Andrew Chen

The most dangerous founder: a small win and a chip on the shoulder

In the debrief, Shaan distills a signal he invests on: a founder with a small or medium win has money but isn't satisfied, so the next swing goes bigger. Sam echoes Andrew Chen's line that the most dangerous entrepreneur is set financially but carries a huge chip.

“which is that entrepreneur who's done that is the most dangerous entrepreneur because they have enough money where the next thing they chase, they're going to go bigger.”

Steal thisBack founders who just had a modest exit but are clearly not done; the chip on the shoulder funds the next swing.

Angel investing rules: invest in quantity, demand 3x/year growth

Sam relays Andrew Chen's angel advice: spread money across many promising bets, and require roughly 3x annual growth or the company isn't a venture-profile fit. He notes this offends bootstrappers but says it shouldn't.

“He said, uh, invest in quantity. So just kind of throw money at a bunch of stuff. So like anything that seems promising, just kind of mindlessly invest in it. And second, make sure it's growing 3x a year. If it's not, then it's not good.”

Steal thisAs an angel, bet broadly and cut anything not growing ~3x a year.

Andrew Chen went to college at 12 and hid it until senior year

Sam recounts how a16z's Andrew Chen scored high on the SAT in 6th grade and was invited into a University of Washington program that moved gifted kids straight into college dorms. Twitch's Emmett Shear was reportedly in the same kind of program.

“when he was in about 6th grade, he took the SAT and scored really high. And when he did, I think it's the University, or University of Washington does this thing where every 5 or 10 years, uh, they take 5 or 10 students per year who are in 6th or 7th grade, sometimes younger, like 12 years old, whichever grade that is. And they asked them to come to college, to come to University of Washington. And he was one of the students.”

Andrew Chen's angel investing rules: run toward the heat

a16z partner Andrew Chen gave Sam his rules of thumb for angel investing: only invest in Bay Area or Bay-Area-connected companies, only if it's growing 3x a year, and run toward hot/overvalued deals rather than away from them.

“And he told me his rules and those were only invest if it's Bay Area or Bay Area connected, which is interesting. The second one was only do it if it's growing 3x a year. If it's hot, like a lot of people see something like Clubhouse or something else that's hot and trendy and they run away from it. And he said, no, run towards it and don't care if it's overvalued. Don't care if it's expensive. Run towards the heat. Don't run away from it.”

Steal thisWhen angel investing, run toward hot, overvalued deals growing 3x a year instead of away from them.

VCs fought over Clubhouse by hosting shows to win the deal

Shaan describes how funds courted the hot Clubhouse round by hanging out on the app after work; a16z's Andrew Chen won the deal partly by agreeing that Marc Andreessen and Ben Horowitz would host public shows and open their celebrity Rolodex.

“Andrew Chen, who you were, you know, hanging out with, actually was the one who ended up winning the deal. And I think as part of it, I'm sure they agreed to host some shows. So they have like They have the Good Times show, which, uh, that's the one that Elon Musk came on the other day.”