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Would You Invest $10,000 in a Friend’s Startup? Are You Friends If You Don’t?

In Silicon Valley, angel investing has become a key form of social currency.

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Illustration: Ian Grandjean for Bloomberg Businessweek
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Maia Bittner is an angel investor, and she has a lot of friends who’ve founded startups. Sometimes they ask her if she wants to put money into their companies. Bittner used to feel prickly about it—she didn’t want them to assume she’d write a check just because they’re friends.

At some point, however, she realized that being buddies with someone was a great reason to write them a check. “The fact that they are my friend means there’s something cool and interesting about this person,” says Bittner, who’s founded two companies of her own: Rocksbox, a jewelry rental service, and Pinch, a fintech startup. For someone she considers a good friend, she’ll sometimes invest blindly, without knowing what the company does, because she trusts their judgment. “Investing in my friends is super cool,” she says. “I get to support them. If they do well, I do well. If not, I’m helping them be entrepreneurs.”