My First Million
The best business ideas come from noticing what's working and doing it better, faster, or for a different audience.
Back to Takes
For early-stage investing, personal investment often beats fund management economically
Spiciness
Investment StrategyThe Reasoning
Fund carry structure and management fees reduce returns compared to direct personal investment, plus you eliminate LP management overhead
What Needs to Be True
- You can afford to invest personally at meaningful check sizes
- You enjoy early-stage more than later-stage deals
- The economics work better after carry and fees
Counterargument
Funds provide leverage, allow bigger checks, and spread risk across more investments
What Would Change This View
If fund size allows access to deals that personal investment cannot reach
Implications for Builders
Consider personal investing if you have capital
Fund management has hidden overhead costs
Focus on what you economically and personally prefer
Example Application
“Angel investor closes fund and switches to personal investing to avoid LP management and improve economics”