Last week I was at a non-tech event where everyone at my table was talking about startups and angel investing. Every single person at the table had written a check, and that wasn’t even related to the purpose of the event. As another investor I know calls it, “the tourists are in town.” Tourists, as we all know, come in to a generally unfamiliar area, spend a small about time and money, and then move on. Tourists enjoy the newness and novelty, and then continue on with their normal way of life.
Most angel investors are tourists.
When the current boom times in the startup world end, many of the tourists will go home and we won’t see them again. This is normal. This happened before in the late 90s with the dot com bubble, and will happen again with the boom (much less dramatic this time around but still noticeable).
Entrepreneurs would do well to note that the amount of angel money currently flowing through the system is unusually high, and to plan accordingly.
What else? What are some more thoughts on tourist investors in town?