The great angel leader and journalist George Mcquilken kindly did a summary of some thought provoking suggestions from Paul Graham for angels to stay relevant.
If there were a reputable investor who invested $100k on good terms and promised to decide yes or no within 24 hours, they’d get access to almost all the best deals, because every good startup would approach them first. It would be up to them to pick, because every bad startup would approach them first too, but at least they’d see everything. Whereas if an investor is notorious for taking a long time to make up their mind or negotiating a lot about valuation, founders will save them for last. And in the case of the most promising startups, which tend to have an easy time raising money, last can easily become never.
Should angel groups consider experimenting with this philosophy? Maybe running a 1-2 day event based on these terms? Paul Graham implies that a 24-hour turnaround would be amazing. Best practices from the Angel Resource Institute show that putting in 20 hours of due diligence is highly correlated (not necessarily causal!) with high ROI. If angels organized well, could they do about 20 hours of DD in a day or two?
Love to hear your thoughts!