For this week’s episode I chatted with Angela Lee, Founder of 37 Angels, an investment network that activates female investors through an educational bootcamp. She is also a professor at the Columbia Business School where she focuses on teaching about venture capital.
Angela is great at sharing her knowledge about the world. She has a very structured way of communicating her wonderful insights. During our chat she shared some of her favorite lessons she teaches at CBS and useful business strategies everyone should keep in mind, like how to ask for help in the right way. We also talked about the gender gap in angel investing and venture capital, an issue that Angela and 37 Angels is doing amazing work to help with. I always love catching up with Angela and I hope you enjoy the conversation.
MPD: Welcome Angela. Thanks for being here today.
Angela Lee: Thank you so much for having me
Why don't we start off by level setting a little bit. Do you wanna talk about your role at Columbia and what you do there?
Angela Lee: Yeah, so I wear two hats. The first is I'm a professor there. I mainly teach venture capital classes. I teach three. I asked you to leadership course and a strategy course because I am a recovering management consultant.
And then the second time I wear the second hat I wear is on the faculty director for the learning center, which is the center for entrepreneurship at the business school.
MPD: Okay. Before we jump in the Lang center, would you give just a quick high level of it's interesting that you teach three different VC classes?
I think when I was there, there was one, maybe two. What are the three different topics that exists for view?
Angela Lee: Yeah. So the first one is foundations and venture capital, and it's just really teaching students how to deal with as a startup. And what is it that people look for and make sure that they know how to do all of them.
The second course is building your venture capital investment thesis, and it's really helping people to deep dive into a sector focus area. How did they figure out what they're going to be an expert in? And then the last one was we're still renaming and trying to figure it out is all about launching and managing.
MPD: Interesting. And it's funny, we had Beazer Clarkson from Fest, Sapphire partners on here. And one thing she talked about was how unusual it is for emerging VCs to have good fund administration, the communication, and it becomes one of the factors they look for with the invest, but it's not one of the things discussed or expected.
Fascinating to hear. We're actually teaching that proactively.
Angela Lee: I literally call it the boring stuff.
MPD: That's great. No, that's great. Would you, give a little quick overview on the Lang center?
Angela Lee: Yeah. So late has been around since, before you and I both went to Columbia and we're focused on kind of three types of students and alumni folks who want to launch a company, folks who want to invest in a company, and then folks who want to join a startup, maybe do corporate innovation.
And we have curriculum. We have programming a lot of mentorship with great alumni. To make sure that not only while they're in school, they can go to those three paths, but also five years off school or 15 years after school that they have resources to go to. Because as there isn't a set path for any of those things and not what they have folks in a network.
MPD: Got it. And so you're doing, you're teaching VC, but you're helping to mentor the entrepreneurship side.
Angela Lee: Yeah. Because it's one big happy ecosystem. I feel like you can't do one without.
MPD: Right there on their entrepreneurship classes at Columbia as well.
Angela Lee: It's interesting. I teach several hundred venture capital students a year, but I would argue 60% of them want to be founders.
And it's interesting. How many of those students take the course to understand how investors take?
MPD: Got it. And do you think that's a good hack? Is that something everyone should.
Angela Lee: I do think, one of my, like life's tendance is empathy. And so I think it is very good to know how the other side is thinking in all realms.
And so I wouldn't call it a hack, but I would say that it is an incredibly good life skill to know what the people on the other side of the table are.
MPD: That's interesting. It's funny. We on the VC side, we'll often talk to entrepreneurs, obviously. Some will complain laughingly about the fundraising process totally appropriate because it's a nightmare.
And then we'll, we'll remind them that it's often worse for the VCs to raise money than it is for the entrepreneurs. As much harder cycles are longer. I suppose, maybe the frequency of getting rejected may not be the same, but it's it's a long, it's a long road to hoe. If you're trying to raise venture.
Which we can talk about. Okay. So how long have you been at CBS?
Angela Lee: Eight.
MPD: Wow. It's been awhile coming up on a decade
Angela Lee: going back.
MPD: Alright. So while we have you here and assuming most of the people listening don't want to pay for an MBA. Or, or past that point in their career, what is the still a little bit of information.
What's the most interesting lesson you think you teach your VC students? What's something everyone should know, even if they haven't gone through the MBA program.
Angela Lee: Yeah. So I think there are a couple of messages that I teach in my class, which might be surprised because I teach finance classes. So I think people expect to walk out of the course, usually having a, build a cap table.
Do you know, dilution that but the two things I talk about a lot that are more on the qualitative side, which I think are just important to know is that being venture capitalists and Mila, frankly, is so much more about who, than what, I think more and more, it's all about the quality of your network, not the quantity of your network, the quality of your network.
And so we talk about that a lot in terms of what does it mean to build an authentic and thoughtful now? I think so much about business school is that and then I think the second thing is I end every class with be a good egg, and I really mean that, which is, I think there are a lot of jerks in the business world.
There are a lot of jerks in the venture capital world, and I just think it's so important that not only is that bad for the world, but I would argue it's for.
MPD: Why do you argue it's bad for business?
Angela Lee: So I for business, because while the feedback cycles in the, ventures industry are long I do believe that at some point it comes back to bite you, right?
If you're a jerk at some point, and we see a lot of ugly head lunch the last couple of years, like from more notable founders, but on the VC side as well. I just think that it comes back to bite you and people aren't gonna want to work with you, and it's not going to work for business.
MPD: I think it's a big deal.
I think you're onto something very important here that, everyone thinks their venture is going to succeed. Even if it does, you're not done. Yeah. People use the phrase. It's your life's work when you're building a company, but for many, when you finish or you sell that, you start something else because really it wasn't your life's work.
You're just an entrepreneurial firm that loves building. So it is a multi period. That's something that's hard to get your head around. Yeah. Are there places where you think people end up slipping into the bed egg side of this more commonly than others? When are you getting people that advice be a good egg?
Angela Lee: So I think there's like intentional and unintentional and the intentional, I think is the more obvious one. That's easier to give people advice around. So not to be a jerk. So like obviously, the last year and a half, like when things. Not going well. Sometimes it can be easy to take advantage.
So for example, when valuations are really high, right? Like founders can, in some cases take advantage of investors and, in their valuations because they can and vice versa when things aren't so doing so well in the market, investors can take advantage of that, like really onerous terms. I think that's like the obvious stuff.
Like just not to take advantage of people when things aren't going so well, because at some point, because there's business cycles, you're going to be on the other side of that, but I would argue like the more unconscious stuff is just. Taking time to get to know people as humans. That would be one which is hard.
Cause we're all really busy. Giving more here network than you take from it, I think is another just a book that I loved. And I it was, I gave it out. I think it's like 2019. It was like, the gift I gave out was give and take by Adam Grant is all about giving to your network. And I think to be a giver to your network, like it takes time and intentionality that.
When you're a matcher or even a taker, it's not because you want to be a jerk. It just, this we're all really busy. So I think that's something I talk a lot about giving to your network.
MPD: Got it. So the quality of the network comment, I think, is also interesting because we, if you're a MBA student at Columbia, which is teaching a hundred kids a year, going through your class, which is going to print a bunch of VCs, I don't know if this is true, but I would assume the vast majority, the largest alumni network of venture capital in New York has Columbia students.
Columbia. They're coming out. And if you're an under, if you're an MBA student, you come out and you want to be a founder, you probably have classmates who became VCs. Great. So you've got that quality of network. You've got people who are in those roles. What happens if you didn't go to the right schools or you're new to the area, or you didn't come from that background?
So this is one of the things we launched a platform called thunder.vc, with the hope of flattening access to care. To make it so you didn't have to be born in the right circle or stumble into the right networks because you could match in theory with someone based on the qual, based on your criteria objectively and get in there.
So how do we balance the build a high-quality network with also this kind of idea of fair access? How do we do that in the business
Angela Lee: world?
So I would like three pieces of advice for folks. I think the first is to ask for help. The second is to make it easy for people to help you. And then the third is to again, add value to the ecosystem. So in terms of asking for. Like you do I get, I don't know, 10 emails a day for people saying, oh, I want to go to coffee with you for 30 minutes.
And there's, it's a completely unspecific ask. Versus saying something like I'm struggling with how many, I don't know, equity shares to give my advisor or whatever it is. Like the more specificity the better, because then I can say, actually don't know anything about Bitcoin. I have no idea what's happening with Bitcoin, but why don't you talk to right.
That could be more helpful. But also the making it easy for me to help you. So as opposed to saying, Hey, do you know any ad tech investors? And be like, Hey, you're connecting these three people on LinkedIn. I researched them. I wrote an intro email for you, just if you could send those off, I'm so much more likely to help that farmer who is specific about their asks and then who makes it easy for me to help them, then the person who's oh, I take it as coffee for 30 minutes.
So that's on the health. And then again, giving to the network. I think that everybody can add value in some way. And people remember that. And I think by showing that energy, you're going to get it back.
MPD: I love that. I love that. I think this is one of those things. I think the language, a lot of us uses, the more you give, the more you get, but it, I haven't heard of anyone teaching it as a kind of.
The other thing I find that's interesting is a lot of people when they ask for that generic coffee or chat, have a very specific ask that we can do digitally. Hey, I'm looking for a job. I'm looking for funding, which are two common asks that come my way when those are fine, but I have systems and process for that.
I connect you with the right people and the machine starts. So it's interesting that there is a need for coaching around this. What I have found is I just write back and say, how can I help? They're saying, Hey let's get coffee. And I say, how can I help? Yeah. And I think people then get brave and make the ask.
The ask is great. If you're in the business of helping folks, that's part of your trend, you know what you do. It's easier. I think one thing people need to realize it's not taboo.
Angela Lee: Yeah. I think they're being more polite by not making the direct ass, but my first of all, that's our job is to help founders.
And you're making our life easier by that, with that specificity, because I, now I can respond to you in one email versus three, and that is you multiply that times. The hundreds of emails, we will have a day. That's ours.
MPD: That's awesome. So what drew you to academia? I think I've asked you this question before, but I want to hear the answer again.
Angela Lee: Yeah. I would say that it actually happened when I was at McKinsey and I was talking to a partner and I was like, oh, I'd love that a week to take so much. One more here. And then I love the part of the client assignment when it's actually ending. And we get to hand it over to the assignment, the project, the strategy to the client and teach them how to do it.
And the partner was like, why are you doing a job where you love maybe 20% of what you're doing? It's go, just do that. And I realized. That's like my favorite part is like unlocking somebody else and empowering them. And so I spent like two or three years running a bunch of experiments. I thought I was going to be an executive coach.
I tried teaching second grade, eighth grade high school MBA, executive education. I was doing like podcasts. I was on TV. I did everything that was around disseminating information. And I had an Excel spreadsheet that I tested channel topic and audience. And I had a little rubric and I realized I liked teaching long form content.
I like teaching our kind of MBA age and I, settled on still too many topics. And like the teach, most professors teach like two courses. I teach five. So yeah, that, that is the three year experiment that I ran, but I'm still running.
MPD: I love the Excel sheet and I've, I connected I've done that for everything.
Oh, you show in class. I did that for everything from moving to new home onward. The checking it off. That's great. I think once you've have consulting training, it's hard not to use the Excel
Angela Lee: sheet. Oh. During our, when I got married, I like was using pivot tables that are invite list. He's like, how are you?
Pivot table. Yeah,
MPD: that's great. Okay. All right. So you went to CVS how has it changed? Cause you were a student there a little while ago. How has the program the business school changed
Angela Lee: overall or specifically within more like entrepreneurially focused?
MPD: Entrepreneurial focus is probably more interesting, but I'm open to the, yeah,
Angela Lee: would say overall, I think there's just been a really big push towards experiential learning.
I think that's just really interesting. And then our new Dean is really focused on a more digital curriculum. And so we're teaching coding class and stuff that you wouldn't expect it. This is that's broadly speaking, specifically within entrepreneurship. The interest in venture capital is insane.
So I teach foundations of venture capital to 300 students a year. That's how many people are interested in learning this stuff. And so that's one thing. I also think that again, experiential learning, I think is something that's very central to the way that I teach in the way that I like to run the center.
And something that we're trying to do a better job of is really activating the power of the.
MPD: And do you think the MBA program, as it stands now is a really valuable asset for entrepreneurs and or VCs as they're taking a stepping stone in their career? I
Angela Lee: think it absolutely is if you're purposeful and intentional about it.
I think the mistake that people make, whether they're they want to be a founder or they want to be an investor, is. They are a little bit too all over the map in their first, two years goes by very quickly, especially if you think about how quickly you have to recruit for your summer internship and they come and well, you and I say this as somebody who did this, i, I, I thought I was I like, I interviewed for Lehman brothers, I obviously interviewed with consulting and I think people, especially with venture capital, I think you need to be a little bit more intentional about starting to make those connections.
MPD: Yeah, that makes total sense. What's unique about the program at CVS?
Cause I know a lot of business schools like VC has been on the rise and it's been popularized for now 21 years in a major way. Maybe 24, 24, 25 years, I guess in the beginning of the boom, what is unique about what CBS is doing for this space? How you're approaching
Angela Lee: it? The first thing is access.
I'm probably going to say that work about 75 times a day. But it is true. There's just a density of network in New York city of alum that, we're actually, Again, try to activate that right now. So I think that cannot be beat and it means that you can have an internship and be in the office two days a week in a way, again, in a post COVID world in a way that RPO schools can't.
So I think that's one day. And then the second thing is we are launching a new venture capital program in the fall where it's a two year program and it's curriculum and you get paired with a fund or your first year you got an investment thesis with them. You are conducting diligence. On real companies, we actually have money to deploy.
And so the students are actually helping us to make investment decisions. And it is really like a two year apprenticeship program paired with curriculum that does not exist at any of the other services.
MPD: That's very innovative. I didn't even know that was that.
Angela Lee: So you're hearing it here
MPD: first. That's very cool.
Has that been announced or is this the breaking news here?
Angela Lee: Actually, I actually don't know if I was supposed to say that because it hasn't announced yet, but it is happening. And there will be something formal coming up soon.
MPD: That's terrific. I applaud you for that. That sounds very innovative. Okay.
So you're focused, you found your life, mission and teaching. You're doing that in more ways than through CVS. I, we both know that. Do you mind giving us an overview of 37 angels?
Angela Lee: Yeah. So 37 angels is something that I started also eight years ago and we have that of two arms. What we do the first is for an investment network.
We have a hundred folks in the network and every year we looked at about 2,500 companies and invest in 10, we've invested in 80 companies to date and. Thankfully have two unicorns batch. And then the other part of it that I'm really passionate about is the bootcamp. So we teach people how to become angel investors and venture capitalists, and they learn sourcing and diligence evaluation, all that fun stuff, and then they get to apply it to real deal flows.
So it's a nice rate to lend everything that. And I created it out of a personal leave, which is when I started angel investing in 2008, no idea what I was doing and was just fiercely Googling everything at every event and just felt like it was this big black box. And I really wanted to shine a light on that.
MPD: So now I know 37 angels also focuses has a diversity component to it. Do you mind explaining. You know what that dimension of the program is? Yeah.
Angela Lee: So we launched really focused on teaching women how to do this because we wanted to close the gender gap of the angel investing in venture capital. And in recent years, we've broadened the diversity lens a little bit to just being focused on diverse investors.
And it's really to close the diversity gap. Horrible and venture capital. And so when I started messaging, I was 28, I'm an Asian woman and I would walk into rooms and literally get asked if I was lost. And then when I started 37 angels, people would ask is it just rich Housewives? People ask me all the time, like, where'd you get your money?
And I'm like, I've been angel investing longer than I've been married. And so just all sorts of questions, just assuming that I must not know what I'm talking about. And I created 37 angels to fill a personal need because I wanted to invest alongside people who look like me. And I wanted a place where it was safe to ask questions that I didn't feel comfortable asking what I started doing this.
MPD: So it's hard for people to experience this and let's show walking in your shoes that you've gone down this path. Even just the anecdotes you just dropped. I hadn't heard before from your particular project. What are the, what are you having done this now and helped a lot of people get into this industry?
What are the causes? Do you have any sense of that? Why are, why is there such gender disparity what's happening?
Angela Lee: Women have a lot more imposter syndrome. I'm sure a lot of you have heard this study from Harvard business school that says that women will only apply to a job when they're like 90 to a hundred percent qualified for, in terms of the job description. And then we'll apply to a job and they're about 60% qualified to live.
Okay. There's 10 things that you need. I've got six of them. I'm going to go ahead and apply. And by definition to be an angel investor or a venture capitalist, and you are under qualified for that job because none of us really know what we're doing. And you're investing in nascent industries and companies that have, three employees.
And so all of us are under qualified because we have to be ahead of the curve to be successful. And so men are much more likely to say that I can do that. Whereas I think women are a little bit less likely to that. And the other thing is, I'm going to say the word again, which is network, which is that you don't see people who look like you doing it.
And one small statistic from Columbia is there's. A couple of other venture capital professors are male and in their classes that it's, it's about one sixth limit in terms of students, my cautions about one second. And it's very statistically significant and some of it's right. The women maybe are self selecting to be taught by women.
But I do think there's something about, oh, she showed me that oh, women can do this. And I think that's really important to have role models.
MPD: That's fascinating, but I would assume over time that changes nonlinearly right. If you're training and bringing a bunch of people into a market, Now there's a lot of other women, I would assume how many women have come through 37 angels that are investing now,
Angela Lee: the network is a hundred, but maybe 300.
MPD: That's a huge number. So I would assume all of those are talking to other folks and setting examples for others. So I would imagine this program has shifted the trend at sunlight. Or we'll shift. Are you seeing that happen? Like a second order impact of 37 angels?
Angela Lee: So on the Angela messing side? Yes. The reason why we're called 37 angels is because when we started only 13% of angel investors were women and we wanted to close the gap from 13 to 50.
And these days we're more at 18 to 20% angel investors be women. So that's better. It's better not great, but it's better. Weirdly venturing has shifted, not. And there are a lot of reasons for that. It's in general, hard to get a job in venture for everybody, right? Like it's just a, if there are very few jobs and there are a lot of people seeking them.
But the other thing about venture is that in order to make partner and to get senior, they either have to raise these funds. Or someone has to leave. And if you think about who is senior in luncher, they're like 40, 45 50. And so there hasn't been like a generational shift for the junior people to become more senior.
So it'll take time.
MPD: So let's take a step back then. Let's talk about 37 angels again. So we went down a little branch there. How is the community structured for folks who are out there and are interested in the angel network side of this? Why would they join? What's.
Angela Lee: Yeah. You know, if I were looking to join an angel network or basically just putting money into this asset class, I think there are a couple of questions you have to ask yourself.
One is how much control do you want to have over investing? So the least amount of control is your LP and four funds. And I have no control, right? I'm like, here's my. Go make lots of money with my money. And then on the other end, there's this little angel where every year you look at another, a couple hundred deals and you decided what to invest in.
And then in between is an angel network and an agent Splunk model, an angel network model. At least the way we run in homeless people run is we are curating deal flow for you. So we look at 2,500 companies. We really only introduced the best 50 to our eight. And then our angles at that point, get to vote diligence and they have autonomy over what they invest in.
And so you get the benefit of the listened to network. You get the benefit of deal curation, but you still have control over what you invest in an angel. Is where people are pooling capital. Usually there's some building mechanism and, a majority or a core on boats to mess with something and they vote.
And so you get the benefit of diversification, but less autonomy. So I think it's really important for people to understand where they want to be in that spectrum.
MPD: Yeah. And so why does someone want to be in the network? Because I think you make a really good point about the time-savings, but you're still making decisions.
Is there a certain type of person that tends to appeal to maybe someone with a day job or what's the best, most likely fit? Yeah, something
Angela Lee: like 80 to 90% of angels have day jobs. But I would say that Yeah, certainly if you're new to the ecosystem, I would join a network. Think you're going to learn so much, just sheerly through osmosis and from the other smart people around the table.
I think that's really important, but I always tell people go to a couple of meetings because you need to trust those people to be on our diligence team. Do you want something to like spending time with them? And so make sure that you like the other people in the network and go to a couple meetings before.
MPD: And what type of companies you guys looking for as you're filtering from 2,500 down to 50? What are those criteria?
Angela Lee: Yeah, so we look at the people, problem, progress and price people is obviously the team looking for domain expertise is more important than B2B than B2C. Something that we certainly look for.
We're looking for. That like magical it's after I looked for empathy, specifically customer empathy and investor empathy, investing on the problem side, large problem, but a problem that we also care about and a deep understanding of the problem I find too often that founders push their product and they're like, here's my staying.
I'm going to tell you the 87 different features and benefits. And I'm like, what's the problem you're solving for the customer. And the more articulate and focused you are about that. The more I, it. Real progress perspective. We look for six months of customer data. That doesn't mean revenue, although it often correlates to revenue.
But we look for there's some demonstration that somebody cares about this. And even if you're pre-revenue are people logging in, are they engaging? Where do they fall off on the customer journey and more looking for six months of customer data and a repeatable customer acquisition process.
But of course the deal terms need to be.
MPD: Got it. Uh, taking this moment to give you an underhand pitch here, why should entrepreneurs present to 37 angels? What's the. What's the appeal as an investor.
Angela Lee: I'm actually gonna start with the most tactical thing first, which is we're efficient.
So we guarantee that from pitch to funding, we'll get back to the four weeks, no other animal that worked does that, right. The opportunity, I think takes six months to get back to a founder. And it's really important to me that we are transparent and efficient with our answers. So we get told a lot of the time through the only agent.
Because we're really, I'm really good at that's one of my skillsets. So that's a tactical reason. The other thing is the power by networks. So we really try to bring that to work for the founders of introductions. We actually ask it before we even fund you in the pitch forum. The last question we ask is always, what do you need help with?
And then I selected when I send them an email, you said, Insurance data scientists here are six people make introductions for you. So I think the combination of efficiency and helpfulness is what gets us the quality of deal flow that we have.
MPD: Fascinating. Okay. Now you've also been conducting probably unintentionally, a large study.
You've had 300 interested investors come to you. They've gone through a similar type of program. Have you figured out what makes a good investor? Have you seen any pattern in that process?
Angela Lee: I mean, I'm hugely biased and as the answer, but I do think education makes a good investor. Luckily, we're eight years into this.
We have metrics, our portfolio has a 30% over 30% IRR and we have it. So, and it's interesting because investors, yeah, it, yeah, it does. And these are new investors. And so. I personally believe that like an openness to learning is going to make you successful in life. And I, people who are coming into a network that is grounded in education, I think there's something about that.
Openness to learning and the openness to ask questions. They openness to admit what they don't know. And I think a lot of investors are on the other side, which is, let me tell you everything. I do know versus athletes as special. So I think that's one I also think that, we talk a lot about being data-driven loners.
I think there's, miss a fallacy in the ecosystem that brilliant entrepreneurs and brilliant VCs are somehow like able to foresee the future. And I totally disagree with that on the founder side, for sure. And I'm like, it's all about running really quick experiments. Again, this is not new. This is like lean startup.
This is what a lot of people talk about, but to really. Use that in your investing and to be a data-driven partner and to invest in data-driven learners is something that we think a lot about.
MPD: It's very interesting. I'm sure. Ian Siglo is also a Columbia business school grad who was on this out.
That's great. So he was on the, this con in this conversation, I want to say about six months ago. And I asked him what he looked forward to was hiring, I think was the question. And it was an intellectual curiosity answer as well as also that education. For him, it was about constantly learning new things.
That resonated with me very significantly because it's not signal I had looked for before, but it's a pattern I immediately saw with some of the people I think of as the best investors. So
Angela Lee: I don't know if there's
MPD: a policy, right? Fortunately not all the people who make the best returns these in the short-term are good eggs, but Okay, angel investing.
Let's stay on that for one more thread here. You know, you've all you have this interesting perspective. Cause 37 angels is more than a training program. It's given you this unique view from my perspective into the market. How do you think the pandemic has affected the, you the pre-seed angel stage startup.
I think your view is probably unique because it's not just that you're looking at twenty-five hundred deals. You're looking at twenty-five hundred deals and talking to 300 investors right through the system. So I think your signal to noise ratio might be higher than what people are doing. If they're seeing, if they're, even if they're doing a lot of deals on their own.
So what are you saying?
Angela Lee: So I think that the art of getting someone to pay attention to you over zoom, over email. The founders who do that are going to be the Phaedrus who can also break through the noise from a customer perspective. So unfortunately, during the pandemic, I think what happened is that it's not like income, maybe like network inequality.
However you want to define that actually increase. And actually the data proves that out that diversity was worse slash. PR in any way that you decide that in the venture capital industry, because what happened is that people are investing with people that they know or they're, you know, immediate because it's, it is there, it is a little bit hard, to develop that before in relationship over zoom. And so we are double-dipping in our existing networks, our networks tend to look like ourselves. So I think that the founders who did really well were the ones who were able to break through that and find like unique ways. To build new relationships with was really hard last year.
MPD: Any best practices you saw along the way for folks building networks through zoom?
Angela Lee: In addition to what I talked about in terms of asking for help and being specific and making it easy, do your research. I think it is abundantly obvious when someone sends me an email and they've just read my bio.
Sometimes they like have read interviews and all that times, if you don't need to do that, literally read. And I'm we lay it out there and our FAQ is like what we invested in and all that kind of stuff. And it just, they show a little bit of that research, again, empathy. I am going to help them so much more.
And the other thing is I try really hard to help people a lot, but I used to be like, I'm going to just give you a bunch of stuff. And now what I do is every time I do a 30 minute mentoring me, I tell them, whatever, five, 10 things that are useful. And I'm like, if you want that email, me and I am shocked at how many people don't email me.
Because if you don't care enough that that was an interesting connection or a resource or whatever, just all up with me, but I'm not going to take the time to necessarily help. But the people who follow up, I'm going to help you tenfold that. So I think it's just like following up and showing up and doing the work and it's shocking how few people.
MPD: Yeah. That's probably an easy way to filter and vet people.
Angela Lee: Yeah. If I'm, I don't know if I should share this, but if I'm on like a prescreening, tolerability is called the founder, I'll say oh, you sell into whatever CFOs of hospitals. I know so-and-so at Mount Sinai. If they don't email me tomorrow or half an hour after the meeting, you'd be like, Hey, can you introduce me to that person?
Because that person is worth a million dollars of revenue by company. Like I'm not going to invest in you. And but it's surprising how many people.
MPD: little test. So what trends are you seeing when you're looking at 2,500 deals, any major patterns you're seeing emerge that are. And the pre-seed stage.
Angela Lee: I'll a pattern I don't like is what I'm sure I'm not the first person to mention this. It's just COVID markets, just oh, let me build a product.
That's going to be wildly successful for the next, however many months that we're going to be, going through this, but has no business applicability in the longterm. I think that's something I am very tired of seeing. That'd be a bad trend. I think. The diversity bandwagon is maybe another trend that I'm a little tired of it, I'm somebody who has been deeply passionate about, I do a lot of corporate training on diversity and it's interesting how many people, like last year were like, did you know that diversity is an issue?
And yeah, there's a lot of that. And then
MPD: maybe, but isn't that a good thing? Isn't late adoption of good concepts, still. Good adoption.
Angela Lee: It is. I think if you recognize where you are on the adoption curve, I think for a founder to come with an idea around, I don't know, workplaces offering childcare and for them to think that's a brilliant new idea.
Is that not right? But it's good that they're thinking about it. You're right.
MPD: And so you talked about trends happening a little bit that you're seeing in some of the companies, anything that's happened in the angel market as a whole. Because when I ask this question, I'm asking more about how the business is conducted. How has it changed in the last decade? You've been at this for awhile with 37 angels, you said is eight years old.
How is angel investing different now?
Angela Lee: I think one thing that's different is the. Folks who are participating in like angels theater was trying to excuse her. I think that it's, I don't like that. It's like sexy and cool, and that everyone knows what it is because the sheer number of angels and money and pre-seed is way too high.
A fun statistic is a decade ago. If you raised your seed or what then was like your senior year priest didn't exist, you had a one in three chance of raising your next round today. You don't like. Seven and 10% chance of raising your next round because that there are so many false positives because there's so much money in the early stage that frankly shouldn't be investing.
And it's terrible that we all have to look at way more deals and you have it's bad for investors. It's actually worse for founders because now they're wasting two years of their life for three years of their life. And an idea that never should've been.
MPD: How is what's driving this? Why is there so much more money game?
Angela Lee: to be shark tank is the most watched. I don't know how they categorize it, but the most watched family show. And so everybody thinks they can be more Cuban. And, I have Uber drivers pitching me ideas. And so I don't like that. People think it's like a get rich. Scheme on the entrepreneurship side and the venture side.
I mean, side, I think everybody thinks much like Bitcoin, right? Everyone is just oh, it's just a surefire way to become a billionaire next year. And I think they don't realize the work again on whether you're on the investor side or the founder side.
MPD: And a lot of people want to ask that question.
Also talk about how the bar is lower to get in the business. Angel list has helped. There's more infrastructure now. You know, it's funny, I take a positive view. I do think it's muddled, muddying the water for for people who are really yield oriented such as yourself. But what I do is I think I do believe it's opening the door to a lot of people who would not have considered entrepreneurship or investing and in getting them in the game.
And while I think the conversion from attempt to success will be lower if they're out of the blue. I think society is better with more people taking shots on goal, try to innovate, create new jobs for themselves, their family and their friends. So I have this hope that comes from it, but I don't know if it's, is it foolish?
Is it too far from efficient?
Angela Lee: I totally agree with you on the founder side. I don't agree. On the investor side. I don't know that having a ton more angel investors necessarily leads to better innovation, maybe. Maybe, but I'm glad it's entrepreneurial activity. I just wish there were fewer.
MPD: I think says the competitive investor, which
Angela Lee: I love something like in the last, not including 2020, there were like between 600 and a thousand new venture Splunk.
Those started each
MPD: year. Yeah. There's a lot of noise out there. And I think it's actually been just as it's been harder to be an angel. I think it's been harder to be an LP. There's so much noise coming at them and it's hard to distinguish which firms have a strategic advantage. Maybe depth of experience, just not as obvious as it used to be.
So the world is getting noisier that's for sure. We'll leave here on one last thought one last question for you. What is the most important thing you've learned as an investor? And this is a chance to leave a nugget behind for anyone listening to take something on with them that. Putting their own life,
Angela Lee: Supporting your founders.
I think that I like alliteration case you're kept out. And so if I think about the job as an investor, it's you source great deal flow use on select great companies to invest in, and then you support them. And I think people over-focus on that middle S which is it's all about picking the best companies, but if you don't have great songs that you're talking to, it doesn't matter how good you are picking.
You don't have a good pool to choose from, but then if you just write a check and you walk away, you're also not going to be a getting good deal for that being supportive investor, but you're just not helping those companies be successful. So I think spending more time supporting companies, but in a non-intrusive way, right?
I think Sanders don't need 25 angels. Being aggressively helpful, but how do you be helpful in a way that lets the founder feel supported? And that doesn't take away from their precious time.
MPD: Can you give an example of how you do that? How you help without big aggressive.
Angela Lee: The easiest way is most founders are writing kind of their investor updates. And there's always a how you can help. And I try to respond to every one of those emails and that's one. And then the other thing is literally just asking the question across our entire portfolio. And especially during COVID, we were doing, webinars around even like, how do you find for PPP low, like really tactical stuff.
I think sometimes people tend to like to think about I'm going to have with your strategy. Really high-brow intellectual stuff. And there's really boring stuff like around customer. We could have a whole thing around like customs that you wouldn't think about it. So I would say, and we talked to the very beginning about like fund administration.
Like I do believe that some of that boring stuff and helping people with that maybe it's like less interested in talking about at a cocktail party, but is really.
MPD: Thank you for doing what you do and you've helped a lot of people, I think both through the MBA program, but also 3,700. Thank you for that.
Thank you for taking time to be on the show. Thank
Angela Lee: you so much for having me.
MPD: What a great conversation. Big. Thank you to Angela for everything she does. And for joining me on the pod today, if you liked what you heard, please look us up with a like, or a five-star review and feel free to share with a friend. You can find me on Twitter at MPD. And to hear more of my conversations with innovators, subscribe on YouTube, Facebook, or any major podcast platform.
Just search for innovation with Mark Peter Davis.