Super-angels must be “making a buck”

Sep 24, 2010

Dan Primack was a senior editor at Fortune from 2010 to 2016. He was also the author of Term Sheet, Fortune's daily newsletter about deals and dealmakers.

Just when AngelGate looked to be cooling off, Ron Conway dumped a few gallons of lighter fluid on the Bin 38 crowd. In an email sent to attendees -- which included Conway partner David Lee -- Conway wrote, in part:

I want to clarify once and for all my total disagreement with your values and motives for being investors... I have stated consistently for year that I invest because I love helping entrepenuers and watching them learn and succeed...

The world of startups would be a better place if you spent less time complaining about deal structures, terms, vc’s, and valuations etc and the cars you drive, and just helped entrepenuers build their companies.

In my opinion your motives are driven by self serving factors around ego satisfaction and “making a buck". [sic]

In other words, Conway is saying that the primary job of super-angels is to help their entrepreneurs. He is wrong.<!-- more -->

Up until recently, most of Silicon Valley's super-angels were investing out of their own checking accounts. But that has begun to change, with folks like Mike Maples, Chris Sacca and Dave McClure tapping third-party capital to supplement personal capital. This trend even includes Conway.

Some of these folks clearly are interested in institutionalization (i.e., creating firms), while others simply wanted to reduce syndication headaches. What they all have in common, however, is a fiduciary responsibility to someone other than themselves. It must take priority.

To be clear, super-angels should not collude to fix prices. It's illegal. Moreover, becoming a successful super-angel is almost always predicated on becoming much more than a sugar daddy to entrepreneurs.

But all of that help and all of those introductions must be in ultimate pursuit of a single goal: Generating returns for your investors. Or, in the words of Ron Conway, making a buck.

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