#IbisTech (@IbisTechnology)

Yesterday I deleted my AngelList account. Doing so generated a lot of questions on Twitter, in email and from the press so I want to explain myself.

Its a decision I’ve been wrestling with for the last few months as I’ve found the service increasingly not matching my investment philosophy. That’s not to say the service isn’t a valuable one for entrepreneurs or even certain kinds of investors. I believe that it can be. Its just not a fit for me.

For those not familiar, AngelList’s promise is an interesting one- connect entrepreneurs to an increasingly large base of angel and venture investors while simultaneously exposing those investors to a stream of dealflow that’s been vetted by the AngelList team. That was a promise I could get behind, so I joined the service about a year ago and have been seeing 3 to 5 companies a week ever since.

Its not the emails, the companies or the filtering AngelList does that isn’t a fit for me it’s the investment style they espouse that finally pushed me to press delete on my account.

Though there may be more depth to it, I thought this quote from Naval sums up their investment style pretty well:

Making an investment is like throwing darts in the dark. 

Now, they’ve provided a presentation that goes into more depth on specifics but his statement captures a very real vibe I get from the service. At the earliest stages, its nearly impossible to pick the next Google so throw a lot of darts in the dark and hope you hit it. That high velocity, light touch style is certainly a viable approach to investing. Its just not my style.

I tend towards a more concentrated approach to seed investing where we make fewer, larger, investments and take an active role in working with the companies we fund. Frankly, I just don’t buy the notion that making an investment is akin to throwing a dart in the dark. Worse, I think its a dangerous idea to promote. The best angel and venture investors are consistently good. Think Mike Moritz, John Doerr, Jim Breyer, Fred WIlson, Peter Fenton, Danny Rimer, Reid Hoffman and the like are just exceptionally good at throwing darts in the dark? I don’t.

The way AngelList deals with this uncertainty around being unable to clearly spot winners early on is the second place the service and I diverge. Given that most companies seeking funding at this stage have little to no revenue, low user numbers and light usage data AngeList puts a tremendous amount of weight on something they call “social proof”. Nearly every email they send includes names of people or firms who’ve committed to invest. They put that information right in the Subject line. Its reenforced in the first paragraph or two of the email as well. On the surface this seems like one reasonable data point, among many, to weigh when making an investment decision but its AngelList’s way of pushing social proof that bothers me. Scoble summed up the vibe I get from the service pretty well when he said: 

 Investors tend to be pack animals and tend to want to get in on “hot deals.” AngelList makes the hot deals happen fast.

Maybe I have too thin of skin, but getting called a pack animal bugs me. Unfortunately, that’s the vibe I’ve had from most of the AngelList emails I’ve received. Over the past year I’ve been able to tune it out, but I’ve noticed a distinct change in the tone of the overall market in recent months. “Social proof” is turning to a form or peer pressure where angels feel compelled to invest for fear of missing the boat everyone else is getting on. No one wants to be left on the dock when the next Google leaves port. Relying on other smart investors to make a decision, then jumping on their coattails, is definitely one way to invest it’s just not one I agree with.

The last line of the quote above touches on the final reason I decided to delete my account.

Real or perceived, organic or manufactured AngelList is in the business of generating heat. As I’ve said here and elsewhere, I tend to be interested in ideas and companies that most investors aren’t, so heat is generally a false signal for me. But heat does sway many investors.

Unfortunately, I’ve been seeing AngelList increasingly use their ability to create heat to push other types of deals on their members than just angel investments. In the last few months I’ve seen a couple venture funds raising money on AngelList as well as a number of later stage rounds of financing. Subtle inclusions for sure, but a very different kind of investment product than AngelList members are tuned to evaluate. Generating heat for Series B companies or for venture funds isn’t the kind of investing the AngelList crowd has been trained for. More to the point, it feels like when those kinds of opportunities pass through, AngelList becomes the greater fool’s list.