between two new venture funds last year. He added that you should be clear about what you have to offer to founders besides money, and make sure the founders understand the product they are buying from you.
Barnes loves working with founders, and he believes that founders, not venture capitalists, predict the future needs of their customer, the future of the market they will dominate, or the future emergence of the category they will define. A good investor, he says, understands that. Ultimately, angel investing is about betting on people — so backing those you trust and believe in makes all the difference.
What are the existential risks? What's lurking out there that could cause this company to fail even when the founders make all the right moves? Early on, he suggested making more investments rather than making larger investments. "In fact, I think the best thing to do is make every investment a standard size rather than allowing your excitement level at the time of investment to dictate the amount of money you invest," said Barnes.
"Set a budget as a percent of your net worth, and stick to it," he said. "If you subscribe to the 'they all go to zero' rule [that the investment won't pay out], then it's probably 10 to 20% at most."
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