets to share. Here we some of my favorites from NYC: When we talked about forming an ideal team and looking for co-founders, NT Etuk said “Don’t look for a partner in the mirror” – meaning having opposing points of view when developing a product, a business, and an organization is key. When we discussed “what would be the plastics for tomorrow”, Alex Moazed was sure that mobile was the answer for how profoundly is has affected our lives just five years into the show. He also added the analogy of the toy business, which never got around to thinking like a tech company: result is that toys (plastics, plush, etc) are now $20B industry, and digital games are about $18B. Gotcha.

Here were some of my favorites from Boston and San Fran:

One of my favorite comments from Boston was Bain Capital’s Jeff Schwartz (P’16) was embrace your ignorance. It can be a valuable tool. Dream about how to solve problems. Live in the future, and build what is missing.

Jeffrey Mullen (Founder and CEO, Dynamics, Inc.) who is a legit freak of nature (lawyer, EE degree, patent holder, CEO, addicted gamer, nice guy) was around the question of singularity (will we live forever if we live to 2046, per Ray Kurzweil). “Sure, I checked it out- living forever is basically an engineering problem”. And you know, he’s the one person that I believe probably has.

Michael Holthouse former CEO of Paranet (sold to Sprint) added that the “plastics” of tomorrow may well be energy. How we make it, store it, and consume it will become vital to our future sustainability.

My favorite comment of the San Fran night from Seth Sternberg was on the makeup of founder teams: While he stressed the fact that Eng’s (his abbreviation) had to form the core of the product and it’s build, having a business guy that does the deals/money was also a healthy add. One point we all agreed on: avoid replicants. Having divergent points of view are key. Last point form the audience was this: consider how “geared” your co-founders are to start a business. It’s a long haul, with plenty of dips.

And, proud to say, Choate finally started to get its social groove on: the  LinkedIn group (now one of the school’s most active) has been full of good pointers, suggestions, and comments and a twitter feed (at this point twitter’s most inactive account , but getting better ) picked up steam in New York (this is a relative term- it’s a humble beginning. Check us out at #startupchoate

Soup to nuts, this whole thing came togehter in less than six weeks from the time Ron Fleury and Joe McAndrew posed the question: “what the hell do we do?”. And while Choate has been effusive in its praise and gracious with its thanks during this whole process (and tireless in its coordination), I attribute my contribution to nothing more than “doin’ what come naturally”. Hard as this may seem to some, it is really, truly all in a days work. Special praise also to our hosts at Connect Solutions in San Fran and Choate Hall (coincidence) in Boston. So now Choaties with start ups, who have a great network anyways, now have one on mobile, social and local to press the advantage.

Which is perhaps the greatest start up lesson of all: do what you love and your efforts can make a tremendous impact.

Panel at Choate Hall- great space!

Last week, when putting the final plans together for our Boston stop on the Start Up // Choate Roadshow, the bombs went off. And so we paused, briefly, to assess what it meant and what needed done.

The response that came back from our hosts and panelist pretty much sums up what make Boston unique, and what makes entrepreneurs special. While acknowledging the practicalities of navigating Boston after the bombing, the message came back loud and clear: events like this are what we do as start-ups and Americans. We’re undaunted builders of things. We cherish our freedom of thought, expression, and opportunity. It feels great, and we won’t quit. Let’s go.

And so, in a dense rainy night in Boston we had a great crowd of entrepreneurs on hand to listen to a great panel.

One of my favorite comments from Bain Capital’s Jeff Schwartz (P’16) was embrace your ignorance. It can be a valuable tool. Dream about how to solve problems. Live in the future, and build what is missing.

Jeffrey Mullen (Founder and CEO, Dynamics, Inc.) who is a legit freak of nature (lawyer, EE degree, patent holder, CEO, addicted gamer, nice guy) was around the question of singularity (will we live forever if we live to 2046, per Ray Kurzweil). “Sure, I checked it out- living forever is basically an engineering problem”. And you know, he’s the one person that I believe probably has.

Michael Holthouse former CEO of Paranet (sold to Sprint) added that the “plastics” of tomorrow may well be energy. How we make it, store it, and consume it will become vital to our future sustainability. 

So, I ‘ll remind those from Choate that are reading this (sorry, group closed otherwise)… We started a LinkedIn group (now one of the school’s most active) and a twitter feed (at this point twitter’s most inactive account , but getting better ) and planned a road show highlighting the best and brightest minds from the Choate universe of StartUps. We’ll do(ne) SanFran, Boston (last night), and New York (tonight).

So far,  while I think this will become a HUGE benefit for our alumni, it is actually our gift back to  Choate. It has long deserved a great start-up network. And for Choaties themselves, who have a great network anyways, this one is finally going on mobile, social and local to press the advantage.

Which seems entirely normal to me. Doesn’t it you?

Austin has a groove

I hadn’t been to Austin for SX for awhile, and the differences are palpable. Each of these observations deserve a post on their own (blog tonnage warning), but here’s the brief from the plane

1: These kids won’t lap their Parents, but they’re over it

UT Spring break notwithstanding, SXSW trends pretty young but not tragically hip. I’d call it self-sufficiently hip. Perhaps its a stack of student debts, lack of faith in future entitlements, or a crap job market but most everyone here lives and breathes self-reliance. Kinda reminds me of KFAC in some ways.

No, they likely won’t end up better off than their parents but they have founds ways- ingenious ways – to have a share in interesting events, luxuries and experiences. It is the walking personification of the asset light generation, a veritable ride-sharing, house sharing, tab splitting mobile-social-fueled existence. You can see it in the number of backpacks lugged around. The premium real estate around power outlets. The use of timely information to scout out clean bathrooms and taco trucks still serving food. Maybe this generation can’t get what everything they want, but they sure use information to get what they need.

2: Booze may work for inspiration: but Coffee is for Execution

Ok, close to SxCentral (Dirty 6th or perhaps Rainey) the parties roll on late into the night. Bold dreams do emanate from these spots, no doubt. But who will do them? No-one with a hang-over I assure you. Life is not a Reality show perversion of how things get done. The business still happens the next morning, by guys sipping coffee and probably not wearing skinny jeans . I noticed on Don Dodge on twitter, who has backed his share of great SXSW start-ups, hits the parties for a few pics but probably doesn’t extend the night further… unless the band is good. He’s one worth following.

3: Mobile Social Local drives peer actions

Even Steve Case does sharing

And how. In this urbania of the future, I can’t remember anyone who didn’t whip out a smartphone every 90 seconds. Pedi-cab drivers checking directions. SXSW’s checking in on panels, flash mobs, and open bathrooms. Cops, using video. Really no surprise there. But when asked, how many of them pay for apps or subscribe to content the answer was rarely anything but “what?” (see #1 Above).

This of course, drives a few of the major theses of my activity: mobile, social and local will be supported by increasingly relevant and targeted ads. It would help if they were displayed in appealing, but unobtrusive ways but that’s on its way as well. While I was there, I saw a stat that online screen time had yielded to mobile screen time. Revenue isn’t that far behind. Mojiva is ideally positioned for both.

I also noticed that a huge focus of the Sharing Economy conversation (aka Asset Light, Collaborative Consumption, Peer to Peer Economy- talk about a naming clusterjam!) is all about Trust. How will Sharing grow if every transaction comes with the doubt and questioning that goes like this : I know I will make (save) money on this, but might I die doing it? News from the washington Post this weeks kinda underscores the point. Who is behind that screen? Can I just rely on the one network to provide that data (and are they conflicted b/c they want the transaction)? Isn’t there a repository of all the identity, behavior and transaction data that sits with a third-party and can quickly display a dossier on a potential counterparty? I had a back and forth with FAKEGRIMLOCK (yes, all caps please) about ways the Sharing Networks might be compelled to share their API toward this end (his suggestion was a ray-gun).  Leah Busque from Task Rabbit mentioned TrustCloud as an option in her panel on sharing- no ray-gun needed. She’s a nice lady and a great entrepreneur.

4. Space: the Everest of STEM

The biggest draw, by far, was the rockstar Elon Musk. And his expertise and passion for Science, Tech, Engineering and Math overfloweth. PayPal, ok. But this guy has Tesla and SpaceX rocking along while parenting five kids. The sheer out-of-this-world challenges this guy takes on, and the STEM talent he draws to do it should be an analog for our entire workforce. Learn STEM, and develop a passion for it. Pursue bold visions.

5. Being Top ten in the information race hardly matters

Just ask #11 in line at the taco truck at 3am. Not so long ago, information was valuable for a lot longer, long as your counterparty didn’t have it yet. Now, most information travels so fast and is so complete that is becoming commoditized. So what counts anymore? Speed, and creativity.

Sam Lessin had a brilliant talk on this BTW. And ironically but perhaps not un-related, his dear departed father Bob wrote a small treatise (Lessin’s Lessons) on what is essentially the asset light generation I discuss above. Great read if you can still find it- self published of course. Ahead of his time. Sam is a great continuation of his legacy.

If everyone has about the same information, at the same time the people who will extract the most value from it will be those that get it first, those that understand it first, and devise a creative angle to use it. It’s an interesting leveler of the playing field.

So that’s the quickie from SXSW. More to come on each of these. But my takeaway for the week is “Live in the future: build what’s missing”.

My Frequent disclaimer: I own equity in TrustCloud and Mojiva. 

Great name!

Yes, Marissa Mayer is out there honing her strategy for a next move, and lots of buzz is around Mobile Ad-Tech. I’m quite keen to those developments, because of my activity in the space… you might say.

But before her time, Yahoo made an offer that prompted one of the best “What Would you Do” conversations of our generation. I caught the gist of it at during Peter Thiel’s talk at SXSW, but Inc. does a better job of describing it here:

…Facebook was just two years old. It was a college site with roughly eight or nine million people on it. And, though it was making $30 million in revenue, it was not profitable. “And we received an acquisition offer from Yahoo for $1 billion,” Thiel said.   

“Both Briar and myself on balance thought we probably should take the money,” recalled Thiel. “But Zuckerberg started the meeting like, ‘This is kind of a formality, just a quick board meeting, it shouldn’t take more than 10 minutes. We’re obviously not going to sell here’.” 

At the time, Zuckerberg was 22 years old.

Thiel said he remembered saying, “We should probably talk about this. A billion dollars is a lot of money.” They hashed out the conversation. Thiel said he and Breyer pointed out: “You own 25 percent. There’s so much you could do with the money.”Thiel recalled Zuckerberg said, in a nutshell: “I don’t know what I could do with the money. I’d just start another social networking site. I kind of like the one I already have.”

Now for the What Would You Do part- a/k/a- WWYD.

If I were Mark Zuckerberg, I would have done the same. His talent is towering, his vision is far reaching. I would also say his youth might lead some to say he didn’t know what he didn’t know, but Zuckerberg probably did know. He had one great idea, and the likelihood of having another of such epic scale and impact was remote. He knew that lucky and good are not the same thing, and the former rarely strikes twice. He was, and is, part of an asset light generation that I have written about before.

But, I am not Mark Zuckerberg. Not even close.

I am not a sole founder (um, was Zuck?) and I would not imagine to be able to run something myself without the great work of those talented people around me. I might have other ideas I’d like to back, and more entrepreneurs I’d like to work with. I also deeply respect the stakes held by each of my shareholders, and would give due consideration to what they may want as well. Everyone has a number. And working for Yahoo, especially the new Yahoo, might be quite interesting. I may have hit the bid, not being Zuck.

But most of all, I love the fact that it was a ten minute Board meeting, or he thought it should be!

By the way, What would you do?

Gate is actually the basis of the Vaux Logo

Despite focusing most of my writing efforts on my blog, and keeping up with the world via my twitter the year-end letter to Vaux angels is a tradition well worth continuing. I’ve cribbed the best of it here…

 Discover. Develop. Deliver.

These three words are scrawled across everything I do for Vaux. They are three parts of my personal mission to success as entrepreneur and angel investor, which I had the honor of mapping out in a 2012 white paper for the Family Office Association  “Angel Investing for the Family Office” . I took a hard look at the process of building a foundation on the long journey from inception to exit, and nowadays I plan my week based on these categories. I color code each meeting in my outlook. They might as well be scrawled on my bathroom mirror in lipstick. They are the cycle of life for Vaux les Ventures and the angels that have supported these endeavors for nearly 10 years. Here’s what these simple words mean to me:

Discover is about being very focused on what you can do well, and what markets will have an impact that can generate angel returns. Big market trends that people don’t yet see, or are unwilling to accept. Trends that will obviously converge, but no one knows exactly when. It means being early and brave, but it also means being patient to find the right mix that can sustain the long march. This is where the DNA of the business is set: habits formed early are virtually impossible to break. Many people in the business call this “deal flow”, and I did too for a while but I soured on the term as too many IB ‘s and VC’s (both of which I have been) over-use it. Having a well know criteria for how to invest and who to invest with seems to do very well in attracting the right types of people. So does being a good guy. But it’s about discovery as much as it is about network. And that discovery includes markets and their real problems as well as solutions and the best team to build them.

A recent example of this would be my work on WellAware, the mobile health solution. I’m as committed as ever to the trend of mobile devices having profound affect on health and wellness. And I truly believe that very simple data can have tremendous impact on lives. The Wellaware team did a tremendous job developing the platform for this theory to play out, but certainly overshot the MVP standard. What we need in 2013 is more cycles with large user bases to refine our solution, likely in the mobile environment.

Develop is where the entrepreneur (in anyone!) takes over: translating a vision for a product solution into a product itself, and testing it with users to see if the darn thing works. It takes tremendous amounts of courage, persistence and luck. Some attempts are ridiculously off the mark. Ironically, more often there are overshots than undershots when going for the minimally viable product. And users are rarely the viral dream everyone hopes for- more like a block-by-block struggle to get to a vantage point where people notice you. But more than product and users, the team is the big part of the develop picture. Entrepreneurs have a passion for building things are not always Schwartkoffs when it comes to leading people. And that is where the coaching and mentoring foundation is laid. Capital begins to show up at this point, as we have baked enough of the risk out of the opportunity for larger sources of capital to begin to show interest. That too is a major challenge in this phase, and if you grow fast enough, it never ends.

[Major edits here from the angel letter. Sorry, that's not public.]

The poster child for the develop phase is certainly TrustCloud, which just 9 months ago had product solution in search of a problem, no user base, and a team that had already endured a few pivots. Such are the risks of being early! But the saving grace was each of the founders used the sharing economy and saw what it could deliver, as well as its limitations. Something had to give, we thought.

And 2012 was full of such breaks, as TrustCloud found its core team, delivered a product and began building users at an impressive clip  (10x from July to December) after the Wall Street Journal picked us up. Check out the product here, or the very impressive Facebook TrustCloud user group (which tracks bugs and promotes the product passionately). The Company rolls into the New Year with a new Peer Protect insurance product to couple with it’s ever growing number of sharing networks.  Kudos to the indefatigable and imminently coachable CEO Xin Chung, who details the year here:

 I shared keys to my NYC apartment on Airbnb, rides through San Francisco in a Sidecar, and my workload with TaskRabbits. I’m not alone– people worldwide are sharing more than ever with millions of room-nights booked, cars rented, and dogs walked by reputable strangers. The movement is called The Sharing Economy, Collaborative Consumption, or as Mary Meeker calls it, living Asset Light. (this is a great read! Don’t miss it!)

 Flush with VC funding, the movement scaled fast in 2012– but not without growing pains: A quick look at recent sharing history would give anyone pause before sharing with a stranger. Home sharing market leader Airbnb had a redux of its 2011 EJ incident with the so-called airbed & brothel snafu where a Swedish apartment was literally pimped-out. Carsharing had it’s own collisions with the luxury carsharing service HiGear shutting down due to thefts, car sharer RelayRides’ liability issues with a fatality crash, and regulatory fines for on-demand ride-sharers.

 These events highlighted that trust between strangers in peer-to-peer marketplaces must keep pace with their own rapid growth. In the offline world, hotels have long adopted star ratings, rental cars are licensed and insured by brands spend billions to give consumers confidence to buy. Since online, peer to-peer marketplaces powered by micro-entrepreneurs don’t have time to brand themselves or vet strangers, they are much less efficient as buyers and sellers waste time sizing each other up, figuring out a schedule and even haggling over price before committing. Trust can make these transactions much faster, and insuring the risk is something we look forward to. Read more at TrustCloud’s Blog.

Deliver is where all the hard work pays off. That would seem like a triumphant moment, and I’ll allow myself a few. But as I have matured it has become a little more bittersweet. Here are companies we have built from scratch, communities that started with a handful of people, angel capital that came in for under $1M pre money. And despite some intermittent liquidity opportunities, in some cases these companies have futures that remain bright(er). We have seen large that we turned down; we may see 2x-3x-4x from here (or of course, we may not). So parting with some or all of the ownership isn’t as easy as “see ya later”. It’s an asset, with a value that has to be managed detachment that is at arms’ length, hard as that may be. We also live in a world of high risk, so those precious few windows of liquidity opportunity have to be considered when they are open.

[More major edits here from the angel letter. Sorry, that's not public.]

In summary, I guess I feel every venture I have been involved with has contributed to the next. Things I have learned about the Discover phase have allowed for better Develop results. Those few short peeks at liquidity in Deliver have been viewed with a paradigm that allows the whole group to consider individualized risk and reward before deciding on liquidity. And of course, the success through the process has allowed us the opportunity to feed the beast, return to what we do best, and further diversify with another opportunity.

I am extremely grateful for the opportunity to work in the field that I do, side by side with talented entrepreneurs, backed by caring and value adding angels that ask good questions and have the patience to help realize the vision I had almost ten years ago. We’ll see great opportunities in each of the three key Phases in 2013. Drop me a line and we’ll discuss which ones best fit your criteria in the days ahead.

All my best in the New Year,

I am asked a lot about my investment criteria, but lately many of the questions have focussed on my criteria in the sharing economy. This is pretty amazing, because less than a year ago, I could not have told anyone what the sharing economy was.

Now sharing is something I do love, as I abhor waste and adore ways to get more out of any asset. Ask my wife.

In the past year, a movement has surfaced that is global (big) , reflective of our economic state (sucks), green (uses our planets assets more effectively), driven by a connected group (mobile powered millennial), and highly disruptive to a bunch of  old models of doing business. It is alternatively called the Sharing Economy and Collaborative Consumption, depending on who you ask. I like the former because I have a hard time spelling the latter, but either will do.

But overall, there are big and sustainable trendwaves. The kind that I like to ride. (Disclaimer: my favorite investment in sharing so far is TrustCloud, probably). So, within the Sharing economy, this is how I break down the key ingredients to my angel investing options:

Networks or Platforms: Many winners, or winner takes all. This is emerging as a very big theme for me, and depends on what stage one enters the market development. I believe every new trend breaks into two types of opportunities; networks within a trend become a story of many winners. For reference, look at the online ad nets, with plenty of $100M+ businesses. Look as well at the mobile ad-tech business, and the several winners to date in the networks (Millennial Media’s monster IPO, and sales by Admob, Quattro, even Amobee). Now look at the platforms that sold picks and shovels in ad-tech: Atlas ($6B), DoubleClick ($14B or $3B, depending on who’s counting) and the incumbent adserver in mobile (another Vaux investment, I wrote about here).

The point is, the networks are great businesses that scale quickly and become an exercise in good sales and marketing systems. The barriers to entry are low, and scale counts. But margins erode at the top end of the scale, because they rarely have a technology platform underneath. I’ve seen it before, trust me.

On Leadership: Bold enough to be early, seasoned enough to run a fortress. In an age of SUPER angels, I am anything but. I don’t have the braincells or the checkbook to attempt 500 startups, the coding passion of prgrammer king FAKEGRIMLOCK, or the patience to do the TechStars or Foundry stuff. But I have the courage to be early and the capital to be patient. So when we latch onto an idea we like, I can land on a beach with a team of Startups SEALS, secure a niche and talk my way inside the castle walls before claiming the fortress to support a large organization. Teams of five are fun, teams of five hundred are awesome. I’ve led both. As such, passive roles and stakes just don’t excite me. Frankly, they distract me.

Karma: Makes me feel good, as in “I did that!” To be frank, I think the best monuments in the world are contained in the Emerson Poem “If” (that my father recited at my wedding, amazingly). To have made the world a better place, even in subtle ways, is sure gratifying. To point to a logo, an event, or even a business process and say “I helped to build that” is really special. Sharing makes me feel that way. Up top now, anyways

Lean: develop a product for $250, acquire users for $250. Scale with real capital. These days, I gravitate to digital media because it doesn’t cost much to develop a product that solves a need. (and almost all the proceeds are for just that- product). Then, a little more to ramp users, again within angel range. But sooner or later, most digital media companies will need big capital to scale, which is where access to VC (where I have again been blessed) is key.

Partners: Coachable entrepreneurs. I’ve said it before, and each day it gets more relevant: life is short, and I have long ago given up having to work with buttheads (knowingly). While most of the entrepreneurs I work with are younger, they all possess a common thread and that is the thirst to learn and the courage to recognize and work on their mistakes. It helps not that I am the most direct guy around, so the chances for setting people back is always there. But I speak the truth, and I always speak the same in front of people as I do behind them.

Of course, there are many more criteria for selecting a sharing business, but these are some that ring true. I will be discussing them with a panel next month at the Shared Squared event, and I’m sure there will be more added to it.

Oh, one more reason I like sharing: my mother always said it was kind.

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The Social Network is a hell of a movie, but the real people upon whom the characters were based have stated that the film’s version of the founding and growth of Facebook was overly dramatized. And appeared way more fun than it actually was.

Face it, entrepreneurship is hard. Angel investing is doubly hard. While we read about spectacular successes, one can hardly keep up with the many outright failures preceding them. The thin veil  can really only be perceived once you are on the right side of it-it’s practically see through! But if you are on the wrong side, the thin veil might as well be a brick wall.

Someone once said the two best traits an angel investor can possess are a strong stomach and a sense of humor. The strong stomach will tolerate its share of quick deaths from being too early, too late, poor execution or leadership, lack of funds, or just tons of competition. The sense of humor will come into play when you attempt to tell your God which element of your portfolio is going to be The Big One. God will invariably laugh and throw at least one thunderbolt, wreaking havoc with your “sure thing” — but turning your also-ran into a winner. (No kidding, it’s happened. But to protect the innocent, we won’t name those we feel were luckier than they were skilled.)

Other sources of angel heartburn include those frustrating periods of illiquidity…the fast pace of technology which upends business models and proprietary positions quicker than at any time in history… the global markets bringing competition to one’s door on a massive scale… the high valuations of exposed deals,…the lack of influence when part of a syndicate…the competition with other angels (and now, VC’s). The list goes on.

The angel game can be summed up in the words of the “advert” placed by explorer Ernest Shackleton (1874-1922) ahead of his Antarctic expeditions (none of them successful, by the way):

“MEN WANTED FOR HAZARDOUS JOURNEY.

SMALL WAGES, BITTER COLD, LONG MONTHS OF COMPLETE DARKNESS.

CONSTANT DANGER, SAFE RETURN DOUBTFUL.

HONOR AND RECOGNITION IN CASE OF SUCCESS.”

And yet, we do it.