Welcome to another edition of Business Twitter, where we collect the best tweets to come out of Silicon Valley so you don’t have to. This article is part of a newsletter — if you want a weekly Business Twitter roundup sent to your inbox every Friday, subscribe here.
This week: AngelList announces its newest feature, Deal Partners, why angel investing could be easier than joining a VC firm, why VCs benefit in the long run from a startup with lower returns, and some reminders on why the world is a better place than we think, via writer Bill Bryson.
1. AngelList’s Deal Partners
Startup job platform AngelList announced a new feature called Deal Partners on Wednesday. In a tweet, the company explained that the feature lets funds share carry on individual deals with anyone, and that it could be used for identifying great companies and securing an allocation. Deal Partners is ideal for investors who need to add partners to a fund.
Investors immediately began buzzing about the feature. Anthony Pompliano tweeted, “AngelList is the largest venture fund in the world.”
Romeen Sheth tweeted, “[AngelList is] changing the face of venture capital one block at a time.”
Gagan Biyani tweeted, “Sometimes I wish I had time to invest / run a fund just so I could use AngelList more regularly. The pace and impact of innovation is astounding.”
2. Want to be a VC? Be an angel instead
Angel investor and VC at Form Capital Bobby Goodlatte gets asked about the world of venture capital a lot. His advice on how to break into the industry is contrary to conventional wisdom: don’t work for a venture firm. Instead, become an angel investor.
“I meet a lot of new grads who ask how to break into VC,” Goodlatte tweeted. “My general advice is: don’t. Work at a breakout-stage co. Get an exit. Then angel invest. You’ll be in control of your destiny & net better returns. 100% ownership of checks is better than 20% split across a partnership.”
“And if you think working entry-level at a VC firm is a lower-risk proposition than trying to identify the next inflection-point breakout company: you’re really not cut out for this business,” he added.
3. A Tale of Two Startups
Roy Bahat, head of VC firm Bloomberg Beta, has some counterintuitive wisdom on why it’s better for founders to raise less money early on in their startup journey. In a tweet thread, Bahat shared what he called “A Tale of Two Startups.”
“Company #1: A VC invests $1, and 10 years later, receives $1,000,” Bahat wrote. “Great investment! Company #2: A VC invests $1 in an identical company, and 10 years later, receives $800. (Still great, if a lower return.) Still, many VCs would prefer company #2. Why??”
“Imagine Company #1 only ever raises that first funding round, and Company #2 raises more money on an ever-higher valuation every 18 months like a clock.”
Bahat wrote that Company #2 would be a wiser investment for a VC because “later fundraises are the closest thing to proof of success prior to exit” and because it can be easy to raise additional funds later on.
4. Lessons from the world of medicine
Managing Partner at Upfront Ventures Mark Suster tweeted about one of his favorite writers, Bill Bryson. Bryson’s 2019 book, The Body: A Guide for Occupants, is a readable tour through the inner workings of the human body, but its lessons are universal.
“I am reminded of a few facts obvious to anybody who reads history,” Suster wrote. “The 1st is … the world is a MUCH better place than we tend to think (due to media) with life quality & expectancy massively up.”
Suster’s takeaways touch on the overabundance of medical screening, modern science’s unwillingness to accept medical breakthroughs, and the value of vaccinations in history: “The huge leap in human longevity is driven by VACCINATIONS and the reduction of: measles, rubella, TB, typhoid, smallpox, etc. We die of lifestyle choices (heart disease, lung disease, kidney disruption) > infectious disease and at a much older age.”