My counter argument is... Kleiner's Tom Perkins had infinite people resources at HP when he formed his ideas about funding ideas, so it's no wonder he likes the horse.

I guess, I'll add my 2 cents... Then you read the book “Good to Great” by Jim Collins that talks about building a great team and they can do anything and be successful at it – which I believe in. But I also believe that without a sound business, success is limited.

This is an interesting study with some valuable data points. It does not even come close to answering the debate for an early-stage investor. Simple common sense and general knowledge informs us that it is the very rare exception that one person leads a venture from inception to listed success.

As was a repeated theme at all the Angel conferences this year (Australia, EBAN, WBAA, ACA), Angels are no longer expecting their investments to be picked up by VC and taken to IPO and beyond. So, if we are investing in early-stage and seeking rapid value growth to underpin a strategic value trade sale within five years then our endeavours are merely the first data point in this study.

Now, if someone could do a study that detailed performance from inception to Angel investment and from Angel investment to strategic value exit then that would be worth something to our community.

For an early-stage venture the risk is almost all in execution and that is about people. Betting on a jockey with no horse makes no sense. Betting on a horse with no jockey makes no sense. Clearly, one needs both but, the jockey can make the horse jump in the steeple chase when left to itself the horse would just turnaway from the challenge.

We all vary in which aspect we assess/judge first but, only a fool ignores the other aspects of the venture. People make the difference and if the founders aren't the right people when we invest then we have probably made a mistake but, they almost certainly won't be the right people at some time after we have invested. The right jockey for the horse and the course is the answer.

“Tom Perkins had infinite people resources at HP…” Frank? Isn’t that saying he has an infinite payroll overhead and so he better be right because he’s going broke fast if he is not? You call it a counter argument but it reads like you are proving him right.

Common sense tells us that the question to answer is not which is more important, the Jockey or the horse, that question is simply a gimmick for someone who wants an easier process to cling to. The real question is how is the time of Angel’s best spent. Do they look for the Jockey first or look for the Horse first?

The data in these reports that attempt to decide if the Jockey or the Horse is more important continues to lump good data together with bad data and claim that all data is equal; a very unscientific approach. Clearly the only way to definitively answer the question is to look only at those investments with good returns and identify which approach was used by those investors.

The only way to prove the data is capable of answering the question is to first prove that the venture consisted of either a good horse or a good jockey or both. When data from underperforming investments is used, we are assuming and not verifying whether or not they contained a good jockey or a good horse. Until a report on this subject claims to only consider successful investments, it is not worth reading. And until someone who is voicing an opinion on this subject is only looking at successful investments in order to form their opinion, they are not worth listening to.

Every time I have ever heard someone say the jockey is more important they always end up saying they have to have the right horse in order for the jockey to matter but they never admit that they just said that.

Many times on the Frank Peters Show we hear Frank and other Angels talk about the importance of the Jockey. They say the product or service doesn’t matter because it is going to change. They want the right people because changing people is difficult. They say they bet on people not the product. So in other words they are looking for people who will find the all important “right horse”; people to do the work they didn’t do as an investor.

If the Jockey was more important, for every underperforming investment it would be very easy for any Angel investor to point to a competing company with the exact same product that is producing good returns.

The emotion we hear in Frank’s voice is contradictory to his expressed opinion of betting on the Jockey. Just recently we heard the excitement in his voice when he did his show about Vokle.com.

Saying Vokle is a hot product in a hot area, the emotion in Frank’s and Ray Chan’s voices are as if the clouds parted, the sun is shining, and the birds are singing. I’m not saying that is inappropriate, but it is in relation to the product and not the Jockey. I have yet to hear the show where the same enthusiasm is expressed over a Jockey.

The real issue is that we have never proven that we should even be asking this question or looking at the problem from this perspective. The more appropriate question is which is the cart and which is the horse? The product is the horse and the Jockey is the cart. To give more importance to the Jockey is to put the cart before the horse.

Many times we have heard Angels on this show say they don’t invest in the seed stage or development stage, some even say they want to see revenue first. But then these same Angels say the product or service is going to change, which means they are in the seed stage (research stage), and sometimes find out they are not going to get a return.

So doesn’t it make sense to research the needs of the market more thoroughly before making the investment? We always see the same Angels and same VC firms making the top of the list of the most successful year after year. Isn’t the proof already in the pudding?

In the show on Vokle, Frank did not take the opportunity to answer the question he told us many months ago (maybe a year or more) that he was researching. Frank was interviewing other successful Angel groups for the purpose of identifying a better or the best way to go about Angel investing. We never heard the answer or heard what direction his research indicates. We never heard what data Frank is using and how he is interpreting that data.

We know from the show on Vokle that Ray Chan gave up on the TCA and Angel Soft process, and created his own process. We know that Vokle was not interested in the TCA process. We know from other shows that many entrepreneurs are not interested in the TCA process. We know from TCA press releases that “new” TCA deals are actually follow on rounds and not new companies. So the fastest way to get TCA money is to first get funded elsewhere. TCA wants someone else to do the homework.

Recently Frank has had several shows in which he contradicts what he has long been saying is the way to get funded or the way to invest or the way to run a company. Then he goes right back to saying do the things he just said are impossible to do. So it would have been great to hear the difference of Ray Chan’s investment process but the many months old question that Frank said he was seeking an answer to was never asked.

Instead we get this schizophrenia of one show saying to do such and such, followed by a show saying it is impossible, and then followed by a show once again going back to saying to do the thing that was just previously said to be impossible.

In the past Frank has said he wants to get a dialogue going on his website but he doesn’t participate in the dialogue. So there is a lack of exchange of ideas on how to invest, and a lack of verifying if ideas on investing hold up to scrutiny. This leads to no improvement in the content of the show.

The show sounds a lot better with Frank taking voice lessons. I understand that no man is an island and things happen one step at a time. So maybe when Frank is satisfied with the improvement in audio quality we will later also see an improvement in content, instead of this bouncing back and forth of saying to do opposite things.