First Funders

03: Angel vs VC, finding purpose and community in startup investing - Rachel Sheinbein

Feb 27, 2024

01:03:13

Rachel Sheinbein is an angel investor with over 250 startup investments. She shares her insights on angel investing and how it allows her to work with founders “even before the seed stage,” writing $25k checks into technology startups through her vehicle Very Serious Ventures. Later, Rachel discusses how building a community drives her investing strategy and lessons from memorable startup investments. Shaherose and Aamir kick off the show with a special message for founders who like to argue and end with their personal takeaways from the conversation with Rachel.

Highlights from our discussion:

Why Rachel chose angel investing over a partner position at a VC firm
What to look for in a quality angel group
Using a DAF to align with an investing purpose
Detecting founder passion and coachability
Defining your purpose

This is for information purposes only. This is not investment advice.

Topics

(00:00) - 03: Rachel Sheinbein, Angel
(01:14) - PSA: Your startup's users know more than Aamir the angel investor does
(02:51) - Rachel Sheinbein, angel investor and advisor
(04:56) - From engineering to venture capital to angel investing
(07:28) - Do angel groups and angel networks provide value to startup investors?
(13:23) - How Rachel aligns purpose and philanthropy with her early-stage startup investing
(16:08) - Rachel's first angel investment was in a gaming startup
(19:17) - Investor experience, startup luck, and Sequoia
(21:49) - How does an angel investor like Rachel measure bad outcomes in startup investments?
(24:53) - How angel investors operate differs from venture capitalists
(29:47) - Pitch decks - do they matter when seed investing so early?
(33:45) - Startup founder signals that matter to an angel investor
(40:47) - A climate tech seed investment that paid off quickly and returned funds
(46:39) - Very Serious Ventures angel invests $25k super early in founders
(48:51) - An exercise to help you become a better angel investor
(51:04) - Speed round, and the best book on strategy for startup founders
(52:59) - Our takeaways on better startup investing