Now that Facebook has gone public, there's a lot of newly created wealth on the scene. History has shown that newly created wealth shops the startup scene like a kid in a candy store. Over the course of the lifetime of a new angel investor, they'll do 70% of all of the angel investments they'll ever make in year one. Then they realize that some of these companies will hit a wall, demand a lot of time, and that it's all fun and games until someone gets an eye poked out--or so the saying goes.
With a little patience, forethought, and strategy, you can avoid angel burnout. Here are just a few suggestions:
1) Advise first, invest later. Before you start writing checks, just spend some time with startups. Being a good angel or VC has a lot to do with pattern matching. This takes time--it took me 8 years from the time I evaluated my first investment as an analyst until the first deal I led. Fred Wilson spent 7 years apprenticing at Euclid before he started leading deals. You need to see more patterns of success and failure than just the ones you experienced yourself as an entrepreneur. In fact, taking your own startup experience and assuming that all of your lessons learned apply to every startup is probably a really bad idea. Its certainly not a way to become a great advisor. Great advisors help entrepreneurs come up with the answers themselves, versus just giving them all the answers as you see them from your own experience.
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