Ask an Angel with Zach Coelius: moving to SF, bubble/recession potential, post-COVID funding | E1172

TL;DR

Zach Coelius shares his experiences as an angel investor, discussing his investment strategies and the importance of finding great founders over great ideas.

Transcript

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Key Insights

• 🔬 Investing in great founders is more important than investing in great ideas.
• ❓ The ability to recognize and address one's weaknesses as a founder is a crucial skill.
• 👋 Crowdfunding can be a good indicator of product-market fit but needs to be assessed in the broader context of the market.
• 😇 The legalization of cannabis on a federal level in the US would open up new opportunities for angel investing in the sector.
• 🥺 The ability to execute and lead effectively is a crucial quality for a founder to attract VC investment.
• 🤗 Great founders are self-aware and open to learning from their mistakes.
• ☠️ The balance between take rate and market dynamics depends on the specific market and competition.

Questions & Answers

Q: What is the average check size for a company you invest in now and how has it changed over time?

Coelius has a barbell strategy, with early-stage checks ranging from $200k to $1 million and later-stage checks from $2 million to $5 million. Initially, he started with $200k checks and has seen an increase in check sizes over time.

Q: Do you invest via syndicates or directly from your fund?

Coelius has three vehicles for deploying capital: his $45 million fund, a rolling fund for friends and family, and a syndicate on AngelList. The syndicate has been particularly useful, as it brings deals and helps with due diligence.

Q: Is it worth moving to San Francisco as a young entrepreneur?

Coelius believes that despite the challenges, San Francisco still offers unparalleled density of smart people in technology. While rents have gone down, the startup ecosystem and networking opportunities are still strong.

Q: Do you believe the private markets are less speculative than the public markets?

Coelius disagrees and states that the private markets are still "bunkers" with high valuations and fast-growing companies. He believes that the long-term trend in technology is positive, but acknowledges that there will be ups and downs, including recessions.

Summary & Key Takeaways

• Zach Coelius has been an angel investor since 2015 and has invested in around 50 companies.

• He deploys capital through his $45 million fund, a rolling fund for friends and family, and a syndicate on AngelList.

• Coelius emphasizes the importance of finding a balance between investing in great founders and great ideas.