Addict? I am a recovering equity angel investor.

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Addict? I am a recovering equity angel investor.

Like most addictions, the hardest thing is to admit to the addiction and then look for medication, counselling or an alternative path.

So, I have found the inner belief and confidence to admit to my issues.

I am a recovering equity angel investor. Thankfully, I have found tokenomics and tokens and am in a sustained period of recovery, and I am confident that I will not return to my past habits.

I have suffered with the equity illness both as an investor and as a founderlooking to raise capital. You might wonder what are the symptoms?

Investor

Let’s start with my investor hat on:

  • Drawn to investments initially forecasting a 3 to 5-year exit via Trade Sale, IPO, etc …
  • Waiting 5 years and being not much closer to that Trade Sale, IPO or liquidity event
  • Getting that familiar call, would you like to follow up, generally not growth capital but to keep the wolf away from the door
  • I have no liquidity…
  • I have voting shares, I have 2% of the equity, best use those share certificates for toilet paper, my vote doesn’t count…
  • Having paper gains based on secondary raises and new valuation, but no way to cash them in
  • Losing paper gains as a trial fails, new tech comes from nowhere and knocks you out
  • The good old “pivot”, and I find I am invested in something that is way different to what I invested in. I have no clear idea why it has been ‘pivoted’
  • VC comes in and want excessive protections, Board positions for the ‘risk’ capital and network they bring with them
  • VC is like a bulldog on when the exit should be to suit his IRR target, not what may be best for other shareholders
  • Ah, just to makes sure I don’t forget again – I have no liquidity!

Founder

Now with my founders’ hat on:

  • Only have runway of 9 to 18 months, if lucky
  • Continuously thinking about the next funding round so I can pay the payroll in 6 months
  • Spending time on presentations, investor calls, ‘doing’ the circuit trying to get 250k
  • Not making best use of my time. I am not a closer of deals, that not my skill
  • Cannot get the good hires. Who wants to work with a company that might not pay the payroll in 3 months?
  • Running out of liquidity on minimal salary, eating baked beans on toast
  • Get sick with bad diet and stress of looking for money

There are many other symptoms, but for the others out there, these may help you recognise the illness and come to terms with it.

I had much counselling, many discussions, made a lot of research and saw a way out. I came across a thing called a token. I am in the recovery phase.

I have recovered to a level where I am no longer an investor, but a contributor. It feels better. Why?

  • I don’t pretend, I contribute and purchase tokens mainly as speculation
  • I want liquidity and a token, if chosen carefully can give me that
  • When and if my paper profit is 100%, I can TAKE SOME PROFIT, does that feel good, too dam right
  • If the company fails a trial, gets overtaken when I have TAKEN PROFIT do I care, no from a financial point of view and yes if it’s a good team who have worked smart and hard and been hot with bad luck
  • If the company is slow or pivoting and I don’t get it, what can I do, I don’t have a vote? Hey, I have a better tool, I bail out and turn the tokens into cash rather than wait for a slow 5-year death. I have taken a 40% hit, so what, I have 60% left to play another day
  • The business might be working very well, this token thing is good, its used to incentivise community and users, marketing is direct and effective
  • Funding risk is gone, company is funded for 2 to 3 years, team is working on the business not raising the next 500k
  • There are new risks, exchange risk and execution risk. One is new and can be addressed and solved, one is the same as I had when I had my illness

Now looking as, a founder who is looking for funds to build a business, a token feels better

  • I can sleep at night, I have enough funding to hit milestones and to execute
  • No VC sat on my shoulder trying to call the shots and pushing for an exit to hit their IRR requirement
  • It’s great to use the token as a tool to drive engagement, push Meltcalfe, get the token flywheel spinning
  • There is a community of followers of the company, a team of influencers and marketers who do it because they like the project, some are token holders, some just want to ‘be involved’ with a project they like
  • The ‘competitors’ to me want to discuss and talk and from partnerships to grow the sector or niche
  • The unknown is how and what will happen with M and A with a token in the mix

My medicine is working, I feel good. I have reignited energy and passion. I am sure it will take a few more years to use the American term I hate ’find closure ‘ on my past illness while I wait for the trade sales or IPO’s.

I would recommend anyone who sees signs of the illness to look at the indicators, see if you can take the step forward and take the token medicine.

PLEASE DO YOUR OWN RESEARCH, BUT DO NOT JUST LISTEN TO THE TOKEN DOOMSDAY BRIGADE. AS I KEEP SEEING ON VIDEOS ‘SEE YOU ON THE OTHER SIDE’

Please also not the tongue in cheek nature, I am very happy with the equity investment I have generally and would not want any of the founders I have invested in to read this is the wrong way!!

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