This article originally ran in Term Sheet, Fortune’s newsletter about deals and dealmakers. Sign up here.
Jeff Fagnan believes that if you’re a startup founder, you have a social responsibility to become an angel investor — whether you want to or not. “We feel like if someone helped you, you need to pay it forward as well,” he told Term Sheet.
Fagnan, the founder and general partner of seed-stage venture capital firm Accomplice, is well known in the Boston startup ecosystem. The firm’s portfolio companies include AngelList, Carbon Black, DraftKings, Hopper, PillPack, Veracode, and Zoopla.
But he recently noticed something — startup founders are typically the ones who have the best deal flow and the best access to the hottest early-stage companies. The problem is that they often lack the capital necessary to be successful angel investors. Fagnan partnered with Naval Ravikant’s AngelList and formed Spearhead, a program that gives founders a $200,000 fund so they can start investing.
Fagnan spoke with Term Sheet about founders-turned-angel investors, his time working at a SoftBank affiliate fund, and how DraftKings is faring after its failed merger with rival FanDuel.
Accomplice is one of the most active early-stage firms in New England. You like to invest in companies based in Boston, New York, and Montreal. Why?
Over the last three years, we’ve been involved in 80 projects. New England has been the majority of our market with 50% of our activity there (primarily Boston and Cambridge). Eastern Canada has been a real hotbed, too. We are really impressed with the technical skillset coming out of the university system there, and we’ve invested in 16 companies across Montreal, Ottawa, Toronto, and Waterloo. That’s been surprisingly our No. 2 market.
Boston rivaled San Francisco early on as far as venture capital dollars, and then it missed out on the initial phase of the Internet as that gap was filled by San Francisco. There are a lot of great stories about companies like Facebook and Dropbox starting out here and moving out there.
We just saw this presentation recently that said, “Can you build consumer tech in Boston?” And we are investors in DraftKings, PillPack, and Hopper. Those are three incredibly strong consumer brands. Boston is on a resurgence right now. It needs several big tech companies that stand alone like an IBM or a Microsoft or a Google. And you need these mafias to come out of these types of companies and then be the next-generation angel investors, and next-generation entrepreneurs.
You invested in DraftKings’ seed round. Last year, the company’s proposed merger with rival daily fantasy sports site FanDuel unraveled over antitrust concerns. How is DraftKings doing now, and is it true they are considering an IPO?
They’re considering a bunch of things, and right now, I think they’re focused on continuing to grow market share. That’s one where we led the initial seed investment a long time ago. We were the very first investor, and we believed before anybody else. It’s an example of entrepreneur resilience and what [DraftKings CEO] Jason Robins has done is remarkable. They’ve matured a lot, and I think you’ll see DraftKings as a public company. One hundred percent.
I’m always wrong when I give answers about timing, so I won’t do that. [TS NOTE: Robins recently said an IPO won’t happen “for at least a couple of years.”]
You recently announced Spearhead, a program to fund and mentor new angel investors. What was the motivation behind turning founders into angel investors?
Naval [Ravikant] and I frequently have dinner and wine and talk about what’s going on, and then one day we had an observation. The observation was: It is not the celebrity angel investor who had the best deal flow and the best access. It was founders who wanted to back their close friends and people they felt were truly talented.
A lot of them contribute personal capital and mentorship despite the fact that they don’t have a whole lot in their bank account. So we looked at it as — the best people to be angel investors may not have the capital to be an angel investor. And we formed Spearhead to build a new subset of angel investors who don’t think of themselves as angel investors today because they don’t have the net worth. Let’s take the people who have been the most helpful with their mentorship and let’s help them get paid for that mentorship by actually being able to invest in the people they believe in the most.
How does Accomplice benefit from a program like this?
Too often in venture capital, people take short-term mindsets to things like, “How do I get dealflow? Is this a scout program?”
For us, we do not look at this as a scout program. We don’t have any rights to information. We just look at this as: This should exist. Right now, we believe there is a gap in the earliest stages of funding — right after friends and family — and venture capital is not filling it. So we think the best way to fill it is for founders to back other founders. We see this as good for the startup ecosystem.
What are three big mistakes founders make when they first start angel investing?
The first thing is for anyone who starts angel investing — you can’t just do a couple investments. You really have to look at it as a portfolio approach. A lot of people tend to say, “Oh, I tried angel investing and made a few investments, and it didn’t work.” Well, yeah. The odds are stacked against you, so you need to make sure that you’ll write enough checks so you have that diversity.
Another thing is that you can talk yourself out of any investment when you start looking at market dynamics and go-to-market models. You just need to bet on people that you truly believe in and people that are truly exceptional and mission-oriented around changing something. When you have conviction in people, you just invest.
The third thing is that if you are used to succeeding, you have to realize that it’s OK to fail because so many of these things will fail and it’s beyond your control. We want people to take a lot of risk and invest in things that will truly be transformative. If your first five investments don’t work, it’s OK. It’s all about how you went about investing that matters. This is a game defined by the outliers.
You used to be a partner at Seed Capital partners, which was an early-stage SoftBank seed fund in Boston. Given your experience there, what are your thoughts on what SoftBank is doing to the tech financial landscape through its $100 billion Vision Fund?
I don’t have all that much knowledge on the Vision Fund specifically. All I can say is that Masayoshi Son and SoftBank have a history of betting big and being right. People will take pot shots at whatever they do, but when Masa says, “I’m all in,” he’s the type of person who’s truly all in. And if you look at it from a track record perspective, it’s damn impressive what they’ve pulled off. Knowing Masa and what he’s been able to do over time, I would not bet against him. I definitely think he’s shaking things up in an industry where I always appreciate anyone who comes in with a differentiated, contrarian play. I think you need that no matter what.
How will some of these macro-investing trends, such as VC firms raising mega-funds and venture-backed companies staying private longer, affect early-stage startups in the long-run?
Innovation is a continuum. The companies coming out of MIT today and the companies we’re working with that are pre-product, they’re not even going to be thought about as being players in the market for another five to seven years. It’s hard for me to look out and think of what’s the macro-economic environment in five or seven years. If I had to focus too much on that, I probably wouldn’t do a single investment right now.
Companies are definitely staying private longer. In our latest fundraise for Accomplice II, our message to our LPs was: “We invest early, we’re patient capital. We know how to deliver a multiple on investment, but this takes time.” We’ve been in projects for 10 to 12 years. We believe in not selling out early.
You’re an investor in CoinList. What are your views on what’s happening with cryptocurrency and the blockchain at the moment?
We always find things that are going to be building blocks of the future. Blockchain and cryptocurrency are exactly those things for us. We’ve been investing a lot in cybersecurity, which has to do with authentication and identity. We’ve been investing in privacy.
We believe that blockchain and crypto are here to stay, and we are looking to invest in equity-based businesses that are doing blockchain applications for the future. We recently launched a small crypto hedge fund on our platform to continue to get flow on really interesting early-stage blockchain application companies. Whether those companies are going to go raise funds through tokens or equity, we just want to be involved in the ground floor of blockchain application. This technology could affect a number of industries from supply chain to insurance to real estate, and we want to be there.
文章最初刊登在术语表，幸运的简讯的交易和交易撮合者。在这里注册。Jeff Fagnan认为，如果你是一个创业者，你要有社会责任，成为一个天使投资者，不管你愿不愿意。“我们觉得如果有人帮助你，你也需要提前付款，”他在学期单上说。Fagnan，创始人和种子阶段的风险投资公司的帮凶的普通合伙人，是众所周知的在波士顿创业生态系统。公司投资的公司包括AngelList、炭黑、draftkings，霍珀，PillPack，Veracode，和Zoopla。但他最近注意到了一些东西：初创公司的创始人通常都是那些拥有最好交易流程和最有机会进入最热的早期公司的人。问题是，他们往往缺乏成功天使投资者所必需的资本。fagnan与Naval Ravikant的AngelList和形成的先锋，一个程序使创始人一个200000美元的基金，这样他们就可以开始投资。fagnan跟术语表创始人变成了天使投资人，他在软银附属基金的工作时间，以及DraftKings是如何表现其失败的收购竞争对手FanDuel后。共犯是新英格兰最活跃的早期公司之一。你喜欢投资于波士顿、纽约和蒙特利尔的公司。为什么？在过去的三年中，我们参与了80个项目。新英格兰已经占我们市场的大多数，我们在剑桥的活动占到了50%（主要是波士顿和美国）。加拿大东部也是一个真正的温床。我们真的有技术技能出来的大学制度有深刻的印象，我们已经投资了16家公司在蒙特利尔，渥太华，多伦多，和滑铁卢。这令人惊讶的是我们的2号市场。波士顿与三藩就投资美元，然后它错过了互联网的初始阶段，填补了三藩的空白。有很多伟大的故事，像脸谱网和Dropbox的公司开始在这里，并移动到那里。我们刚刚看到这个演示说：“你能在波士顿建立消费者技术吗？“我们的投资者在draftkings、PillPack、料斗。这是三个难以置信的强劲消费品牌。波士顿现在正在复苏。它需要几家像IBM、微软或谷歌这样的大技术公司。你需要这些黑手党出来的这些类型的公司，然后是下一代的天使投资人，和新一代企业家。你在DraftKings的种子轮投资。去年，该公司提出的收购竞争对手每天幻想体育网站FanDuel揭开反垄断担忧。DraftKings是怎么做的，和他们真的是考虑IPO？他们正在考虑一大堆事情，现在，我认为他们的重点是继续扩大市场份额。这是我们很久以前领导种子投资的地方。我们是第一个投资者，我们相信其他人。这是企业家能力例什么[ draftkings首席执行官] Jason Robins做了显著。他们已经成熟了很多，我想你会看到DraftKings作为一个公众公司。百分之一百。很快吗？当我给出时间的答案时，我总是错的，所以我不会这么做。TS说明：罗宾斯最近说，IPO不会发生“至少两年”。把创始人变成天使投资者的动机是什么？海军[ Ravikant ]我经常有晚餐和酒和谈论什么，然后有一天，我们有一个观察。观察结果是：不是名人天使投资人有最好的交易流程和最佳途径。是创始人想要支持他们的密友和他们认为真正有才华的人。他们中的很多有助于个人资本和指导，尽管他们不在他们的银行账户有很多。因此，我们认为，作为天使投资者的最好的人可能没有资本成为天使投资者。我们组建了一支天使投资人的新子集，他们今天不认为自己是天使投资人，因为他们没有净值。让我们把那些已经与他们的导师最有帮助的人，让我们帮助他们得到导师的，实际上能够投资的人，他们相信最薪。共犯如何从这样一个计划中受益？在风险投资太多，人们采取短期心态之类的东西，“我要如何设立？这是童子军计划吗？“对我们来说，我们不把这当作童子军计划。”。我们没有任何信息权利。我们只看如下：这应该存在。现在，我们认为，在最初的投资阶段有一个缺口，就是在朋友和家人之后，而风险资本并不能填补这一空白。所以我们认为最好的方法是让创始人支持其他创始人。我们认为这对创业生态系统是有好处的。创业者在开始天使投资时犯了三大错误？第一件事是任何人开始天使投资-你不能只是做一些投资。你真的必须把它看作一种投资组合方法。很多人倾向于说，“哦，我试过天使投资，做了一些投资，但它没用。”。赔率对你不利，所以你需要确保你会写足够的支票，这样你就有了这种多样性。另一件事是，当你开始关注市场动态并进入市场模型时，你可以说服自己放弃任何投资。你只需要在你真正信任的人身上下注，以及那些在改变某些事情上真正杰出和使命感的人。当你对别人有信心时，你只是投资。第三件事是，如果你习惯了成功，你必须意识到失败是可以的，因为很多事情都会失败，这是你无法控制的。我们希望人们冒很多风险，投资那些真正具有变革性的东西。如果你的前五个投资不起作用，没关系。这都是关于你如何进行投资的。这是一个由离群值定义的游戏。你曾经是种子资本合伙人的合伙人，这是波士顿早期的软银种子基金。鉴于您的经验，您对软银通过其1000亿美元的愿景基金对科技金融业的看法是什么？我对视觉基金的了解不多。所有我能说的是，Masayoshi Son和软银有一个很大的赌注和正确的历史。人无论做什么都会带枪，但当蔡升晏说，“我所有的，“他是真正的所有人的类型。如果你从一个记录的角度来看它，那是非常令人印象深刻的，他们已经摆脱了。知道蔡升晏和他所能做的时间久了，我就不看好他。我确实认为他在一个行业里不断动摇，我总是很欣赏任何一个有差异的、逆向游戏的人。我认为不管怎样你都需要。这些宏观投资趋势，如风险投资公司筹集巨额资金和风险投资公司，长期保持私有化，将如何影响长期创业？创新是一个连续统。今天从麻省理工学院出来的公司和我们正在合作的公司都是前期产品，他们甚至不会被认为是在市场上再打五到七年的球员。我很难看到五年或七年的宏观经济环境。如果我不得不过于专注于此，我可能现在就不会做一笔投资了。公司肯定会长期呆在家里。在我们最新的筹款为共犯II，我们对LPS的信息是：“我们早期的投资，我们耐心的资本。我们知道如何提供投资的倍数，但这需要时间。“我们已经进行了10到12年的项目。我们相信不早卖出去。你是一个投资者在coinlist。你此刻的cryptocurrency blockchain的事情有什么看法？我们总是发现一些东西将成为未来的基石。Blockchain和cryptocurrency恰恰是那些事情。我们在网络安全方面投入了大量资金，这与认证和身份有关。我们一直在投资隐私。我们相信blockchain和密码都留在这里，我们正在寻找投资于股权的企业，做为未来的blockchain中的应用
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