Welcome Back to The Cap Table Newsletter!
Today, I’m pulling back the curtain on a lesson I wish I’d learned sooner: the size of your portfolio determines your odds of winning.
Angel investing isn’t about getting most picks “right.” It’s about giving yourself enough shots for the one that changes everything.
One winner can make your portfolio. But only if you write enough checks to find that winner.
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Angel Investing Journey
Everyone loves to talk about their winners - the Airbnbs, the Andurils, the SpaceXs. What people don’t tell you is the silent graveyard of deals that went nowhere.
That’s why the best angels and funds aren’t just great pickers... they understand portfolio construction.
The Math in Action
Here’s how it plays out:
10 Deals → Probably too small. You’re still in lottery-ticket land.
25–40 Deals → The sweet spot for most angels. You’ve built enough exposure that a single breakout can return the whole portfolio.
50+ Deals → Where syndicate LPs and funds play. The surface area is so wide that your odds of catching multiple 20–50x outcomes go way up.
The kicker? Even a $1K check can matter if it gets you into the right deal.
Dilution is the Silent Killer
Owning 1% at seed sounds great - until three rounds later when you’re diluted to 0.1%.
That’s why pro-rata rights and follow-on checks also play a role. You don’t need to chase every pro-rata, but protecting your stake in the real outliers (your Anduril, your Airbnb) is where the game is won
Beyond the Math: Playing to Your Strengths
Surface Area: We’ve invested in over 200 companies — across syndicates, our fund, and the accelerator. That gives us exposure to a wide range of sectors, stages, and founders.
Personal Checks: I’ve written personal checks into companies I actually use and / or believe in (Beehiiv, LayerZero, Biofire, Legacy). When I believe in the product, I have more conviction, and continue to double down on my investment.
Value-Add: Chasing allocation is one game. Keeping allocation is another. Founders don’t just remember who wired money; they remember who sent customers, press, and follow-on leads. That’s how you stay close to the breakout winners.
The Psychology of Volume
Writing 25+ checks doesn’t just increase your odds - it also changes your psychology.
With 3 or 5 investments, you obsess over every update. With 25+, you start to see the patterns:
Which founders actually communicate.
Which traction metrics signal real momentum vs. vanity.
Which markets keep producing winners.
That pattern recognition is worth just as much as the returns.
A Quick Example
Imagine investing $10K in a seed-stage company at a $10M valuation. You get 0.1%.
The company raises at $1B → your 0.1% is worth $1M. A 100x return.
But if you only invested in 5 companies, odds are you didn’t hit that one.
If you invested in 30? Your odds go way up that something in your portfolio will find product-market fit and scale.
My Framework for Angels Starting Out
Pick a number you’re comfortable investing over 3–5 years (let’s say $100K).
Size your checks small enough that you can hit 25+ companies (e.g., $2–5K checks).
Diversify sectors and stages, but lean into where you have an edge - whether that’s consumer, AI, or deep tech.
Expect most to go to zero. It’s the nature of the game.
Reserve some capital to follow on your top 1–2 winners.
The Big Question
If you’re starting to angel invest, ask yourself:
Are you playing to win the power law? Or are you just hoping a handful of checks will magically compound?
Because in angel investing, portfolio math isn’t optional - it’s the whole game.
That’s all for this week. If you have any comments would love to hear from you all!
Until next week, Elana ✌️
👋 That’s all for now friends! See you next week.
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Disclaimer: The Cap Table DOES NOT provide financial advice. All content is for informational purposes only. The Cap Table is not a registered investment, legal, or tax advisor or a broker/dealer.