Angel investing is plain hard: pay-to-play rounds by unappreciative venture capitalists, entrepreneurs getting fat & happy rather than creating an exit for their investors, getting stuck with rosy, outdated valuations, and the list goes on an on. Frank Peters interviewed veteran investor Charlie Hobbs to get at his observations, recommendations and conclusions. Great listening for entrepreneurs seeking to understand why they see provisions for redemption rights and board control…it is the job of these terms to align the long-term interests of founders and funders, and thus generate the promised outcomes. Glad to see Hobbs echo Clayton Christensen’s dictum for innovation capitalists to be “impatient for profits, patient for scale” though Clayton was more motivated by the information-carrying capacity of profits rather than gaining protection from downstream venture capitalists.
