Trond Wuellner is a Director of Product Management at YouTube focused on creator empowerment. Previously, he spent 13+ years at Google, leading new tech development for global products like Google Wifi and Chrome OS. 

In the second piece of this two-part series, we sat down with Trond to explore some of his frameworks and best practices as an operator-investor. Our conversation dives into: 

1. Balancing financial risk and reward as a new angel investor
2. His framework for analyzing an investment’s key variables
3. Embedding a clear moral code in your investment thesis

“The deals I’ve learned the most from are actually the ones that didn’t go well.” 

The reward doesn’t come without risk — and vice versa

According to Forbes, 5–10% of all angel investments are profitable. Needless to say, angel investing is one of the less stable career moves someone can make. 

Investing in all cases is ultimately balancing risk and reward, profit and loss. In other words: You can’t turn a profit without accepting the possibility of some financial loss at a minimum. 

This is definitely true for Trond’s mental models. 

He considers angel investing a game in which all possible risks and rewards must be weighed to effectively evaluate the big picture of a business. 

You need to measure up your best-case scenarios with your worst. The key is treating the two as inseparable because, in the end, they’re pieces of the same equation. 

“It helps me understand why the answer should be ‘no’ when the deal otherwise sounds right.” 

“That’s always the trade-off you’re trying to balance: How manageable are the risks vs. how large is the potential upside?” 

The value of moving past standard KPIs to “key inputs”

With every investment, Trond deeply considers the key inputs into a business to thoroughly assess its prospects. 

The specific inputs of a business depend on its industry, business model, etc. For instance, Trond points to manufacturing as one area where we see distinguishable key inputs. 

Supply chains have been wildly unpredictable for years now, resulting in higher costs than business owners expect. Even simple things like aluminum for producing cans have seen massive price hikes. 

As such, certain startups have struggled to manage and build inventory to satiate customer demand. These bottlenecks understandably slow growth — and there are no clear roadmaps to navigating around this blocker. 

These are the sorts of inputs and conditions that Trond will prioritize (and insists every angel should prioritize) over more conventional metrics like market conditions, NPS, etc. 

To thrive in such a high-risk arena, angel investors need to tread deliberately and strategically. 

“Unfortunately, even when you see pull from customers and people in the market really loving the product — that oftentimes isn’t enough.” 

Deal criteria: is this investment actually good for society? 

Trond asks himself that question before deciding on any investment. In terms of non-negotiables, it’s just as crucial to him as baseline performance data. 

Historically, most VCs and angels would deprioritize this piece of the assessment. For Trond, he can’t afford to ignore it. 

So, what does it mean for a business to be “good for society”? 

In short, Trond is looking to make the world a better place and improve humans’ day-to-day living conditions through his investment dollars. 

That starts at the very top: “The founder can’t be an asshole.” He’ll only consider a company if he knows he can believe in its team, mission, and values wholeheartedly. 

“They also have to put execution first in their approach — but do so while being kind.” 

“I want to invest in businesses and people that are working earnestly to make the world a better place.”

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