Y-Combinator have invested into over 4,000 companies that have a combined value of over $600bn. They were the first investors into Stripe, Airbnb, Coinbase and many more unicorns.
Here’s 5 pieces of angel investing advice from YC co-founder Paul Graham:
1/ Deal Mechanics
“Don't spend much time worrying about the details of deal terms. That's not how you win at this game. When you hear people talking about a successful angel investor, they're not saying "He got a 4x liquidation preference." They're saying "He invested in Google."
2/ Picking Winners
“To be a good angel investor, you have to be a good judge of potential…What makes a good founder? Good founders make things happen the way they want… You want to fund people who are relentlessly resourceful.”
3/ Deal Flow
“The problem is not finding startups, exactly, but finding a stream of reasonably high quality ones. If you want to invest seriously, the way to get started is to bootstrap yourself off your existing connections, be a good investor in the startups you meet that way, and eventually you'll start a chain reaction.”
4/ Being Decisive
“How do you be a good angel investor? The first thing you need is to be decisive. That doesn't mean the investor says yes to everyone. Far from it. It means he makes up his mind quickly, and follows through. There's a hack for being decisive… ratchet down the size of your investment till it's an amount you wouldn't care too much about losing”
5/ Being Good
“The most successful angel investors I know are all basically good people… Startups create wealth, and creating wealth is not a zero sum game. No one has to lose for you to win.”
The best thing about advice from YC and Paul Graham: it's timeless. Paul wrote this in 2009 and it's still relevant today for every angel investor when looking at startup investment.