Angel Investing Playbook….That's Absurd!

I say ‘that’s abusrd’ a lot when I talk about the stock market.

The stock market is an absurd, mystical, living, breathing monster that feeds on our energy.

As absurd as the market can be, so to is the life of an entrepreneur and investor.

The best ‘TELL’ I know for angel investing is to double down when I utter ‘that’s absurd‘!

My biggest mistakes of the last few years are from private investments that I shunned for ‘ABSURD’ valuations. The only thing that has been absurd is the returns I have left on the table.

I have made two MONDO mistakes the last few years and none of them are stock market related. All of them were teed up.

1. Fred Wilson offered me an early stage investment in Twitter and I asked “what price?”. When I heard the price I responded…’Are You Absurd’!? Let’s also just say that at the time, I wrote a post that Twitter was for Twits . Today they closed on $100 million at a $1 billion valuation. At least I have the $TWIT stream…

Oy.

2. When Mark Pinkus was was creating Zynga and pitching me the early iteration, I told him I was in and good for a piece. By the time the official round got going, Fred Wilson called and offered me a piece and I asked “what price?”. When I heard the price I responded…’Are You Absurd!?’ . Today….OY. I heard that Farmville ( a new Zynga game ) had 15 MILLION players the other day. At least I never wrote a post ‘Is Zynga for ZITS’…so that’s a consolation.

The lesson…

I am a putz.

PS – I was lucky/smart enough to invest in Betaworks which started Summize which was purchased by Twitter…so booyah!

PSS – The genius that took my Twitter investment…Jeff Pulver . He’s a gentleman and always lets me in free to his twitter conferences. Really.

115 comments

  1. i love bessemer as they funded lifelock right after me so there is some justice.

    that webpage of theirs is an olddd favorite and inspirational in its truthiness. thanks for reminding me.

    I need to add a page like that to our social leverage site.

  2. i love bessemer as they funded lifelock right after me so there is some justice.

    that webpage of theirs is an olddd favorite and inspirational in its truthiness. thanks for reminding me.

    I need to add a page like that to our social leverage site.

  3. howardlindzon says:

    i love bessemer as they funded lifelock right after me so there is some justice.

    that webpage of theirs is an olddd favorite and inspirational in its truthiness. thanks for reminding me.

    I need to add a page like that to our social leverage site.

  4. chris dixon says:

    I hear you. We could all list our anti-portfolio. I spend far too much time thinking about the deals I missed. I'd feel pretty good if I were you having Lifelock among other good investments.

  5. howardlindzon says:

    I have some classics that I chased and missed and were meltdowns I should write about soon…but nothing that makes up for these two meltups

  6. chris dixon says:

    Probably mortals like me should just try to get into every Fred Wilson deal and not try to cherry pick. That guy is a force of nature.

  7. howardlindzon says:

    the third fred wilson deal i will likely regret is foursquare. i could have done that way early but alas…i am the mayor of putzville.

    lets grab a drink next time i go through nyc

      • Anonymous says:

        CORRECTION: When you are successful with Stocktwits. :) I cannot image you actually doing a triple lindy, but if you do a triple lindzon. Make sure you post it. Loved to see Fred’s anti-portfolio. Does he even have one. The way folks talk about him here, he seems like a lucky buddha and a blessed rain-maker combined. Never met the guy, but if I do; you think he would mind if I rubbed his belly. :)

      • Anonymous says:

        CORRECTION: When you are successful with Stocktwits. :) I cannot image you actually doing a triple lindy, but if you do a triple lindzon. Make sure you post it. Loved to see Fred’s anti-portfolio. Does he even have one. The way folks talk about him here, he seems like a lucky buddha and a blessed rain-maker combined. Never met the guy, but if I do; you think he would mind if I rubbed his belly. :)

  8. chris dixon says:

    I hear you. We could all list our anti-portfolio. I spend far too much time thinking about the deals I missed. I’d feel pretty good if I were you having Lifelock among other good investments.

  9. chris dixon says:

    I hear you. We could all list our anti-portfolio. I spend far too much time thinking about the deals I missed. I’d feel pretty good if I were you having Lifelock among other good investments.

  10. chris dixon says:

    I hear you. We could all list our anti-portfolio. I spend far too much time thinking about the deals I missed. I’d feel pretty good if I were you having Lifelock among other good investments.

  11. Anonymous says:

    Outstanding post. Thanks for telling it like it is. I sit in meetings with investors and they say “That’s Absurd” too and I just shake my head sometimes…isn’t that the point, make a bet on a deal because it just might make it big and the innovation needs to be in the market?

  12. Anonymous says:

    Outstanding post. Thanks for telling it like it is. I sit in meetings with investors and they say “That’s Absurd” too and I just shake my head sometimes…isn’t that the point, make a bet on a deal because it just might make it big and the innovation needs to be in the market?

  13. gbattle says:

    I swear, reading Howard and Chris exchange tales is classic material. The above post, a gem. Somebody needs to just go out there and build a “Greatest Misses” site, battle of the antiportfolios.

  14. gbattle says:

    I swear, reading Howard and Chris exchange tales is classic material. The above post, a gem. Somebody needs to just go out there and build a “Greatest Misses” site, battle of the antiportfolios.

  15. gbattle says:

    I swear, reading Howard and Chris exchange tales is classic material. The above post, a gem. Somebody needs to just go out there and build a “Greatest Misses” site, battle of the antiportfolios.

  16. gbattle says:

    I swear, reading Howard and Chris exchange tales is classic material. The above post, a gem. Somebody needs to just go out there and build a “Greatest Misses” site, battle of the antiportfolios.

  17. karenrands says:

    Outstanding post. Thanks for telling it like it is. I sit in meetings with investors and they say “That's Absurd” too and I just shake my head sometimes…isn't that the point, make a bet on a deal because it just might make it big and the innovation needs to be in the market?

  18. gbattle says:

    I swear, reading Howard and Chris exchange tales is classic material. The above post, a gem. Somebody needs to just go out there and build a “Greatest Misses” site, battle of the antiportfolios.

  19. Ross says:

    CORRECTION: When you are successful with Stocktwits. :) I cannot image you actually doing a triple lindy, but if you do a triple lindzon. Make sure you post it. Loved to see Fred's anti-portfolio. Does he even have one. The way folks talk about him here, he seems like a lucky buddha and a blessed rain-maker combined. Never met the guy, but if I do; you think he would mind if I rubbed his belly. :)

  20. Paul Jozefak says:

    Someone kind of alluded to this below. Isn't the moral of this story to basically shut off your brain when Fred comes calling and just tag along on every deal he offers you. Vice verse, whatever you look at, show him. If he invests than you're in the clear to do so yourself. Just sayin'…. :)

  21. howardlindzon says:

    i did ask Fred to invest in stocktwits si their could be an anti anti reverse triple lindy portfolio if I am successful with stocktwits

  22. LIAD says:

    Self deprecation and humility are great things.

    We're all Putzes – its just that some people dont have the balls to admit it.

    Investors haven't made a dime yet out of either Twitter or Zynga – and however unlikely it might seem now, they may never do so.

    Whats the opposite of not counting your chickens before they hatch?

  23. Joe Carter shoestring jack says:

    Howie, just spray and pray. It works for Ron Conway. The only thing about Conway that most people don’t like is his view that an entrepreneur should NEVER see any liquidity during the growth of the business (until M&A).
    On the other hand I think Howie thinks there’s no need to raise more than $40k for any start up and the company needs to be generating some revenue. Though he broke his own rule for Stockwitz.

    I’m now confused. I need to go grab a cocktail.

  24. Joe Carter shoestring jack says:

    Howie, just spray and pray. It works for Ron Conway. The only thing about Conway that most people don’t like is his view that an entrepreneur should NEVER see any liquidity during the growth of the business (until M&A).
    On the other hand I think Howie thinks there’s no need to raise more than $40k for any start up and the company needs to be generating some revenue. Though he broke his own rule for Stockwitz.

    I’m now confused. I need to go grab a cocktail.

  25. Joe Carter shoestring jack says:

    Howie, just spray and pray. It works for Ron Conway. The only thing about Conway that most people don’t like is his view that an entrepreneur should NEVER see any liquidity during the growth of the business (until M&A).
    On the other hand I think Howie thinks there’s no need to raise more than $40k for any start up and the company needs to be generating some revenue. Though he broke his own rule for Stockwitz.

    I’m now confused. I need to go grab a cocktail.

  26. Joe Carter shoestring jack says:

    Howie, just spray and pray. It works for Ron Conway. The only thing about Conway that most people don’t like is his view that an entrepreneur should NEVER see any liquidity during the growth of the business (until M&A).
    On the other hand I think Howie thinks there’s no need to raise more than $40k for any start up and the company needs to be generating some revenue. Though he broke his own rule for Stockwitz.

    I’m now confused. I need to go grab a cocktail.

  27. Pingback: Friday links: rush into bonds Abnormal Returns
  28. Joe Carter shoestring jack says:

    Howie, just spray and pray. It works for Ron Conway. The only thing about Conway that most people don't like is his view that an entrepreneur should NEVER see any liquidity during the growth of the business (until M&A).
    On the other hand I think Howie thinks there's no need to raise more than $40k for any start up and the company needs to be generating some revenue. Though he broke his own rule for Stockwitz.

    I'm now confused. I need to go grab a cocktail.

  29. Paul Jozefak says:

    Someone kind of alluded to this below. Isn’t the moral of this story to basically shut off your brain when Fred comes calling and just tag along on every deal he offers you. Vice verse, whatever you look at, show him. If he invests than you’re in the clear to do so yourself. Just sayin’…. :)

  30. Paul Jozefak says:

    Someone kind of alluded to this below. Isn’t the moral of this story to basically shut off your brain when Fred comes calling and just tag along on every deal he offers you. Vice verse, whatever you look at, show him. If he invests than you’re in the clear to do so yourself. Just sayin’…. :)

  31. LIAD says:

    Self deprecation and humility are great things.

    We’re all Putzes – its just that some people dont have the balls to admit it.

    Investors haven’t made a dime yet out of either Twitter or Zynga – and however unlikely it might seem now, they may never do so.

    Whats the opposite of not counting your chickens before they hatch?

  32. LIAD says:

    Self deprecation and humility are great things.

    We’re all Putzes – its just that some people dont have the balls to admit it.

    Investors haven’t made a dime yet out of either Twitter or Zynga – and however unlikely it might seem now, they may never do so.

    Whats the opposite of not counting your chickens before they hatch?

  33. LIAD says:

    Self deprecation and humility are great things.

    We’re all Putzes – its just that some people dont have the balls to admit it.

    Investors haven’t made a dime yet out of either Twitter or Zynga – and however unlikely it might seem now, they may never do so.

    Whats the opposite of not counting your chickens before they hatch?

  34. LIAD says:

    Self deprecation and humility are great things.

    We’re all Putzes – its just that some people dont have the balls to admit it.

    Investors haven’t made a dime yet out of either Twitter or Zynga – and however unlikely it might seem now, they may never do so.

    Whats the opposite of not counting your chickens before they hatch?

  35. Anonymous says:

    Dude, the portfolio you DID put into looks great, so you are doing well! Anyone doing as many deals as you do is bound to have them.

  36. Anonymous says:

    Dude, the portfolio you DID put into looks great, so you are doing well! Anyone doing as many deals as you do is bound to have them.

  37. Anonymous says:

    Dude, the portfolio you DID put into looks great, so you are doing well! Anyone doing as many deals as you do is bound to have them.

  38. jameshong says:

    Dude, the portfolio you DID put into looks great, so you are doing well! Anyone doing as many deals as you do is bound to have them.

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