Sam Altman - Startup Investor School Day 1

TL;DR

Angel investing success depends on the power law: the single best investment returns more than all others combined. The most common mistakes are caring too much about other investors’ opinions and misunderstanding the power law.

Key insights

• The number one mistake is being too swayed by what other investors think about a company; 80% of investors outsource 80% of decision-making to others.
• The power law means the top investment is worth more than all others combined, and the second best is worth more than the rest; angel investing is a business of home runs, not singles.
• Best investments are good ideas that look like bad ideas; most capital goes to bad ideas that look like good ideas (e.g., chasing what worked two years ago).