Angel Investor is a term chosen, of course, by those it describes. It's shorthand for Crazy Rich People Who Just Might Invest In Your Completely Unproven Business.
John taught us plenty about how he sees the world. One lesson: You sure can see clearly from atop a mountain of money. Or, John would hasten to add: maybe not. In any event, the view is definitely better.
John is Dante, describing the rings of hell. For John, of course, it's ten possible returns on an investment — each one worse than the previous one. (If you are interested — and it is darned entertaining if you are — here's a podcast where John describes Ten Exit Outcomes.)
But, mercifully for all readers (especially John), this post is not about John and his angel investing.
This post is a story that came to mind when John described how angel investors make the wrong investments time and time again. (That's simply the game they play as they look for the long shot.)
Here's the story: A Night At Strokey's
It comes from Andy Sokol, whose most frequent story was about net cotton content and is how this blog found its name.
This is one of Andy's lesser told stories and a favorite of mine. From memory, heard through his highly refined, yet New York wiseguy accent:
I was in charge of entertaining an out-of-town client. The evening had included a great meal and lots of good fun and drinking and we had ended up at an old favorite haunt of mine: Strokey's Bar.
Now Strokey's was not a fancy place. Quite the opposite. It was down on the Bowery and was a very simple affair. I just liked it. It was a real, old New York bar.
Well, the evening was winding down and it was time to get my client to his train at Grand Central Station. So it's time for me to pay the tab and get him into a taxi, which I also had to pay for. I look in my wallet and — wouldn't you know! — I'd spent all my money during the evening.
This was terribly embarrassing, you see, because it was absolutely critical that this gentleman be my guest. I wasn't just taking a fellow out for dinner and drinks. I was a representative of the entire Stevens firm and I had to carry the flag.
So I excused myself from our table and went over to the bar. I signaled the barman and he came over. I said, quietly, "Listen, pal. I've got myself in quite a pickle. I'm entertaining this fellow from out of town and I've exhausted all my cash. Now, I come in here from time to time, and I'm wondering: would you please let me write you a check for cash?"
"How much do you need?" asked the barman.
I said, "I could sure use twenty dollars." Mind you, twenty dollars was a large amount of money back in those days.
The barman raised his eyebrows and took a half step backwards, so he could see me better. He gave me a real look up and down. He was sizing me up. "Make it for fifty," he said.
What a relief! "Thank you, my good man," I said as I took out a check. "I am very grateful to you. Very, very grateful." I handed him my check and he gave me fifty dollars.
He really helped me out. He saved my evening. But I was curious. As I was paying my tab, I asked him, "I have to ask you something. You don't know me from Adam. And yet you are willing to cash my check — and for fifty dollars, no less! Why? Why are you willing to do this?"
The barman held up a finger to silence me. "Wait right there," he said. He reached into a cabinet below the bar and came up with a cigar box. He opened the top, dipped his hand into it, and pulled out a dozen or so slips of paper. "You see what these are? They're checks, returned from the bank for insufficient funds. This box is full of checks I've cashed that were no good. You see, I'm a collector of bad checks. But I'm getting better at this. I can tell: your check is good."
I've always loved this story. And I've always loved Reginald Marsh's ink-and-watercolor depiction of "Strokey's Bar on the Bowery" (1946).
Angel Investors are where you seek them.