Esther Dyson on the Angel Crowd: It’s “Very Self-Referential”

If Ron Conway is the godfather of Silicon Valley, Esther Dyson might well be considered the godmother.

At least, Dyson has been actively angel investing in startups roughly as long as Conway, and her track record – given the comparatively small number of companies she has backed – is nearly as impressive.

Dyson backed, for example, both Powerset and Medstory, two search engines that Microsoft went on to acquire. (Microsoft bought Powerset in 2008 for a reported $100 million; the price tag for Medstory was never disclosed.)

She was also an early investor in Dopplr, MetaCarta and Plazes – all sold to Nokia. (Dopplr, a social network for travelers, sold for around $13 million. Metacarta, which specialized in geographic intelligence, and Plazes, a Berlin-based location-based social network, sold for undisclosed amounts.)

Others of Dyson’s hits include Flickr, the online photos sharing service sold to Yahoo in 2005 for a reported $35 million; the ad retargeting firm Dotomi, bought by ValueClick for $295 million; and Yandex, Russia’s most popular search engine, which enjoyed a highly successful public offering last May.

Naturally, when I began work on a story about female angel investors this week — and why we don’t see more of them — Dyson, who mostly lives in New York these days, was the first person I called. Our conversation has been edited for length.

Why don’t we hear more often about women in some of these large syndicates of seed investors?

Because the press never calls us. They call us only when they want to talk about female angels. I’ve been here all along, I’ve been investing in all kinds of things.

Are there any women with whom you periodically coinvest? Are you part of any network that you work with routinely?

I’m on AngelList, I’m part of New York Angels. I’m not part of the female circuit; I’m part of the angel circuit. But maybe that’s just New York. There are a bunch of women angels here, including those involved in Golden Seeds [an angel network that’s comprised of mainly women, who back female entrepreneurs] and Astia [a nonprofit group that advises female entrepreneurs].

There are fewer women than men. But if you have the money, [startups] will take it.

Including the most promising startups? It often seems like entrepreneurs try piecing together a Who’s Who of angels when syndicating their deals.

Well, first, I’d argue that the most “promising deals” are…overpriced. I think the most promising deals are those that aren’t the video sharing sites, or the Paths or the Colors or the ex-Facebook buddies who are getting a $20 million valuation on the basis of nothing.

There’s this presumption that you need to be part of that circuit, and I think that crowd is very self-referential and missing the truly interesting companies. Later on, you want your deals to be famous, but you do better if you don’t pile into what are perceived as the “best” deals.

Do you believe that more women who could be angels don’t appear to be drawn to investing?

I agree that there aren’t enough female angels. It would be nice if more women would think, ‘Gee. I have this money. Why not invest [some] in startups? That thinking is probably not widespread.

Have any theories about why more women don’t think about it? Dozens of men emerged from Google to invest, for example, but you seldom hear about their female peers doing the same.

There were far fewer women [employed by] Google. I mean, Sheryl Sandberg is a famous example, but she’s kind of busy. I also think it’s partly a question of role models, as well as whether you have the money in the first place.

But you believe that if you have the guidance and the resources…

[F]or those who can and want to do it, it’s not a challenge, getting to the best deals. It’s a lot easier being a female angel than a female entrepreneur. It’s much easier to invest money than to [attract] it.”