10x, as in “10x Engineer,” is a well-trod expression used to suggest there are classes of people who are so much better than average that the results you get from them are an order of magnitude higher. There’s appropriate debate around whether the concept is true enough to turn into a hiring principle and if the concept celebrates the individual at the expense of the team. Hold that aside because I’m not addressing that here. Instead I want to comment on what a “10x Angel” looks like – the type of individual investor who delivers value to the startup in ways that are notably different than the average funder.
One reason Satya and I thought we had Product Market Fit for starting Homebrew was behavior we saw as angel investors. Despite being the smallest line on a founder’s cap table, we were often one of the first calls they made when confronted with a problem to solve or opportunity to consider. Now, I’m not going to break my arm patting myself on the back but it was certainly a principle we took to our seed fund. Be the type of fund we would have wanted to take money from.
Similarly I was exposed to – and continue to see – what I’d call 0x Angels -> people who write a check and then actually erode value. Avoid these folks. You can reference check angels just like you would VCs or employees. If you just need the money, stick unknown angels in an AngelList Syndicate so they have more limited information rights.
What are some differences btw 10x Angels and 0x Angels?
0x Angels forward every TechCrunch article about a competitor to the founder with note “Should we be worried?” or “What’s your take on this?” (and then get offended when there’s not an immediate lengthy response)
10x Angels gather info about the market from non-media sources and only contact the team when it’s actionable, such as “Hey, this PhD was talking about you guys on his blog. Seems like he might be interested in working for you guys.” or “A buddy told me Competitor A is talking with Google about an acquisition. His info is usually pretty reliable. You hear anything similar?”
0x Angels disappear in the tough times, not wanting to be associated with something that isn’t yet a winner.
10x Angels deliver clear feedback and set expectations for how they can, or can’t, help when companies are struggling. They’re willing to spend more time than their ownership % might warrant. This doesn’t mean they tolerate bad behavior or throw good time after bad forever, but they remember they invested in the people. And relationships are long term equities.
0x Angels love to talk about their success on social media, making it about them, not the company.
10x Angels also promote enthusiastically but are careful with their pronouns. “We” didn’t build an amazing company. They did.
0x Angels request advisor shares if they’re asked to make an introduction to someone they know. Or when an exciting A Round may “dilute” them (no, you own less of something much bigger. That’s a good thing.)
10x Angels know that making an investment comes with some commitment of elbow grease and try to be upfront about these expectations with the founders. If the founders want to meaningfully increase that amount of work ongoing, 10x Angels have open conversations about whether they can assist and if so, how to make meaningfully valuable. Or they suggest advisors, contractors or potential hires that might have more time.
0x Angels don’t use bcc
10x Angels take long emails offline because face-to-face is easier to collaborate, solve problems, etc than a founder<>investors chain letter
Any other differences you’ve seen between 10x Angels and 0x Angels?
I LOVE this post! Great one, Hunter!
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