0:00:00 - (Ashher Syed): Pattern recognition is the most important skill that investors can sort of develop. When you see the deal flow over several years, I think that's the most important skill that you have to have. If you're coming to me without any traction, I would first ask you, why haven't you built it yourself? Once you build your own conviction, right, only then invest.

0:00:19 - (Andrew Kazlow): Welcome to the Diligent observer where we help angel investors see what most miss. I'm your host, Andrew, and every week

0:00:25 - (Andrew Kazlow): we explore what works, what doesn't, and

0:00:27 - (Andrew Kazlow): and why through conversations with experienced startup investors and operators. My guest today is Usher Syed, founder of Angels Round, a weekly newsletter that offers concise breakdowns on promising early stage startups. Usher is an active angel investor with nearly 50 investments to date. And in this episode we explore his unique emphasis on understanding a company's go to market strategy. We discuss the signals that help him build conviction in a founder, and we break down the opportunity that he sees in AI, power, infrastructure and health tech. Right now.

0:00:59 - (Andrew Kazlow): I hope you enjoy learning from Usher as much as I did.

0:01:10 - (Andrew Kazlow): Usher, thank you for being with me today.

0:01:12 - (Ashher Syed): Thank you, Andrew. Thanks for inviting me. Looking forward to having a conversation.

0:01:17 - (Andrew Kazlow): Likewise. I'm very excited about this because I always get excited to connect with other creators in the angel ecosystem and you have been super active over the last year with Angels Round and so what I'd love to start with is how did you get into Angels Round and why Is it an exciting use of your time right now?

0:01:39 - (Ashher Syed): Yeah, that's interesting. So I've been angel investing for the last six years or so and the more I invested, more I interacted with founders and other investors. I thought there's a gap or a need where there needs to be more education on the angel investment itself and how to see patterns in investments basically. So that's sort of what led me to Angels Round. So just for your audience format, it's a newsletter, weekly newsletter. I go deep dive all on one early stage startup and the format is just like consumable in two to three minutes. And you don't have to have any prior investing background per se. Right.

0:02:26 - (Ashher Syed): Because I feel like a lot of my friends and others always ask me about, hey, how we can get in, but they don't know what to invest in and also what to look for in the investment and the founders. So I think that's the core job that I'm trying to solve. Core, I would say the education content. You could, you could perhaps say that

0:02:47 - (Andrew Kazlow): I love this focus on education as a coordinate in the individual private Investment space, because this is so different from how most of us think about investing. And one of the things I've seen over the last handful of years working with investor communities is how education is often the path to creating more investors. Like, people don't realize that they actually can invest directly in startups. They don't realize that this is available to them and there's a whole ecosystem around it. Take me back for you and your professional journey to the season when you discovered that you could be a angel investor.

0:03:25 - (Ashher Syed): Yeah, so that's a very good question. So when I started, so I started doing a lot of research, right, like anybody else. And the main reason why I started was I would see these IPOs, right? And then there's whole news and everything about it. But if you look back, it's like, hey, I mean, what helped build these great companies and who helped them in this process to get to ipo, right? So this was a trigger. And I had worked in a startup myself, so I was like. And we went IPO ourselves.

0:03:58 - (Ashher Syed): I could see, like, hey, we had been doing so much work before that, before we went ipo. But market only makes news when after the fact, right? And there's so many players involved. So that sort of got me interested. I started doing research. I mean, it's not easy to start with, like you said, not enough content creators out there who are talking about angel investment. And also six years ago, I think the platforms were not available. It was not as democratized as it is now because you have tons of platforms available for retail investors like us to go in and actually try.

0:04:34 - (Ashher Syed): So I think market has changed. There has been appetite for a lot of investment, private investors to go in private markets, right? So I think that's the key. I know a lot of people go in capital markets. I think that's fair because your worth is more liquid there. Here it's a little different. And I would say it's not for everyone, right? You don't want to put all your eggs in one basket. So it's very risky because if you're dealing with any startups, most startups fail.

0:05:05 - (Ashher Syed): But the idea is you have to like the process, right? You have to like working with the founders or at least believing in that mission that, hey, your investment, your guidance could actually change the trajectory for that company. So I think that sort of got me excited. And here I am after 6 years

0:05:26 - (Andrew Kazlow): and your portfolio includes what give me, I mean, just for my audience, give me a rundown of what your background is and why I'm talking To you.

0:05:33 - (Ashher Syed): Yeah. So I have done around 50 investments in the last six years. Some big, some not so big, Some have already fizzled out. Some are in there. So for example, I have Anthropic, I have replit, I have Angellist itself, which is a platform for investors like us. And I've done Substack Beehive.

0:06:01 - (Andrew Kazlow): Oh, you're in both. You get to play against each other. That's how you do it. That's a good investor. You're like, I believe in this theme. Put the capital into multiple. Exactly.

0:06:11 - (Ashher Syed): More creators, the better.

0:06:12 - (Andrew Kazlow): Right.

0:06:14 - (Ashher Syed): So those would be some of the ones recently I've done in Med Drone. It's a company in AI infrastructure, which we'll talk about later, I think when we go in trends.

0:06:26 - (Andrew Kazlow): Love it. Love it. And what are some of the main things that you have learned over the six years? I imagine you're a little bit better of an investor today than you were your first five deals. What are some of the key themes that have stood out to you as you're in year six and now rolling into this leadership in the space through your newsletter?

0:06:50 - (Ashher Syed): Yeah. So I think patent recognition is the most important skill that investors can sort of develop. When you see the deal flow over several years, I think that's the most important skill that you have to have, that you have to see a pattern in founders. You have to see a pattern in terms of the market space and where it's going. Right. So I think those three things are very important. And also I put, since I come from product marketing background in tech, I see a go to market lens as well on top of that. Which what I mean by that is I look at the positioning of a company because I've seen more of a times that a good product with a not so good positioning loses to mediocre product with a good positioning.

0:07:37 - (Ashher Syed): So I think that's a key because distribution comes from that positioning because then you can, if you have a story as a founder, you have a better distribution. Actually people buy that story.

0:07:50 - (Andrew Kazlow): Can you give me an example of good positioning versus bad positioning?

0:07:55 - (Ashher Syed): Yeah. So I would say Angel List is a good example on that of which one Angel List

0:08:03 - (Andrew Kazlow): a good example for

0:08:03 - (Ashher Syed): which case positioning for positioning and distribution both. So I think they, what I said earlier, like the trend, they saw it pretty early that hey, there's a demand in the market, people have disposable income, they could invest, but they don't have a means and ways to do it. What they did was they positioned the product for us like retail Investors and also for funds as well, because funds have another on a supply side problem on the other side because they, they want to get like syndicates, for example, right. And other funds, they have a compliance problem. They don't want to deal with all this paperwork and K1 statements and cap tables and all that.

0:08:44 - (Ashher Syed): So they position themselves for both sides of the marketplace. So I think that's what I see in the market that's done really well with this and you can see their growth.

0:08:56 - (Andrew Kazlow): So what would a bad example be? You have to give names. But like talk me through a recent deal, you've seen that you were like, oh man, this is an okay product, but they are not storytelling this. Right.

0:09:07 - (Ashher Syed): So I've seen some really good tech products actually in the AI space, which from a tech point of view makes a lot of sense. Right. But I couldn't really pinpoint what exactly. Like who is the audience they're solving the problem for. So I think I won't name them here, but more so in that AI space that I'm seeing that. And the product itself works, it does deliver the results. But they're not telling the story. Right. They're saying they're just all over the place.

0:09:39 - (Ashher Syed): So I think that sort of dilutes the value. And like I said, I mean, I've seen some others in the same. That product was not as good, but they said we solve X for Y audience. Right. So they're very clear in their positioning and, and therefore the messaging comes from that positioning.

0:09:56 - (Andrew Kazlow): So say more about distribution because you talk a lot about that as a part of this and you've obviously spent the last year plus building your own personal distribution. What is distribution in a company? Like how do you do that? Well, why is that so important? Just talk me through distribution.

0:10:14 - (Ashher Syed): Yeah. So distribution, if you just break it down simply, right? It's. You're building a product for one, but how you can rinse and repeat for millions of people. Right? So I think that's in a nutshell what distribution is. But how do you get there? Right. I think that's very important. Like from one everybody, I mean you can call your friends and stuff, they can come there. But you have to have a channel, basically. Channel in the sense that it has to rinse and repeat or find those folks whose problem you're solving basically.

0:10:47 - (Ashher Syed): And then you just have to keep investing on that path to scale to that either ,thousand million or whatever eight number. I think that's a distribution for me in my lens. Like if a company comes to me saying Hey, I have this great product and I can solve this problem. But let's find thousand people where you can solve the same problem. Right. And then keep multiplying. So I think that's. And, but for that distribution, your positioning has to be right and your messaging has to be right. Otherwise you will miss those people.

0:11:20 - (Andrew Kazlow): What are the most common mistakes you see in that gap?

0:11:23 - (Andrew Kazlow): Because.

0:11:23 - (Andrew Kazlow): Right. It's easy to solve a problem for, you know, one person that you're person you know, that you're working with because it's very specific to them and their needs. But there's a thousand things in that that aren't actually the thing that everyone else needs. There's a core, though, a nugget at the middle of it that is scalable. What are the common mistakes you see as founders go from one to many?

0:11:45 - (Ashher Syed): Yeah. So I think number one is not defining your ICP correctly. ICP is ideal customer profile. Basically, in marketing, we use that quite a bit. If you're not sure who your customer is, then you will not be able to scale that much because you're just always trying to find. And you'll have a lot of marketing spend and, and without reaching to your icp, because icp, if you are able to. And that's why I'll go back to positioning and messaging. Because if you know your positioning right, you have messaging right. For that icp, I think only then you can scale.

0:12:18 - (Andrew Kazlow): What are your favorite questions for poking founders?

0:12:21 - (Andrew Kazlow): Right.

0:12:21 - (Andrew Kazlow): They give the pretty pitch slide. You know, you're reviewing the thing and you're like, okay, let's see if they actually understand their customer. What are the questions you ask them?

0:12:28 - (Ashher Syed): So first, I mean, I look at the story first, right. Because story tells me a lot about their positioning. Like, so if the story is gelling with me and I look at their, like how the story and their actions are in terms of the product. So I think that has to sort of gel. If it's not, then perhaps it's just juxtaposed in an artificial way. Right. So I think that's a key. As like I said earlier, the patent founding.

0:12:57 - (Andrew Kazlow): Right.

0:12:57 - (Ashher Syed): So this is one of the patents

0:12:58 - (Andrew Kazlow): I look for specifically, like, do they have a background in this space? Why do they care about this problem? Why are they building this? When you say the story, what does that mean?

0:13:06 - (Ashher Syed): Yeah, story means if they're really interested in that, is it just because it's a trend out there or is it. They're generally interested. They know everything about that. So as a founder, I need to know if you are all in or not, right? Basically 360 of everything that they're trying to do. Otherwise, you know, I can easily poke holes.

0:13:27 - (Andrew Kazlow): So you want to see some crazy obsession, like they just know their stuff. So that when you ask the questions, they're getting excited and they're like, oh, thank you for asking me. Let me tell you more about the story.

0:13:40 - (Ashher Syed): Exactly so, because I know that perhaps, I mean, I'll give them benefit of doubt in that way, right? Because even if you haven't gotten your icp, but I know that you, since you're so in, in the product or the use case itself, you will find your ICP eventually. Because every founder has their own journey. But finding that ICP is the job for all the founders.

0:14:01 - (Andrew Kazlow): Let's transition to Angels Round. Tell me more about how this evolved and what you do every week here.

0:14:10 - (Ashher Syed): Yeah. So Angels Round, like your diligent observer, right, is a newsletter and it's for the founders, investors and operators and especially for folks who are like me who were sitting on the sidelines for last six years ago or seven years ago, right? They want to get in, but they don't have enough confidence, right? So I think this newsletter every week when I break down any early stage startup, so it tells the reader that, hey, these are things to look for. Pattern recognition, in a sense that when you read like few of these additions, you'll see that pattern recognition that like how I'm breaking down these startups.

0:14:51 - (Ashher Syed): And then eventually it should give you confidence that, hey, perhaps I can do it too, right? Like it's not a rocket science. It's basically just putting your head together for a few minutes and see, hey, I see it, right? So I think that's one audience investors. What they get out of it is they see startups that are perhaps they didn't come across before, right? And maybe in the next round or something they can participate.

0:15:17 - (Ashher Syed): I think that's an opportunity. And then for founders themselves, they can see adjacent stories of other founders, like what other people are doing, how they're becoming successful and who the investors are for them as well to see. Hey, perhaps I'm the same space or adjacent space. I could go and seek out those investors. So I think these three audiences have different purposes, but I think all benefit from the same edition.

0:15:43 - (Andrew Kazlow): Well, it's a great read. I mean, I've been on it. I just sent my wife this week. You recently had a laundry folding robotics company on there. And I was like, babe, we need this, can we please buy one? So I've Enjoyed it and I think audience will as well. How did you come up with the recipe for that? Like, how did you build the structure? Because it's very consistent and it's the same buckets every time, which I love.

0:16:05 - (Andrew Kazlow): Like, how did you come up with that structure?

0:16:08 - (Ashher Syed): Yeah, so like I said, I mean as an investor, I get a lot of memos, right. And they are like, I don't know, from three pages to five pages long and somewhere in the middle I lose interest and I can't keep up what I read like 30 seconds earlier. So I'd be looking for something like this myself to see, hey, anything that's very in a short format where I can skimp it through and like two to three minutes and still get enough out of it. So to be dangerous. Right.

0:16:39 - (Ashher Syed): If I'm really interested, I'll dig in more. Right. So I'll start researching more, but it should give me enough for to build my thesis basically as an investor. So I think that's what I was trying to solve my own problem here.

0:16:51 - (Andrew Kazlow): So you just cut out all the extra. It's very simple, focused. Key points.

0:16:57 - (Ashher Syed): Yeah. And also, like, especially for this folks who want to get into this space, I don't want to overwhelm them with a lot of stuff. Right. So it has to be something digestible.

0:17:09 - (Andrew Kazlow): Has anything surprised you over the last year or so as you've been running this newsletter?

0:17:14 - (Ashher Syed): So not a surprise, I would say, but a lot of interest. I say, like I didn't expect a lot of people to show interest from places which where I didn't expect. I mean, some of the VCs have started falling and some other folks in big companies like Google and Tesla and other folks. So that was, you could say surprise. But like I said, I mean, it sort of validates the point that, you know, folks sitting in these companies and other places, even in other startups and founders, they want to see what others are doing.

0:17:45 - (Ashher Syed): I think that's the key here. So I think it's a win, win situation.

0:17:50 - (Andrew Kazlow): Let's talk about what you're seeing in the ecosystem. What are some of the trends or topics that you're excited about? I mean, every week you're sending out companies, you're in the thing, you've got 50 deals under your belt, you're actively holding yourself out, involved in a number of communities. What are some of the trends and topics that you're excited about? Let's assume AI broadly, but that's been the thing for a couple of years now. So you got to give Me one click deeper within that.

0:18:15 - (Ashher Syed): Yeah. So AI definitely. I mean anything AI has excitement. But what I'm personally interested in is the constraints in AI, like how AI is constrained and companies which are helping with that constraint. For example, I'll give you the power infrastructure, right, for building data centers. I think that's what I'm interested in because I feel like chips and others. Yes, there's supply, short memory and all that, there's supply shortage, but they're still available.

0:18:46 - (Ashher Syed): But power, power seems to be a constraint for these data centers. So any companies that are enabling in that space, like for example this company I invested, Med Drone, they are saving 30% of power in chilling system for data centers. So I think those type of plays I'm looking for because it sort of unveils like there's. There's a huge upside, right? You could say, because yes, I don't know if all of them will prevail, but I think a lot of companies are working in that space and that excites me because AI is not going anywhere and it's becoming more of a workflow in our lives. Right. As we can see in a lot of different things. So demand will keep going up, but power cannot keep up.

0:19:35 - (Ashher Syed): So I think the grid system, wherever we can save energy, I think, and we can optimize for it. I think that's what exciting me and I feel like in next three to five years we'll see more and more of that.

0:19:48 - (Andrew Kazlow): A quick note before we continue the conversation. Alongside the Diligent observer podcast and newsletter, I also run an outsourced operations service specifically built to serve Angel Networks. My team handles things like initial screening, social media, newsletter prep, platform management and a whole lot more. The kinds of things that either aren't getting done or shouldn't be done by busy communications leaders.

0:20:09 - (Andrew Kazlow): If that sounds interesting to you, send me a note.

0:20:12 - (Andrew Kazlow): Now back to it. How much of your portfolio is investments that you built a specific thesis around separately and then went out and found companies that fit that belief versus things that you opportunistically came across and believed in. Because I feel like as investors there's a tendency to feel like I'm not doing enough of one or the other. Hunting versus gathering, so to speak. I'm curious as you're talking, because you just described a really specific category that you believe in. A theme, a hypothesis essentially that you're investing around how much of what you do is like that versus just more opportunistic.

0:20:56 - (Ashher Syed): For me, I mean, I've always been more opportunistic but the thing what I'm doing is I sort of live in the future, you could say, like I like to put myself in the future, right? So I look at any investment from that lens. So where I can see, because all of these early stage startups, they're eight to ten years out, right? So they're building for that future. So you have to as an investor put yourself in those shoes. Like, hey, do I see that happening? Because those channels, those marketplaces, those habitual things that consumers have do not exist right now.

0:21:31 - (Ashher Syed): But can you see yourself from that mindset? Right? So I think this power play and these other things, they usually stem from that because when you're looking at the problems that are in front of you, they say, hey, so we're solving problem A, but it's going to create problem B. So I should be looking for problem B. Right? Start of solving that problem be. So I think that's how I usually think. I don't usually say that, hey, I start with this thesis, but before AI was itself, right? Like the infrastructure layer, then the application layer now is picks and shovels. Like hey, within picks and shovels, what exactly would be the constraint? Right? So I think that's where the puck's going to be. I think that's where you want to focus on.

0:22:17 - (Andrew Kazlow): Yeah, who's making the picks and shovel, who's applying the infrastructure that it takes to build the picks and shovels that service the thing. This is amazing. Keep going. Give me some other categories. So AI power, specifically other constraints around that macro trend that you're focused on. What else?

0:22:35 - (Ashher Syed): I think there's a lot of opportunity in health, health tech as well. Healthcare, healthcare has been very, I think a lot of big companies have tried and all that, but I think we do see a lot of good companies coming in that space where incumbents will probably have to either change the way of they're doing business or they'll completely come up with the new workflows around healthcare. Because as a consumer we have had enough of this inefficiency in the system and the tools are ripe because incumbents had a lot of power and they still have power, which they protect their own workflows, right in the health tech system.

0:23:15 - (Ashher Syed): But I think the new wave will either replace them or maybe they have to change their way of thinking. So I think I feel like as a consumer I feel very optimistic that we'll eventually get a better healthcare.

0:23:29 - (Andrew Kazlow): That would be great. Let's hope that that happens in our lifetime or in enough time to serve Our kids. Well, so say more about that actually, because I think a lot of people, particularly coming from tech, have a really difficult time wrapping their arms around healthcare. Even health tech specifically. Like how, how did you build conviction around investing in that category? Coming from a tech background?

0:23:54 - (Ashher Syed): Yeah. So like I said, I mean, I've invested in few health techs myself recently. A company called Hopper which is doing radiology, basically they build their own image library and train their own LLMs and provide the clinics to diagnose cancer better and all those type of things. Right. So they can predict much better. And what they have is a workflow around radiologists, basically, which OpenAI and anthropic cannot get into because that's a very specific workflow. I mean, they might eventually buy them, but that's where we are right now.

0:24:32 - (Ashher Syed): So when I am looking around, so like I said, I mean, I'm looking at the problems again, like, hey, where, where AI is right now and these problems exist and what it has a potential to solve in next five to 10 years. Right. I think that's where I'm connecting dots for any investor who's listening. Right. So I would recommend the same thing that put yourself in that position where you're living in that future and you see that if AI gets advances to certain levels, what potential does it have? And given that potential, look at the problems at that time.

0:25:08 - (Andrew Kazlow): But how did you specifically build the conviction to make a bet in a space that I imagine you don't have a deep expertise in radiology? So how did you build conviction in that bet despite a limited understanding? Because a lot of the feedback I hear from angels getting into healthcare investment or frankly saying I won't invest in, because I just don't understand it and it's long time horizons and all that.

0:25:35 - (Andrew Kazlow): I mean, it's just that that categorically is difficult for many investors. And so I want to understand, like how did you build the, you know, the guts to be able to make that bet without a deep industry expertise?

0:25:47 - (Ashher Syed): No, that's, that's fair, I think, and I can totally understand. But, but I think you have to be talking to a lot of folks, right? I think that's, you have to do your own due diligence. You have to read up a lot, right. In that space. And like I said, as an investor, you have to be curious, right? When you're living in that future, you have to be very curious because nobody knows that future. You're just connecting dots. Right?

0:26:11 - (Ashher Syed): So my process is mainly talking to folks in that space, trying to get a pulse. Right. Like whether they see that as a problem or not. If they see it, then I do more research on my own. And then that's how you usually come up with a conviction that, hey, perhaps what I'm thinking is sort of half validated or 80% validated with folks I've talked to, I mean, they'll have difference of opinion, which is good.

0:26:36 - (Ashher Syed): Right. There's no one way to solve problems. And the more you talk to folks, the more you get conviction, basically.

0:26:45 - (Andrew Kazlow): So making this tangible. Go ahead.

0:26:47 - (Ashher Syed): No, I was. And sometimes you get away from your conviction too. So it goes in the opposite way as well.

0:26:52 - (Andrew Kazlow): So let's get practical about this. Like Asher's way of making investment decisions. I don't know if this is right or wrong, but tell me. Like I pitch.

0:27:02 - (Ashher Syed): Let's.

0:27:03 - (Andrew Kazlow): Let's say I'm raising for radiology tech. You just so happened to recently do an investment in that space. So you know something about the space. You're like, hmm, Andrew seems smart. He answered my questions. Well, I'm interested what happens next in your brain and in your workflow, like timeline.

0:27:19 - (Ashher Syed): So first of all, I'll look at Andrew much deeply. So I'll look at, like I said earlier, I look at your story, what you're trying to sell me. Right. And what you have done in that space. Right. In this case, in the radiology example, the founder is a doctor. He's worked at Microsoft and all those places. So he knows the AI and the radiology side more very intermittently. Right. So. So I think I will look at you first, Andrew.

0:27:47 - (Andrew Kazlow): How do you do that? Like, what does that mean?

0:27:49 - (Ashher Syed): Yeah. So I look at your profile, I'll have a meeting with you. Right. I'll try to understand why are you building this company? What is driving you? And mostly what I want to find out is if things go south, is Andrew gonna just take next job offer or gonna stick with this? Because as an investor, I wanna protect my capital. Right.

0:28:12 - (Andrew Kazlow): And you've seen, I would imagine in the five, six years you've been doing this, a fail in large part, it sounds like, because the founder just gives up and it's too hard.

0:28:20 - (Ashher Syed): Yeah, I mean, I had one YC company, Y Combinator company, pretty good. And I think the guy found a job in OpenAI, he was building a pretty good start.

0:28:31 - (Andrew Kazlow): So you went to zero and he's doing just fine.

0:28:34 - (Ashher Syed): Yeah. So I think that happens too. Right. Which is fair. I think in this startup investment, you expect that because I don't blame the founders for that, because startup is not for everyone. Right. It's very tough. But coming back to your question, so I'll look at you, I'll talk to you, I'll get references on you, right. What you have done. So that's the feel I'm trying to get out of you. First, you know, the space. Second, if things go south, are you resilient or not? Right.

0:29:00 - (Ashher Syed): So once that filter passes, then I see your positioning. Right. Right from the start. Like I said that if your story is gelling, that means you're positioning it right and you're appealing to the right audience. And I can see the problem. And I can also see if the tech you're talking about has ability to solve that problem.

0:29:21 - (Andrew Kazlow): Does that change if I'm early or pre revenue or haven't quite got any customers yet? Like do you look at pre revenue type stuff?

0:29:29 - (Ashher Syed): So early stages, most of the times pre revenue. Right. But with recent, I mean like three years ago, I would say I would give you more leverage, right. In the sense that, hey, yes, you need a team to build this and all that. But now I think my lens has shifted because all these cloud code and codecs, everything is available. You should be able to build enough to get some traction out of it. Right. So in fact it goes the opposite way now. So if you're coming to me without any traction, I would first ask you, why haven't you built it yourself? Right.

0:30:01 - (Ashher Syed): Every founder has to be able to do it now. So I think that's, I would say that's a general assumption these days for a lot of investors because it would have taken six months to a year plus a million dollar to hire engineers and do it. Right. So the prototype should be built by a founder now and then come and talk to me. I think that's usually the case these days.

0:30:23 - (Andrew Kazlow): And that's likely going to continue, I would imagine, as technology becomes easier and easier to MVP at least.

0:30:30 - (Andrew Kazlow): Right.

0:30:30 - (Andrew Kazlow): Building out enterprise grade, totally different story. But like to get the first couple of customers like a founder can, can do that and should be able to do that. And if they can't, you're saying that that essentially comes back to a question mark of does this founder have what it takes to actually do this?

0:30:45 - (Ashher Syed): Exactly. And I want founder to be a salesman here as well. Because if you're hiring a salesperson right off the bat, I think that's, I mean, yes. I mean if you're a repeat founder, I could see that. But as a first time founder, I want to see you selling it yourself. And hustling out there.

0:31:04 - (Andrew Kazlow): Okay, well I interrupted you. You get to know me. You're like, yeah, he's got it. You look at the go to market, the distribution, all that and you're like, okay, he's got a channel, he's got a lens, he's got the right stuff. It's gelling for me. Then what?

0:31:17 - (Ashher Syed): Yeah. So I think then the investment happens, then we discuss the terms, right? Like the valuation of a company and we figure out what's the best way. And more importantly, I think as an investor, you're not investing in the founder, but also the progress of the company. Right. I want to open more doors for you, right. As an investor, I want to give you more distribution access, for example, wherever as an investor I can provide you. Right.

0:31:43 - (Ashher Syed): So I think I also feel like founder has to interview the investor as well. You should not take the first money that comes your way. You should see, hey, the strategic investors where this investor can help me in my field. Right? So I think that's, it's a, it's sort of a combination. So it's not one way streak.

0:32:03 - (Andrew Kazlow): Have you had any fun conversations when founders are diligencing you, like, is there a specific story that I should know about here where a founder just grilled you and you were like, oh God,

0:32:14 - (Ashher Syed): I feel like I put myself out first. Like I tell them what I bring to the table. So I think this hasn't happened yet, but I wouldn't be surprised if it does, right? Because I'm preempting all of those questions saying, hey, I bring xyz. So you only want to take me in. If you think those things will help you, that's good.

0:32:34 - (Andrew Kazlow): Get ahead of it. Get ahead of it. Here's how I can end value. Yeah, here's my check. But like here's the real value is

0:32:39 - (Ashher Syed): the other stuff because I mean like giving a check, I feel like there's a lot of investors in the market. But founders should also see where the best value is for, for getting people in, right? Because yes, I mean check is one tangible value, but there's a lot of intangible stuff like what introductions you're making, what distribution access you're opening for them and what other. Because I mean, you have to go for next round as well because distribution gets you to next round.

0:33:08 - (Ashher Syed): Because if you can scale to, let's say from 1 to 100,000, right, you will not get your next share. So I think it's super important for early stage founders to get the right investors in place sure.

0:33:20 - (Andrew Kazlow): Final thoughts for our audience. Lessons from 50 deals, running a weekly angel newsletter, Being in tech. Final thoughts.

0:33:30 - (Ashher Syed): Yeah. So I would say angel investing is not as tough as it looks like. It's more democratized. Use those tools available to you. There's a lot of angel investor groups in all the towns available. They have very good due diligence process. You learn from them. Right. I mean you don't have to invest right away, but you go through that exercise. On top of that, there are a lot of syndicates available on platforms like Sidecar, AngelList. Right.

0:34:01 - (Ashher Syed): So it gives you access and even if you want to go, because those are all accredited investors. Right. And if you want to go non accredited side, there are tools available like Republic VFunder. So you can dip your toes if you really want to get in. Right. But the key is to get started. I think we all keep on thinking on the sidelines that hey, I'll start one day, but that one day never shows up. So I think once you have your skin in the game, I feel like that's when you learn the best.

0:34:33 - (Ashher Syed): If you're just on the sidelines, you just browse things and move on.

0:34:38 - (Andrew Kazlow): Give me another word on how to do that. Well, because it's easy to say that it's hard to do that when there's capital on the line too. And I only have so much to go around. What would be your strategy or your recommendation on a newer angel, how they could get started?

0:34:51 - (Ashher Syed): Yes, first, I mean I would not put a lot of capital as you're starting out, right? Make sure it's a play capital that you have, put your stuff that you'll jeopardize your other day to day or cash flow and other stuff. So first designate a capital that you can play with. Right. I think that's a start. And in this retail investment size, I mean the capital requirements is relatively less compared to angel networks and stuff, right.

0:35:24 - (Ashher Syed): So maybe start off with that and start seeing the deal flow. I think that's important. The GPS that you follow, follow them more closely. See what kind of deal flow they're bringing, how much articulation they're doing on the business case itself and the founder. So I think those are very important. Study that. And then once you build your own conviction, right. Only then invest. Because if some X is saying, if I'm saying something, don't invest just based on that.

0:35:54 - (Ashher Syed): Right. Always start with the hypotheses and see if you can validate that conviction and then see what others are seeing in the space and Then once you have that, I mean, yeah, start slow, but and also even as you, as you grow, I still believe in hedging myself in terms of having a portfolio of companies as opposed to just putting all my ducks in like three or four companies. Yeah, I mean, some investors would do that, which is fine.

0:36:21 - (Ashher Syed): But my strategy is especially if you're in early stage investment, right. Most of them will fail that you go with that assumption and VCs do the same thing. So I would say 90 to 95% of them will fail. And fail doesn't mean go to zero. Right. Even if you get your capital back, that's good enough for us. And the other thing for new angel investors, that anything that you invest in angel investment is not look good.

0:36:51 - (Ashher Syed): So go with that. And it's eight to ten years of patience.

0:36:57 - (Andrew Kazlow): So we're going to find out in about two, three years if Usher is any good at this.

0:37:02 - (Ashher Syed): Let's find out.

0:37:02 - (Andrew Kazlow): Yes.

0:37:05 - (Andrew Kazlow): Well, man, thanks for joining today. It's been a pleasure getting to know you and I look forward very much to our next conversation.

0:37:12 - (Ashher Syed): Thank you much.

0:37:12 - (Andrew Kazlow): Very thanks for listening to this episode of the Diligent Observer. I'm your host, Andrew, and if you're an angel investor looking for essential angel intel in five minutes every week, I think you'd enjoy my newsletter. I send my best stuff, interesting deals and more straight to your inbox. So you never miss a thing.

0:37:28 - (Andrew Kazlow): Subscribe today at the Diligent Observation.