While I’m focused on building my new startup and its app, Zooch, I wanted to join the great tradition of publishing my angel investing ‘anti-portfolio’, the deals I turned down that went on to make it very big.
Fortunately I did invest in two startups that were acquired by publicly-traded companies (and quickly), which likely put me in top 10% VC performance returns for that time period.
PayPal, then known as Confinity, had a business model that didn’t make sense to me at all. It was all about money transfers via PalmPilots! They were even talking about installing PalmPilots at supermarket checkout counters so you could pay with your PalmPilot and PayPal when you bought groceries.
Fortunately, the team was able to pivot and discover product-market fit with payments over email (and web and Ebay) and execute amazingly well!
I knew Luke Nosek from the team from before PayPal and met the other founders and founding team members like Peter, Max and Ken early on. I served on their PayPal Developer Network Advisory Board when they set that up, as we used PayPal for subscriptions with Ryze.
I would pass on it again today due to the clearly unworkable business plan at that time, and my lack of knowledge of the leadership team’s excellence.
The other is an unforced error as I was planning to invest in Salesforce.com but did not reply in time for the offering I was planning to invest in. But the worst part is that I probably could have bought some stock later since I know and socialized with founder Marc Benioff. So this one was probably the biggest mistake and lesson.
The lesson: Be willing to hustle to get an allocation, especially if you have contacts at the firm you’d like to invest in. And also don’t be embarrassed about investing a small amount.