Love in the time of cap tables, pt. 1: why marriage & angel investing are the most delusional things you can ever do
Part one of a two-part guide to understanding love through capitalism
Have you ever gotten an email from an ex worth remembering? I’d like to think they’re lamenting “oh noooooo, I fumbled Ani” but the reality is underwhelming, like the guy who earnestly told me over hamburgers at an Island’s that he envisioned a golden retriever life and type of happiness, practically pitching me on $RETRIEVER or RetrieverDAO as a protocol, which is why I suppose years later, he was sniffing around other yards when I randomly got an email from him titled “Hey There” attempting to re-establish contact but neglecting to mention he was about to get married, all this info readily public on social media. “Hey There“ is the pitch deck of a man where nobody would fund this startup, yet 2 million Americans do every year.
After you’ve seen enough people marry and divorce and try to make it work with all sorts of measures in between and after you’ve read enough about venture capital, it becomes striking how taking the leap of faith to marry is just like investing. You’re betting your entire portfolio on one volatile asset with no liquidity, no ability to diversify, and a virtually 50% historical failure rate.
This is a two-part essay. In this first part, I’m going to walk you through what marriage actually is as a financial instrument like in angel investing, why anyone would sign this deal, and the due diligence everyone skips because they’re in love. I’m going to be thorough and by the end you will deeply question whether anyone should ever marry at all outside of sheer self-interest.
In the upcoming part two, Love in the Time of Compound Interest, I’m going to tell you why you should consider it anyway. That’s because I’m a romantic and I contain multitudes and contradictions and so does love, actually.
Finance people already know some of this, everyone else is about to learn it, and by the end you’ll either be a better investor or a worse romantic. Probably both, but like and subscribe for updates to let me know.
Tangentially, if Marc Andreessen is reading this (and I know some of you little trolls at a16z follow me), let me just say that I know you’re a wife guy, I saw the way you guys looked at each other during a conference at Stanford last fall and it was sweet because the way the man drones and drones and drones on really does bring to mind ASMR (Andreessen Sounds Make Relax) but his wife was just diligently, patiently, lovingly almost seemingly in rapt attention watching him with a grace that should never be bestowed upon any man. It was the most enthralling sign of human life I had seen on that campus all day. Anyways.
My goal with this series of ‘Love in the Time of…’ essays during the week leading up to Valentine’s Day is simple: I want to put together a comprehensive guide to understanding love through capitalism, which is fitting since both are elaborate pyramid schemes that require constant growth to survive.
Consider this your prospectus. Read it before you sign anything, and since I know my first husband is out there somewhere in the ether and I’ll be his second wife, hi babe, nice to see you here, I’ll assume you did your reading. Or ceteris paribus I’ll send this to you anyways and ask what you think. So let’s dig into what angel investing is, why it is delusional, and how that’s just like marrying.
Strangelove: what angel investing actually is
Before we get into why you should or shouldn’t bet your life on another person, let’s establish what we’re actually talking about. In the anatomy of a deal, this is the part where we define the financial instrument itself, because you should probably understand what you’re buying before you sign for it (but c’mon, be honest, think of that David Beckham GIF - when is the last time you truly read the terms and conditions of a thing? I love them but that’s because I have a law degree I’ve never used.)
Angel investors are people with too much money and not enough sense (usually) who give cash to startups. In the investment lifecycle, they’re the earliest money in. Before venture capital firms, before institutional investors, before there’s any proof anything works, they get in when a company is just a founder and an idea, betting entirely on potential and PowerPoints, if not on vibes alone. They’re called “angels” because they appear when you’re desperate, everyone else thinks you’re insane, and you need someone stupid enough to believe your hallucination might become reality who isn’t a drug dealer.
This is literally what marriage is. You meet someone and you decide to invest your entire emotional portfolio in their unproven ability to remain functional for the next 40-60 years. You’re the angel investor to their startup, except the startup is two people pretending they have their shit together and the exit strategy is death or divorce court or all manner of destruction in between.
That’s because what marriage actually structurally is resembles a startup. On paper, it is a 2-person organization optimizing for joint utility under conditions of radical uncertainty. It has a cap table, which in finance is the spreadsheet that tracks who owns what percentage of the company, except here it’s who owns what percentage of the shared life, the house, the retirement accounts, the emotional equity, the golden retriever, whatever, and it’s probably hosted on Google Sheets if not an Excel file. If you don’t have a ledger articulated, don’t worry, there’s a mental one running, I’m sure of it.
Both marriages and start-ups also deal with the burn rate, which is how fast a startup spends cash before it generates revenue, except here it’s how fast you’re depleting each other’s emotional and financial resources. It has operating costs (mortgage, kids, therapy, the subscription to the meditation app neither of you opens when especially vexed), and a board of directors (which often includes an in-law who has veto power they never formally received but usurped through emotional jihad and financial wrangling especially if there’s things like trusts involved, oh my). The only difference between a marriage and a Series A (that’s the first major round of venture capital funding, when the startup goes from scrappy idea to actual company with actual money and actual obligations) is that VCs at least pretend to read the financials, I guess.
In finance, this insane agreement gets documented in a term sheet, which is the document that outlines who owns what percentage, who makes decisions, what happens when someone wants out, and what everyone’s rights and obligations are before a single dollar changes hands. In marriage, we have vows, which are just poetry about eternal love written by people who think “till death do us part” is romantic rather than a legally binding threat. When Kanye hollered for prenups, he was really just pointing out the importance of term sheets. Feelings are temporary, but asset division is forever.
So that’s what we’re working with when we think of marriage as a concept: it is a loosely regulated startup with two co-founders, no business plan, and a term sheet written in iambic pentameter. We’ve defined the instrument. Now the question is: why would anyone sign this term sheet voluntarily? Which brings us to the investment thesis, meaning the reason anyone writes the check in the first place, because why would you marry to begin with? Your partner could be acting like a dog emailing an ex right before your big day and the big days of your life after.
Personal Jesus: the investment thesis for marriage is to hedge existential risk
We’ve defined what marriage actually is as a financial instrument. Now we need to understand why anyone invests. In deal terms, this is the investment thesis: the argument for why this bet makes sense despite the numbers screaming otherwise.
The obvious question is why anyone would invest in marriage at all. The math doesn’t always work, the risk profile is insane, the due diligence is a mirage, and yet people keep doing it, which means the motivation exists somewhere outside the spreadsheet.
Financial modeling can’t determine if a career takes off (or doesn’t) for future cash flows, no Bloomberg terminal can predict the catastrophe of a health event shattering any semblance of normality, no Monte Carlo simulation (that’s a risk modeling technique that runs thousands of randomized scenarios to estimate probable outcomes) accounts for the variance of someone’s mother showing up unannounced with opinions about your parenting, no stress test covers what happens when one of you gets the job offer in another city and the other one doesn’t want to go, you get the picture.
In venture, angel investors don’t fund startups because the numbers make sense. They fund them because of vision, meaning that they see something they believe in before anyone else does and they want to be part of building it. Marriage is the same irrational conviction dressed up as a life decision. It’s the functional application of “I can fix them” for some, a meal ticket for others, and everything in between. Whether that vision is generational money to get your grubby little hands on, trauma bonding, a fear of being alone, settling, inertia, whatever, the vision varies, but vision of some sort is always involved in marrying, even if it is tunnel vision or badly envisioned. I promise I’m a romantic, I swear, my vision is just bleak because of astigmatism, I think.
To be fair, it is romantic to provide belief to a vision when others don’t see it yet. There is something intoxicating about the idea of not being alone in the choose your own adventure of life by amassing emotional capital during the grind (and the grind is relentless because the grind is just life), and a partnership infrastructure (which is really just the unsexy scaffolding of domesticity and support and companionship and someone who remembers you’re allergic to shellfish and that your favorite now dead uncle’s birthday makes you sad.)
You’re providing long-term commitment through uncertainty, which is just another way of saying you’re choosing not to hedge. In finance, hedging means taking an offsetting position to reduce risk, like buying insurance on your portfolio. Choosing not to hedge means you’re all in on one person as one bet, no safety net, just one person, the one, the one with the ring who is not Frodo (which apparently is not in vogue anymore, is it? Or have polycule harems already had their moment? Please let me know which is so back versus which is so over).
That bet means taking on an active participation in their success, not passive holding, not index fund energy (an index fund is the laziest investment strategy: you buy everything, you do nothing, you wait; the opposite of what marriage demands, but to be fair, very pillow princess-y), so yes, it is a vision of actual hands-on operator involvement in another person’s existence. That can be romantic or it can be a nightmare. Or it can be mid.
In any case, the exchange with marriage is that you get equity in (an assumed) shared life outcome, access to resources and networks that compound when combined between people, returns on mutual growth that don’t show up on any balance sheet but change your life trajectory entirely (sometimes for better or for worse, see the Bezos arc recently) and much more.
Yet nobody seems to be calling marriage as what it is, which is just hedging existential risk. In theory, having a solid co-founder halves the load (or it should). A good partner doesn’t just add to your life but they create optionality (in finance, an option is the right but not the obligation to do something, having options means having choices you can exercise or not; in marriage, optionality means your partner’s stability gives you the freedom to take risks you couldn’t take alone) you didn’t have alone both personally, psychologically, professionally, and perceptually.
Marriage teases the stability to be in a unit that allows you to take bigger swings, make career pivots, take creative risks, and all that jazz because your domestic foundation isn’t actively on fire and you know you will be supported and in a safe space and bla bla bla (I’m not a fan of jazz and I think it is remarkable, beautiful, really, truly, madly, deeply that so many people are married to people who not only like jazz, but love jazz, and play it constantly. That’s amore, baby. It has to be. Because jazz sucks, sorry, not sorry.)
So this is the thesis: that all angel investing is delusional, just like marriage is delusional, and that’s because angel investing and marriage exist to hedge existential risk.
We’ve now covered two parts of the deal anatomy that reflects how marriage and angel investing are the same thing: the instrument itself (marriage as startup) and the investment thesis (irrational conviction plus existential hedging). The question isn’t whether the thesis is rational, however, because people marry all the time. In fact, as I write this, I am sure people are getting married by Elvis impersonators as we speak. The question is whether one has done enough homework to know what they’re actually betting on, which brings us to the part everybody skips far too often both in angel investing and in marriage: due diligence.
Policy of truth: red flags, green flags, yellow flags, but do they listen to Black Flag? Why due diligence matters in investing and in marrying
We’ve defined the instrument (marriage is a startup), we’ve covered the investment thesis (it’s delusional but it hedges existential risk), and now we arrive at step three in the deal anatomy: due diligence, which is the comprehensive investigation you’re supposed to do before you write the check.
In finance, due diligence is the process of verifying that what someone is selling you actually exists, actually works, and isn’t going to blow up in your face. In marriage, this is the part most people skip because they’re in love, or vibes, or thinks it is irrelevant or we’ll deal with it as it comes. No one really wants to sit down and examine what all their risks are and how they’d handle a divorce to talk through it as an existential risk before even marrying (though I would and I can’t wait to write about it if it happens).
Due diligence in investing means determining whether this company is legitimate or three guys who went to Stanford who are being funded by three other guys who went to Stanford. Ideally, you check everything: finances, history, projections, whether the CEO has a criminal record, whether they describe themselves as the type of person who works hard and plays hard. In dating, they call this “getting to know each other.”
In dating or courtship or courtship dating, we call things to evaluate and assess someone and their behavior and actions through analogies to red flags, green flags, yellow flags, and occasionally flares, if not five fire alarms.
In investing, due diligence does the same thing by analyzing the track record of those involved in the deal, which in courtship dating is something like the common advice of the service worker test. I’m sure you’ve heard it somewhere that you can tell a lot about a person by how they treat people who can’t do anything for them, right? Not because it shows character (though it does) but because it’s the only time you see their behavior when there’s zero ROI (return on investment, i.e. what you get back for what you put in; in this case, there’s nothing to get back from being nice to a waiter, which is exactly why it’s revealing).
Now, this is not a foolproof method because some people are really good at guising their behavior (especially early on) with external third parties or when they know they’re being watched, etc. But this litmus test of due diligence through someone’s behavior in interacting with third parties is similar to an unguarded cash flow statement (a cash flow statement shows where money actually comes from and where it actually goes, as opposed to what the company claims; someone’s behavior when no one important is watching is their real cash flow). The waiter, the Uber driver, the customer service rep they’re screaming at: hate to break it to you, but that’s who they actually are.
Again, while not foolproof, it serves as a measure, which is also critical when considering prior exits. In venture, an exit is how an investor gets their money back, whether through acquisition, IPO, or the company dying. In dating, prior exits are ex-partners. Are all their exes “crazy” or “narcissists”? Congratulations, you’re about to become the next chapter in their anthology of blame. Get references from exes, siblings, longtime friends. What do people who’ve seen them under pressure actually say? What happens when the levee breaks?
Then there’s the financial audit and the one I call the emotional solvency audit. Solvency in finance means a company can meet its long-term obligations, and that it’s not just surviving today but structurally sound enough to survive tomorrow. Emotional solvency is the same thing: can they generate their own happiness or are you their sole supplier? Are they emotionally solvent with actual life plans, ambitions, goals, career trajectory? Or are they running a permanent deficit you’re expected to finance?
Obviously, in due diligence, you’d check their actual finances too: credit score, debt load, spending habits, financial literacy. Someone who can’t manage money can’t manage emotions, since they’re the same executive function. Someone who has money but can’t manage their emotions will spend that money buying love, whereas someone who doesn’t have money and can manage their emotions is usually just pre-revenue (in startup terms, pre-revenue means the company exists and has a product but hasn’t started making money yet; and we’re rooting for you baby!).
And all of this digging around like a nosy aunty, and we haven’t even gotten to founder-market fit, which is whether this specific person is the right co-founder for this specific life, or whether you just both like dogs and hate the same people.
We haven’t gotten to runway, which is how long a start-up and a marriage have left before they die and/or run out of resources, and how the sunk cost fallacy will trap you into celebrating an anniversary while secretly googling “how to disappear completely.”
We haven’t stress tested whether a partner can scale with you or whether they’re in arrested development playing Xbox while a child needs a bath.
We haven’t even audited hidden liabilities like family health history, the ex who texts with insider info at 2am with a frequency that would concern the SEC, or any risks that no due diligence can ever screen for like mortality, competition, financial contagion, or the fact that the person you married might not exist because their entire personality is a performance and effort always runs out eventually because that’s thermodynamics.
All of that will come with part two of this essay titled Love in the Time of Compound Interest. Along with, yes, the case for doing it anyway because love in the time of cap tables is just the spreadsheet. Love in the time of compound interest is what happens when the returns start compounding. I told you I was a romantic. Occasionally. I am 100% always a cat person though, and find golden retrievers far too dumb and clingy.
