Thread by @DavidAlade__

I want to be rich enough to do Angel Investing as @chamath does it.

At that very early stage of a company, it's very difficult to tell which one will win and which will not. In fact, a lot pivot of the startups pivots to doing something else different from what you invested in.

From a recent conversation with @villageglobal Podcast, @chamath said he doesn't spend much time deciding whether to invest in an early-stage startup.

If he meets you and sort of like what you are doing, he invests ”immediately.” Because what those startups are asking for

Is almost always less than $2m. In the scheme of things that too small for someone with a portfolio in billion dollars who have invested like $750m YTD.

But beyond the fact that it's small relative to what he controls is the idea of the power law.

It's easy to look at a company do all sort of analysis and checks and come to the conclusion that this should or may win.

But how much of the eventual win depends on the fact of your analysis as much as serendipity?

When I shared this tweet, what was going on in my mind was similar to @chamath’s point. The risk-return of early-stage investing is not so much as worth it as it used to be, Chamath’s point.

My point was simply this: if you can not assuredly pick a public company

https://twitter.com/davidalade__/status/1332333571831377922

with abundant of data to understand its business model and probable future how can you pick a startup with no data?

It boils down to gut and yes perceived understanding of the future and even with those, you can tell by what magnitude.

That's why power law is a thing in the venture world. Place a lot of bets and you can be close to sure of winning one mega success.

that's why wealth enough for one to close eyes and write a check of $1m is a massive advantage in my opinion.