Investors should have a “No Dickheads” policy
Part of my success as an angel investor has been to have a “No Dickheads” policy when it comes to choosing founders to back.
Don’t be tempted by the $$$
Even if you’re certain a dickhead founder is going to make you lots of money, don’t invest in the company. Karma catches up with all dickheads eventually, but usually it catches up with those around the dickhead first. So long before the dickhead who caused all the problems gets what’s coming to them, you’ll be taken down by the karma wave. I’ve learned this lesson the hard way.
What will people think?
People judge you by the company you keep. Trying to help the dickheads in your investment portfolio is going to make you look like a dickhead. Whereas helping good people makes you look like a good person. Furthermore, the best way to be introduced to good people is to associate yourself with other good people.
You won’t do your best work
The primary function of an angel investor is to be part of the team; to help. If you don’t look forward to every chance to talk to a founder, you’re not going to work as hard, or as effectively, as you might if you really cared about who they are and what they’re trying to achieve. You won’t stick your neck out, you’ll be less likely to risk your own reputation in order to make a valuable warm intro, help with an important sale, or even just wholeheartedly endorse the startup and the founders.
That all adds up to your investment being less likely to succeed.
Some investors believe the biggest financial returns come from backing the dickheads — the selfish, those with a flexible relationship to the truth, or lacking a moral framework, and sure, maybe you’ll remember the dickheads who make you a lot of money.
I will remember every good person I tried to help — both those who made me money and those who tried to do good for the world.
I might also remember that you backed a dickhead and wonder if maybe you’re actually a dickhead too.