Ron Conway - Startup Investor School Day 4

TL;DR

Ron Conway describes his angel investing career, emphasizing that failure is a core part of the business model (40–60% of investments go to zero) and that winners must pay for losers. He advises investing in founder character and determination above the idea, using a portfolio approach (5–10 small checks in a sector where you have domain expertise) to eventually play with house money.

Key insights

• 40–60% of every portfolio company will completely go out of business; that failure rate is expected and part of the model.
• The best investment decision Ron Conway made was to focus solely on internet software in 1994, targeting the most disruptive industry with thousands of percent growth.
• SV Angel invests in the founder first, the idea second; within five minutes of meeting a founder, Conway can decide if he likes them based on character and integrity.