In angel investing, there are no overnight success stories. Proven investor Tom McInerney from TGM established himself over the course of making 70 deals in the past 12 years, specializing in early-stage internet companies. Tom calls investing “the get rich slow business,” and says, “best case, your winners take years and years and years to mature.”

Despite how difficult succeeding as an investor is, Tom knows that to others, it looks easy. “As an investor, I think entrepreneurs probably don't realize investors have a hard job. It looks easy. I think if they understood fund returns they would be wildly disappointed. You just naturally read about things that work,” Tom says.

Tom joined Cory Levy on the Spearhead Podcast to talk about his experiences as an investor and to share his advice for fellow angels. Among the long list of successful investments he’s made over the years are missed opportunities in now large tech giants, including Thumbtack and Airbnb. “One thing I took away was, as I continue to do well -- take risks. As an investor, you have to take risks,” says Tom.

Tom takes risks on founders he believes in, regardless of the other angels or firms involved in a round or if he’s the first check or the last. “One thing I would say is just because a bunch of great folks are in a round, doesn't mean that it's going to work. I probably overvalued some, like ‘Goldman Sachs and Excella are coming into this round, so it's got to be good.’ That's not necessarily true. You still got to believe in the company yourself I think to write a check.”

Writing a check, for Tom, has significance over and above the capital it provides to the company. “When you invest in a company, as an angel, you should think about it as lending your credibility.” By signing a check, you’re putting your name and the name of your investment group publicly on a company, and by lending your credibility to a founder, you’re helping them leverage your name and brand to help accomplish their goals. When you’re not willing to endorse a startup and back them with your name and money, you need to give a “no.”

“Giving good no’s as an investor is hard but it's really important,” Tom says. Tom explains that he tries to give the best no possible to help founders understand why he’s passing on them. Despite the importance of giving a good no, Tom also cautions founders from taking them as a sign that something is wrong with their business. “Founders shouldn't over-read a no, and investors should make it clear that just because they're saying no doesn't mean that they are right.” However, if a group of founders is consistently hearing no for the same reasons from different investors, they should address this concern.

Listen to the full interview between Cory Levy and Tom McInerney here on the Spearhead Podcast.