#98 — The Keys to Angel Investing — Elad Gil

**James Beshara** (0:00)
Today's episode is with the legendary Elad Gil. Many people might not know Elad's name, but you will definitely know about 30 of his investments, because 30 of them have achieved the vaunted unicorn status. 30 investments. That is the most I've ever heard of any investor, and that is insane to even just think about. When I recorded this, the last I'd heard was 23, which is also insane, and well, we got the update. It's 30 of his investments, almost one in five, has turned into a billion dollar or more company. It is truly remarkable that track record. We talk about his three tips that he would give to anyone starting to invest today. We also talk about the largest trends that he's noticing that are all taking shape here in 2021 within technology that he is finding fascinating and paying more and more attention to. We also talk about the implications of those trends. All of that and more in today's episode. This is the podcast that sits at the intersection of technology, entrepreneurship and philosophy. So without further delay, let's get into it with Elad Gil. This is Below the Line.
Elad, welcome to the podcast.

**Elad Gil** (1:23)
Thanks for having me on.

**James Beshara** (1:24)
Thank you so much for joining. We've known each other for a while now, maybe eight years or so since you invested in my company, Tilt, at the time in 2012 And I was actually just thinking in lead up to our conversation how your, when we chatted, I still remember vividly it was in ritual, it was in one of the ritual coffees in the mission. And we met, I got introduced through Y-Combinator, Harge, introduced us. And we chatted for about 20 or 30 minutes. And then I remember the next day you said, I'd like to invest 25K in the company. In 2012, and in the, everyone else, you know, it was usually like multiple meetings. It was usually like, I've got these follow up questions. And it was a lot of what I would sense would be deliberation from the investor. For you, it was actually really so smooth, and it was just kind of almost meeting to get to know me a little bit, a little bit about the company, but then you just let me know the next day you're making an investment. Can you walk me through how you make an investment and how you, is it, and maybe they're all completely different from one another, but how maybe you walked through a recent investment and how you walked through just a kind of hypothetical investment opportunity?

**Elad Gil** (2:46)
Sure. I think early stage investing versus late stage is very different. If I were to invest in a company later in its life, I would approach it very differently. But for an early stage investment, I'm a very market-driven investor. The biggest question for me is, does it seem like there's a real market here? In the case of what you've been building with Tilt, it was already growing at a good rate organically, and it seemed like there's a lot of interest around it. In general, there's a broader trend that we're only really seeing come to fruition now around subscription models and payment models for creators and payment models as rewards for people around things they're doing. Obviously, you folks were doing something a little bit different, but there's always been, I think, a really big, rich, fruitful vein around payments and different forms of that, be it Stripe as a payment API, Square for collecting payments from people who normally weren't able to take credit cards out in the world, and obviously, that's worked a lot over time. A firm around installation and payments, and there's more and more innovation all the time. Substack now is entirely a subscription or payment model.
Even back then, I thought there was a lot of innovation still to be had in terms of different forms of payments and group payments and everything else. Traction seemed to be happening. You and your co-founder obviously were really talented, and so it was a mix of those things, suggested that it was worth getting involved.

**James Beshara** (4:17)
Do you do a lot of that thinking before you meet with a founder? The meeting is part of it, but you have already formed a thesis?

**Elad Gil** (4:26)
Yeah. It depends on the type of company or the market. There's some cases where I come highly predisposed to something because it's an area I've looked into, or a pain I've experienced directly myself. In those cases, I may have a very, I want to vet how the founder thinks about it, or what they've learned from the market that I probably don't know. But there are some circumstances where I come to something really predisposed. When I had a lot more time than I do now, I used to really bat a lot of companies pretty deeply before I'd even meet them, and so I'd use the product. In some cases, I talk to customers, I still do that now sometimes if something's a little bit later stage. But sometimes I'll go in actually having done a bunch of the work before talking to somebody because I think then you can actually have a real conversation or I'll ask for what are things you can send me in advance that I can read just so that I can come and ask you real questions instead of just covering the basics, which may not be worth your time because then you have to have a follow-up and it's frankly a waste of the founder's time. I'm finding front-loading work if it's easier on the founder.