I will buy stocks when the mood is bad and I will buy stocks when the mood is good. What matters to me is liquidity and an iPhone.

I have learned that when I angel invest in startups, only math matters. Today, the mood is still white hot in the angel investment world I live in.

Entrepreneurs have access to capital, talent and bandwith like never before. Scale is a few pixels away. The math has been completely thrown out the window.

In 1999, I invested in a few web startups based on the mood of the market. Nine years later when I tallied up the results as everything had been acquired or shut down, I was up slightly. That was due to an outlier in Rent.com that defied the math of my initial investment.

In 2005, when I got serious about investing in startups, I got serious about math as a strategy. First I had to love the people of course , second came the price and structure (math). If the math did not make sense to me, I would pass. No early stage Company knows what lies ahead in a year so I have my ground rules. I don’t think angel investors think hard enough through dilution, odds and liquidity when funding angel investments. I have seen a Lifelock, A Buddy Media, a Twitter, an Assistly and a GolfNow. I have also seen companies not be able to get an A round because the mood quickly changes or the adoption is not fast enough. There is no partial getback. There is a lot of zero’s. When you invest in Angel rounds, you have to grind on the math because from that point on, the money raised grinds on you. The VC’s with their pro-rata shenanigans, the pivots, the extra time to solve a problem…the entrepreneurs call it one thing, the VC’s will call it another, but the math is what will matter when you have to get out. The better your math getting in, the better your odds at getting something on the way out.

When you do not have liquidity, think math over mood.