Investing and Poker

There’s a reason that many of the most successful business leaders cite Poker as one of the reasons they’re such effective operators…

The game of Poker serves as an exercise in effective decision-making when faced with multiple other actors and incomplete information.

As Fred Wilson explains in his article below, I also think about angel investing much like a game of Poker.

At the earliest stages, you’ll never be able to gather enough information to consistently place large bets. It’s a quick way to lose most of your money after only a few years.

Instead, I treat each initial investment in a startup as the “ante”. It gives me a seat at the table and an opportunity to monitor the progress of the company and its founder.

This strategy allows any early-stage investor to:

- Invest in a higher number of companies
- Reserve more cash for follow-on investments in the winners

At the end of the day, business, like Poker, is a game of survival. The longer you stay in the game, the more likely you are to succeed.