The Deal I Should Have Passed On

Very early in my angel investing, I made a bad investment for a very specific reason. Everyone else was going in.

The deal came through a trusted contact. A lot of experienced investors were backing it, some of whom had been doing this for a decade longer than me, with the track records to match. The room was excited. It had the feel of something that could be the next big thing.

My gut was telling me not to do it.

I couldn't fully articulate why. Nothing on paper screamed no. But something about it sat wrong with me, and I couldn't shake it. I invested anyway, and I even increased my cheque to match the investors around me, because who was I to hold back when people this seasoned were leaning in.

It's one of the weaker investments in my portfolio. Nowhere near my top ten. And the lesson from it has stayed with me longer than almost any other.

Angel investing has two halves.

There's the science, the part you can write down. Due diligence, market sizing, the competitive landscape, the numbers. That work is essential and it's most of the job.

Then there's the art, the part you can't quite put your finger on. How a founder makes you feel in the room. Whether their story holds together in a way that goes beyond the deck. Whether something, somewhere, feels off even when every box is ticked. That instinct is built from every founder you've met and every deal you've watched play out, and it's telling you something real even when you can't name it.

On that deal, my science was neutral and my gut said no. I let the confidence of the room override the one signal that was actually mine.

Why FOMO is so dangerous here

Angel investing runs on FOMO. You meet an inspiring founder, other investors are circling, the buzz builds, and the fear of missing the next category winner starts making the decision for you. That pressure is strongest exactly when you're new and least sure of your own judgement, which is when you're most likely to borrow someone else's.

The pedigree of the people going in made it worse, not better. I assumed their experience meant they were right, and that my hesitation was just inexperience. Sometimes it is. But experienced investors are wrong some of the time too – thats just the nature of the asset class - and they're wrong on their own terms, with their own thesis, their own portfolios, and their own reasons that have nothing to do with yours. 

Do the science properly. Run the numbers, check the market, pressure-test the founder. But when the work is done and something still feels wrong, treat that feeling as data, not as noise to talk yourself out of.

The deals other people are excited about will always create pressure. Some of the best investing decisions you make will be the ones where you sit on your hands while everyone around you piles in. Staying true to your own read, even when the room disagrees, is a skill worth building early. It's cheaper to learn it now than the way I did.

I go into this and the other lessons from my first five years in this week's video.

Next week, we are bringing ideas and discussions like this to life with Inside the Room: Where AI Meets Capital, taking place in Dubai, Friday 4 September

This is an afternoon for investors, family offices and allocators to explore where AI and capital are heading next, and where the most interesting opportunities are emerging.

We'll be bringing together a carefully curated room for three conversations around AI, investment and the opportunities ahead.

Friday 4 September | 15:00–18:00 GST | Dubai

If you're an investor, family office or allocator and would like to join us, I'd love to see you there. Reply to this email and i’ll send you the details!

Warmly,
Rupa

P.s. When you're ready, here are 3 ways I can help: