Podcast Highlights: Angel investing pro tips
Welcome to the 137th edition of the eXponential Finance Podcast. Whether you listen to us for the first time, or are a regular, we appreciate your spending time with us.
Jed Ng is the Founder of Angel School. As a Tech Operator, he built the world’s largest API Marketplace with an a16z-backed startup.
Jed began investing in startups in 2016. Like most angels, he staked his own capital. Despite having never worked in VC, he got his first exit in 2018. Jed has also backed 2 seed-stage startups that became Unicorns ($1BN+ valuation).
People started asking “what are you investing in next?”, so he began sharing his deals with other investors. Since 2020, Jed’s investor network has grown to 1,300+ organically. The Angel School syndicate also wrote a USD 1m check into a startup.
Jed fundamentally believes venture investing is a learnable skill. As a self-taught angel, he has experienced how daunting and lonely it is.
This episode is available on Spotify, Apple Podcasts, YouTube, Amazon Music, Google Podcasts, and many other major platforms through our Spotify for Podcasters page.
The following is a summary of the discussion produced with Claude.
The podcast is titled “Angel Investing Pro Tips” and features Jed Ng, a self-taught angel investor and venture builder. Jed covers various aspects of angel investing based on his own experience and lessons learned.
He starts by defining key terminology like carried interest, limited partners (LPs), general partners (GPs), VC funds, and syndicates. Jed then discusses some investing axioms or commonly held beliefs, providing his own perspective on topics like favoring team execution over just ideas, prioritizing large markets over rockstar teams, and valuing sales/distribution over perceived defensibility factors.
Jed outlines the three main options for getting into venture investing: being an independent angel, joining a syndicate, or investing via a VC fund. He explains the pros and cons of each approach.
He emphasizes the importance of having an investment thesis focused on sectors/domains, geographies, and stages based on one’s expertise, interests and capital. Jed shares his detailed diligence checklist and the key areas he evaluates when assessing startups like product/service, market, business economics, defensibility, traction, team and valuation.
Jed challenges the notion that deal flow alone determines success. He presents a framework with five levers that investors can adjust: capital, deal flow, number of deals, decision quality, and economics (share of upside captured).
On portfolio construction, he advises managing risk by being able to walk away from losses, taking time instead of rushing in, diversifying over time, and focusing on potential life-changing outcomes versus just trying to build a large portfolio quickly.
He provides guidance for beginner angels, recommending starting with smaller bets to learn, leveraging syndicates for deal access and diligence, and developing decision-making skills over many reps before scaling up check sizes. Ultimately, Jed believes building diligence prowess is critical for long-term venture success.
The podcast concludes with Jed briefly mentioning his new “Venture Fundamentals” program aimed at equipping emerging angel investors with essential venture knowledge.
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