The classic model in angel investing goes something like this: You look at a large number of potential companies and winnow them down to a handful of the best companies and invest a relatively large amount in each of them.
Will the model give you great returns? I don’t think so.
The success of this model depends on your ability to pick winners. You probably can’t. I don’t mean that there is something wrong with your selection skills. But that when outcomes are truly uncertain, human beings can’t pick winners and losers. The information they need to make these choices doesn’t exist.
