I hosted a daily poker game in 2020. We played non stop for months before burning out. A new player Akash, a friend of friend joined us. He came in. Crushed everyone. He invited me to play with his other group. I did. And lost ~30K playing in group. In a month. Then I gave up.
Akash was kind enough to tell me where it went wrong for me: It was dumb to play at his table because my risk appetite as well as bankroll was too low. People in that table ago down by 20K in an hour, then come back, and recover the same the next day. Sometimes end up double of that. They do not get upset over a 50K loss in a night. They survived the downswings. And came back again.
I am not a bad poker player. I have made decent money if you count all the tournaments and cash games I have played till now. But I am not someone who is willing to go all in again and again till I double up.
That is what a prominent angel investor did once when I played at his place. Kept challenging that he will double his money in the next 15 mins. I knew my poker bankroll was not the same as his. So I tightened my game.
Over time, I learned to not play with people who had a bankroll far above mine. Table selection is key in poker. And in life.
I also saw the graphs of professional poker players on pokerguru. Their stats are public. These pros have months of downswings. They would go down by 10L- 50L before they won one big tourney and break even. But what if you do not win that one big tournament? That happens to a lot of poker players. And eventually they get out of Poker.
Yes, a lot of these players are staked. Without staking it is very hard to survive as a poker player today. People might go on a heater and make a boatload and use the bankroll to play the stakes they want. But that is more of an exception than the norm. Most poker players lose money. Even the best Poker coach in India has a losing record.
Angel investing and Poker are not different.
You need good bank roll management. You have to take sufficient swings. Let’s say your average check size is 3L. It is the lower end of the spectrum. People who have made good money in this game, invest a lot more. Even with 3L check sizes, you will need to invest atleast in 100 startups [similiar to 100 buyins rule of poker]. You need to beat variance. The best player in this game, YC does the same. So you need a bankroll of 3 Cr. I don’t have 3 Cr lying around. And ideally you should not invest more than 5% of your networth in an asset class that is so risky that it can easily go to 0. And yes, you can go on a heater like Sacca, but most investors will lost money if they don’t take enough swings. I doubt I will make any money with the <10 bets that I plan to take over the next couple of years. Most startups die. And my sample size would be too low. I feel I have only invested the money I can afford to lose. There are other benefits to doing it. So maybe it is okay for me. But it is a dumb idea to start investing from a strictly ROI standpoint unless you can investment in 100+ startups.
So think carefully before starting.