Oh, angel investing, my dear friends, is like trying to ride a unicycle across a tightrope over Niagara Falls, blindfolded, and someone’s throwing watermelons at you. It’s not for the faint of heart, and I’m living proof! I threw in $25 to $50 thousand per pop into this financial circus and what did I get? A return of 180 percent over 10 years. Sounds great, right? Wrong! The S&P 500, that old, boring index fund, chugged along at 250 percent. Yep, I took a risk equivalent to juggling flaming chainsaws for the return of a lemonade stand.
Now, let’s play Monday morning quarterback. How could I have not ended up with financial egg on my face? Corporate governance! Sounds as exciting as watching paint dry, but boy, it’s important. If I couldn’t be the big cheese, I should’ve buddied up with someone who could lay down the law on good governance.
Let’s do a roll call of my investment darlings, shall we?
In the “winners with a gold star for responsibility” corner, we have Social Tables and Veenome. They had great teams, and they actually talked to their investors – shocking, I know!
And then there’s TalkLocal (originally Seva Call), lounging in the “meh, they’re okay” section. Good team, check. Chats with investors, check. But they’re like that cousin who’s always ‘almost’ doing something great.
Now, the “losers with leadership issues” category – my favorite. We have SpotFlux, where I got a whopping negative 93 percent return. Then there’s YouEye, where the founder left for a galaxy far, far away, leaving a trail of chaos. And Spinnkr – let’s just say they’re the poster children for “How Not to Run a Startup.” And HugeFan? The founder was a few clowns short of a circus. My mistake for not realizing I was investing in a three-ring fiasco.
If my investments were a soap opera, the plot twist would be that only a few stars make the whole show a hit. I had four needing a corporate babysitter. Strong board oversight and tight governance could’ve been my fairy godmother.
Let’s talk about good governance, shall we? Imagine a board of directors that actually meets, financial memos that don’t require a decoder ring and a board secretary who’s more than just a glorified note-taker. There should be budgets that aren’t just wishful thinking, performance metrics that aren’t made up on the spot, and compensation discussions that don’t resemble a game of Monopoly. And audits – let’s not forget those. It’s like going to the dentist; nobody likes it, but it prevents bigger pain later.
And then there’s Trustify, the Bonnie and Clyde of startups. They had a board, but it was like having Laurel and Hardy in charge of nuclear codes. And Communcilique? Oh, the drama! They claimed big wins but had as much revenue as my nephew’s lemonade stand. The Chairman was either in on the heist or should’ve been crowned “King of the Clueless.”
In the startup rodeo, even the best bucking broncos can throw you off. But without a good sheriff in town (read: solid board), you’re just setting yourself up for a Wild West shootout with rubber bullets. And that, my friends, is the not-so-funny truth about angel investing.
Have you ever worked with an executive coach? Do you know what it feels like to work with someone who asks tough questions and works with you to tackle challenging issues? Try a complimentary coaching session. Schedule yours today.
- Intentional Leadership – a guide to developing a leadership canvas to build and motivate high-performance teams.
- Cyphers & Sighs – a global high-tech suspense thriller of love, loyalty, and deceit.
Order Non-Fiction Here Order Fiction Here
Intentional Leadership Cyphers & Sighs
