Add Specialized Value or Get Out🔬

Happy Thursday.

This week I'm thinking about how specialized angel groups are crushing it, how things being super hard to pull off can actually be a competitive advantage (especially in hardtech), and how you never create value faster than during a negotiation.

Here are three things on my mind, plus some reads I think you'll enjoy.

🔖Bookmarks of the Week

1. Mythbusters: Startup Edition🧐| Andre Retterath & Jerome Jaggi @ (link)

2. “The Great Commoditization” | A Strategy Memo for Humans📉| Packy McCormick @ (link)

3. Incredible Breakdown of the USV Strategy🧠| Mario Gabriele @ (link)

🔍Three Things On My Mind

1. Add Specialized Value or Get Out🔬

Last week’s episode with Paul O'Brien featured a blistering criticism of the “passive” and “generalist” angel. This pattern highlighting the importance of “value-add”, which I first highlighted in my “Best of 2024” post, has been on my mind a lot this week thanks to Paul.

I’ve heard from angel group leader after angel group leader how frustrating it is to see a member join, throw some money into a few deals they liked, and then quit after the 1st year because they got bored or couldn’t engage the way they wanted. I also see tons of groups struggling to effectively activate the expertise of their membership.

Contrast that with Medical Mondays, a collaboration put together by the TCA Venture Group with the help of Small Business Development Centers (SBDC) in Austin TX and Octane in Irvine CA. The collaboration is between angels groups, early VCs and hospitals. Every single week, a few dozen angels who are experts in various medical professions gather to hear startup pitches. Not dissimilar from the typical angel group.

But here’s where things diverged from “the usual”: I recently got to observe this community, and let me tell you, every single person on that call could add crazy value for any startup presenting. Pediatricians. ER doctors. Hospital execs. Analysts for healthcare VCs. All in the room. This is a group you need to pitch if you’re part of the ~30% slice of the startup ecosystem focused on developing new medical technologies. That room was no more than 1 or 2 connections away from a world class expert on just about anything a founder could throw at them.

I’m becoming more and more convinced this is what great angel investing looks like. Highly specialized, sector-specific, value-additive capital allocation that is way more about the value-add than it is about the dollar-add.

The question is not just “Should I punch a $25K ticket on this one.” More importantly, it’s “Should I invest my time and network to help this one win?”

Takeaway for community builders and network leaders: go deep, not wide. Build specialized segments to draw differentiated angel and founder talent.

2. Risky + Hard to Pull Off = Awesome Moat🛡️

Things that are hard to pull off (i.e. launching and scaling new hardtech) represent a strong moat - my conversation this week with Doug Lee reminded me of another recent conversation with Texas A&M Innovation’s Pete ONeill that touched on this same point.

Here’s a quote from Doug:

3. “You’ll Never Create More Value Per Hour Than During a Negotiation.”💰

Most people hate negotiating.

They’d rather “split the difference” and avoid the emotional strain.

Mistake.

One of my favorite quotes from business school: “You’ll never create more value per hour than during a negotiation.” And one of the best books I’ve read on the topic is “Never Split the Difference” by Chris Voss. Highly recommend.

This week I am reminded how true this quote is.

A few thoughtful emails + a couple meetings + some creative attempts to make the pie bigger for everyone = thousands of dollars in value.

I’m learning.

Until Next Week👋

Thanks for reading - have a great week.

-Andrew

P.S. Your feedback helps improve this newsletter and teaches the algorithms to share it with more people. If you enjoyed this post, hit the "like" button or leave a comment with your thoughts.

How did I do this week?

👏😄Fantastic

🤷‍♀️😐Okay

👎😖Not great

About Me

I cultivate flourishing.

I'm also the CEO of PitchFact, where our mission is to cultivate flourishing specifically through efficient and collaborative early-stage diligence. I'm a proud husband, grateful father, and honest friend. My love languages include brisket, bourbon, and a handwritten note.