Beware the Ego-Stroking Angel Fool

There are more wealthy angel investors than ever. This is a result of the US Dollar’s role in global finance. Most of these newly rich angels add no value beyond money. Suppose you are doing well and are an excellent networker of advice and talent. In that case, this is probably exactly what you want because the low-value-add angel is less likely to have crazy, strong opinions about how you should operate the company. Less likely to bully, cajole and otherwise become toxic.

But there is a subspecies of angel investors you should be concerned about, regardless of their affiliation with the CPG industry. 

The successfully exited CPG founder-turned-investor. Oh. My. Lord.

In my experience, it’s often these one-hit wonders who, discounting the role of sheer luck, start to believe that their good fortune lends their every whimsical thought as the gold-standard seal of validity. And they forget that paying a founder to take their advice should be, well, kind of embarrassing. 

These angels (yes, I know dozens who operate this way) turn into a specific kind of narcissist angel investor: the one who insists you adopt their various POVs. 

But most are smart enough NOT to signal this before you sign. 

They will begin the relationship with a massive amount of ego-stroking mixed with vision-stroking. This is designed to put you under a spell, which they will use later. Feigning alignment superficially with your mission and values has become ridiculously easy for unethical investors because our culture of conflict aversion in business prevents us from demanding proof of commitment. This is especially true when staring at a pile of money your business needs.

Any angel you didn’t know six months ago approaches you like a bro and is backslapping you, your team, your product, and your vision is most likely not real. This is a new form of deal-hunting for bored, rich angel investors.

Look, an angel displaying some polite respect for what you are doing is normal. But savvy investors do not ego-stroke. They wait for people to come to them, based on word-of-mouth as a good-faith financial partner. 

Be aware of this behavior. Be skeptical. Triple confirm commitment to ‘virtues’ from those trying to place a bet on your P&L.