The pre-seed investor is taking a significantly higher risk without any significant reward. In careful review and analysis of both my angel portfolio and the fund’s portfolio, I developed a clear understanding that the best value in the current tech startup market is at the Seed stage and that pre-seed, in particular, in most cases, is not worthwhile, participating in. It’s best to have the discipline to wait and watch and then join in the eventual Seed round.

Many early-stage startups fail or become "zombies" after taking angel money. The investment thesis focuses on execution: building, selling, and finding people to pay for the product. David’s advice to founders: build it yourself, find a co-founder, go to an accelerator program. Startups outside of Silicon Valley were struggling to figure out how to raise funding. Southern California has great support for life sciences, social space, e-commerce direct-to-consumer brands, and entertainment.