Easy peasy lemon squeezy
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Seeking the Truth
A few years ago I’d go and see Fenella every few weeks. She’s simply the most wonderful person to talk to if you’re a bit stuck, and the drive to rural Wiltshire was a good opportunity to sit by myself in the car in silence and think about what I wanted to talk about. The drive home was the same but one of reflection.
Anyway, on the drive to my last session with Fenella I wondered what I could take away to help me if (when!) I was stuck in the future. She said to ask myself, “What about this situation is true?”. I wrote that in my notebook.
In the above book David begins by arguing that all progress is the result of the quest for good explanations. What we need to do to progress, he says, is search for the truth and figure out a good explanation of why that’s the truth.
What about [x] is true?
What does seeking the truth look like when it comes to angel investing? One, and perhaps the ultimate, question I ask is, “Should I invest?”. I.e. is it true that I should invest? Is this a good founder and good company to invest my own hard-earned cash into?
So getting to the truth is the goal. And the above is an especially handy question to come back to when my mind is fizzing with excitement and pressure, and when there are many pros and cons to think through during a potential deal.
That, “Should I invest?” question is probably the most difficult one to answer as an investor.
That question is of course made up of other questions, such as:
Is the founder rational or irrational?
Can they sustain success?
Can they learn and adapt?
Do they have grit and are they self-aware?
Not to mention questions about the market, the potential returns, the competition…
Make it easy
When I started angel investing all this got me thinking: How can I make that difficult question a really easy one to answer?
The answer, I’ve found, is to simply increase my reaction time.
In his book The Laws of Human Nature Robert Greene says that we don't see people how they are but we see them as they appear to us.
I’ve said before, everyone shows you who they are, you just have to wait.
Therefore, if you’re angel investing, I think that by increasing your reaction time (like you can when driving) could be the answer. It’s difficult as people are putting you under pressure to respond and you might think you have to appear smart straight away. But they’re doing that because that's in their interest.
You can’t increase your reaction time too much otherwise you’ll never get anything done but a sufficient pause for thought puts you in the driving seat.
The real trick though is to evaluate the truth of whether a founder is good before it becomes obvious to the rest of the world.
In other news
The next mtrx syndicate investment opportunity is EVware and they pitched to my syndicate tonight.
If you’re keen to join me in investing please get in touch with me on matthew@mtrx.vc
Important: None of these posts are investment advice. If you are thinking about investing you should seek the advice of a suitably qualified independent advisor.
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