From Angel to VC: A Whole Different Game
From Angel to Venture Capitalist: Rethinking Value Creation and Building for the Long Term
“With great power comes great responsibility” - Marvel's Amazing Fantasy #15 (1962)
The transition from angel investor to venture capitalist isn't just about managing more money—it's about fundamentally transforming how you think about value creation in early-stage companies. While angel investing rewards quick decisions and emotional intelligence, venture capital demands systematic thinking and strategic patience. This evolution has taught me that success in VC requires not just a change in tactics, but a complete reimagining of the investor's role.
Moving into VC required me to rethink everything: from how I manage ownership, to the way I allocate resources, to how I approach relationships with founders. While challenging, this transition has fundamentally reshaped my approach to investing.
The Mathematics of Ownership
As an angel, I was content with small ownership stakes, typically 1-2% across dozens of companies. The mathematics of venture capital, however, demanded a complete reset of this thinking. A typical $100M fund needs a 3-4x return to be successful. When spreading investments across 20-25 companies, each successful exit needs to return the equivalent of the entire fund. This fundamental reality drives the need for substantial ownership stakes of 10-15% in early rounds, and more importantly, it requires maintaining or increasing those stakes through follow-on rounds.
This isn't just about percentages—it's about having enough influence to help shape outcomes. When you own 15% of a company, you're not just an investor; you're a partner in building its future. This level of ownership brings both the responsibility and the ability to significantly impact the company's trajectory.
Reserve Strategy: A Framework for Follow-on Investment
Our reserve strategy has evolved from the opportunistic approach of angel investing to a systematic framework for decision-making. As an angel, my follow-on investments were ad hoc, based on available capital and immediate opportunity. Venture capital demands a more structured approach.
We divide our fund's capital equally between initial investments and reserves. This even split ensures we can support our companies through multiple rounds while maintaining the discipline to make new investments. The reserve allocation isn't just about having dry powder—it's about creating optionality to double down on winners and protect our ownership in promising companies.
The first six months after investment are crucial for initial assessment. During this period, we closely track key metrics, evaluate product-market fit signals, and monitor burn rate and runway. These early indicators help shape our follow-on strategy. Between six and eighteen months post-investment, we make critical decisions about follow-on funding. The top performers in our portfolio receive aggressive follow-on investment, while we maintain our pro rata rights in companies showing steady progress. In cases where companies struggle to meet expectations, we make the difficult decision to release those reserves for other opportunities.
The Evolution of Founder Support
The VC-founder relationship requires genuine engagement that goes far beyond the occasional check-in typical of angel investing. Having been a founder myself, I understand the importance of being accessible without being overwhelming. Our interactions flow naturally—sometimes it's a quick text about a challenge, other times it's a spontaneous call to discuss an opportunity. This fluid communication style helps maintain real connection while respecting founders' time and headspace.
Early on, I realized that great mentorship comes in different forms. Sometimes it's listening and asking the right questions. Other times, it's sharing similar experiences I've had as a founder or seen in other companies—the challenges faced, mistakes made, and lessons learned. For example, one founder I worked with faced a tough choice between doubling down on their current strategy or pivoting to address a larger opportunity. Instead of pure advice, I shared a similar pivot decision I'd faced as a founder, and together we explored the risks and potential rewards of each path. The most valuable conversations often come from this mix of shared experience and collaborative problem-solving.
Our support spans strategic planning, market insights, and financial strategy. We help companies think through market positioning, competition analysis, and growth trajectories. Through our network, we can connect founders with potential candidates, customers, and partners when relevant. Perhaps most importantly, we provide guidance on fundraising strategy, cash flow management, and eventual exit planning.
Building for the Long Term
Creating lasting value in venture capital requires building strong institutional knowledge and processes. We've developed systematic approaches to deal flow management, portfolio support, and network development. These systems help us maintain consistency while allowing for the flexibility needed in early-stage investing.
The venture capital landscape continues to evolve, with new opportunities and challenges emerging regularly. We're seeing innovations in funding structures, investment strategies, and support models. Technology is changing how we evaluate companies, manage portfolios, and add value to our investments. Yet the fundamental principles remain constant: back exceptional founders, maintain discipline in decision-making, and create value through active partnership.
Looking Forward
The journey from angel to VC has been a profound evolution in how I think about and practice early-stage investing. It's taught me the value of systematic thinking, the importance of reserve strategy, and the power of structured support. Yet at its core, the work remains unchanged. We still seek to back exceptional founders building transformative companies. We still aim to be valuable partners in their journey. The difference lies in how we execute—with more discipline, better processes, and a longer-term perspective.
What excites me most isn't just finding the next big company—it's working with founders who see opportunities others miss, who have the courage to pursue bold visions, and who are driven to solve real problems. My role is to support them with both the tactical and emotional aspects of company building, drawing from my own founder experience and the lessons learned from working with dozens of startups.
That’s the mission, and it’s what drives me every day.