If there’s anyone you should know and learn from about angel investing, it’s Ron Conway. He is one of the most iconic dealmakers of the angel investing world. In fact, journalist Gary Rivlin wrote a book (with many mixed reviews) about Ron Conway and named him as “the man who has placed more bets on Internet start-ups than anyone else in Silicon Valley”.
And that is a fact.
Ron is known for his early-stage investments in tech companies like Google, Airbnb, PayPal, and Facebook. Combined, his personal and partner investments over the past 15 years add up to over 700 deals. Many of the startups he invested in have gone on to become top rated Silicon Valley companies.
He started his career in the tech industry as a sales representative at National Semiconductor Corporation in the 1970s, and later on co-founded Altos Computer Systems which he took public on Nasdaq in 1982. He is also the founder and managing partner at SV Angel, and was ranked #6 in Forbes Magazine Midas list of top deal-makers in 2008, included in 2010’s Vanity Fair 100 most influential people in the Information Age, and awarded Best Angel at The 2009 TechCrunch Crunchies Awards.
Ron’s accomplishments don’t stop there however, he is actively involved in philanthropic work, serving on the boards of several non-profit organizations, including the UCSF Medical Foundation, the Ronald McDonald House, and the board of trustees for the University of California, San Francisco.
His investments: More than 100 personal investments including Flipboard, Adobe Fonts, Betaworks, Twitter, Rupture, Weebly, Loomia.
His exits: More than 58 exits including Twitter, Asana, Buddy Media, Kyte, ScanScout, Kaboodle, Kanjoya.
Latest investment: His latest investment was in a Series B round by Kumo.AI in September 2022.
In an interview on Soapbox, Ron advises founders not to go right into angel funding. “Use your credit cards, do anything you can so that by the time you go to angels you have built a working prototype and have some users. You'll likely be valued higher and will suffer less dilution.”
Read Ron’s emails with his top advice to founders and investors during previous downturns, where he shares what to do in order to survive difficult times.
Ron sees angel investing as a “hits business,” meaning that 1/3 of the companies he invests in with SV Angel fails, 1/3 of the companies return the money, and 1/3 of the companies return 4 or 5 times the investment.
He believes that entrepreneurship is genetic, so he would invest again in an entrepreneur that might have failed previously. From his observations, once someone has founded a company, they will carry on starting many more companies.
And this is where he is different in his investment thesis from other popular investors like Marc Andreessen. Ron invests in people first, idea second, and market size third. This is because the initial pitch idea is likely to change drastically over time and what’s important is to invest in the individual rather than the idea or current market size.
For him, entrepreneurs like Mark Zuckerberg, Shawn Fanning, and Jack Dorsey, are the Michael Jordans of startups. They are product visionaries who own the minds of their consumers.
There are two things, the first one is adding value to the entrepreneur. There are no quick hits and Ron is very serious about being an investor with integrity and not just looking for a quick hit.
The second one is investing in strength vs. lack of weakness, meaning, instead of checking the boxes for great idea, great founder, etc., he looks for startups that have extreme strength in an important aspect, so extreme that some of the weaknesses can be overlooked.
Check out one of the most educational videos featuring Ron Conway on Y Combinator, where he talks about what makes a founder successful.
Check out other incredible angel investors in our Angel Chronicles series.