Table of Contents
Most entrepreneurs dream of angel investing after a big exit, but Auren Hoffman reveals why it's not the fulfilling endgame you'd expect—and what actually drives lasting satisfaction.
After selling LiveRamp for $310 million and pocketing $60 million personally, Auren Hoffman became an angel investor—but found the experience surprisingly hollow compared to building companies.
Key Takeaways
- Making $60 million did increase happiness, contrary to popular wisdom that money doesn't matter beyond basic needs
- Angel investing provides less satisfaction than building companies, despite the financial returns and prestige involved
- Tracking only big expenses (housing, investments) and small expenses (subscriptions, fees) while ignoring medium-sized spending creates better financial discipline
- Taking at least a year to deploy capital after a major exit prevents costly emotional investment decisions
- Most people shouldn't consider active investing until they have $3 million in investable assets—focus on income growth instead
- Process-oriented entrepreneurs often outperform goal-oriented ones because they find fulfillment in the work itself rather than outcomes
- Building genuine community and avoiding catastrophic thinking are foundational to long-term happiness and success
Timeline Overview
- 00:00–02:17 — Auren Hoffman's Big Exit: Introduction to Auren's $60M personal exit and his counterintuitive views on angel investing satisfaction
- 02:17–03:41 — Auren's Early Entrepreneurial Journey: High school temp agency business and how it funded his Berkeley education through entrepreneurial ventures
- 03:41–07:03 — First Million and Financial Strategies: Achieving first million at 25, the importance of cash runway, and lessons from the Enron collapse
- 07:03–08:16 — LiveRamp and Major Exit: Building LiveRamp from age 32 to the $310M acquisition at 40, including the Wall Street Journal crisis strategy
- 08:16–12:53 — Handling Wealth and Personal Finance: How $60M changed his lifestyle, spending tracking philosophy, and the truth about money increasing happiness
- 12:53–16:20 — Facing Challenges and Resilience: Entrepreneurial mindset about backup plans, from power washing driveways to Christmas light businesses
- 16:20–17:05 — Entrepreneurial Mindset and Community: How founders think differently and constantly spot business opportunities in everyday situations
- 17:05–19:30 — The Importance of a Support Network: Sam's pitch for Hampton community and why founder peer groups are essential during tough times
- 19:30–20:11 — Auren's Journey Post-Exit: Starting SafeGraph, building Flex Capital venture fund, and having multiple exits since LiveRamp
- 20:11–22:46 — Balancing Investments and Work: Portfolio allocation, working 70 hours per week by choice, and why angel investing feels less satisfying than building
- 22:46–30:29 — Philosophy on Goals and Happiness: Why he never sets goals, his guide to being unhappy, and the difference between process vs outcome-oriented people
- 30:29–END — Advice for New Angel Investors: Taking time before deploying capital, focusing on income growth over investing, and maintaining competitive drive
The Unconventional Path to $60 Million
Auren Hoffman's entrepreneurial journey started with a simple temp agency for high school students. He would take 10% of what the kids made, while keeping the best lawn mowing and snow shoveling jobs for himself. This early venture generated enough savings to pay for Berkeley, where he started an internet company during his third year to fund his final year of college.
His first taste of real wealth came at 25 when he hit his first million dollars around 2001. The moment felt surreal—he remembers checking his bank account and being surprised by the balance. His strategy wasn't complicated: spend low and aim for two years of cash in the bank as a safety buffer.
The breakthrough came with LiveRamp, which he started at 32. The data management company grew steadily until its acquisition for $310 million plus incentives. Hoffman personally walked away with $60 million at age 40, transforming his financial reality overnight.
What made this exit particularly impressive was how close LiveRamp came to disaster. In 2010, while raising money with multiple term sheets on the table, the team learned a negative Wall Street Journal article was coming. Their solution was brilliantly unconventional: they wrote an even more scathing fake article about themselves and sent it to potential investors, asking if they'd still invest based on the worst-case scenario.
The strategy worked perfectly. They closed funding three days before the actual article published, potentially saving the company. As Hoffman notes, "We wrote like the it was way more the article we wrote was way more nasty than anything that ever came out."
Money and Happiness: The Uncomfortable Truth
Contrary to popular wisdom about money not buying happiness, Hoffman is refreshingly honest about wealth's impact on his wellbeing. He confirms that making $60 million did make him happier, challenging the common narrative that financial success beyond basic needs provides no additional satisfaction.
His lifestyle changed significantly after the exit, but in measured ways. Following his personal finance formula of dividing annual spending by 25 to determine sustainable wealth levels, he realized he could "have a good time and enjoy things." However, he maintained disciplined spending habits, tracking only the very large expenses and very small ones.
The large expenses include housing, major investments like angel checks, and charitable giving. Small expenses encompass subscription services, late fees, and teaching his children about money through everyday decisions. The medium-sized expenses—dinners out, moderate travel—get minimal attention because they rarely derail overall financial health.
This approach mirrors his business philosophy: "You should do the extremely big things and you got to inspect the small things cuz that's where like the culture changes and that's where all the weird stuff and you should never do the medium stuff."
Even with substantial wealth, Hoffman continues working 70 hours per week because he genuinely enjoys building products and creating things. The key difference post-exit is that he loves the work without needing it financially, which removes the desperation and stress that can make entrepreneurship miserable.
The Reality of Angel Investing
Despite his success as an angel investor with exits to companies like Google, Apple, and Twitter, Hoffman admits something most wouldn't expect: "I don't get that much satisfaction investing period." This revelation challenges the assumption that angel investing is the natural progression for successful entrepreneurs.
He co-founded Flex Capital, a $200 million venture fund, but finds more satisfaction in building the investment firm itself than in the actual investing. Working with his partners Todd Hatradati and Paul Johnson provides the collaborative energy he craves, while the intellectual exercise of picking winners feels hollow compared to building companies from scratch.
The allocation of his portfolio reflects this measured approach to investing. Most of his wealth sits in safe investments like index funds, bonds, and cash. Only about 10% goes toward angel investments, though this percentage increases when including his fund contributions.
This conservative approach stems from his belief that most people shouldn't actively invest at all. His threshold is clear: "If you have under $3 million of investable assets, you shouldn't even think about it." Instead, he advocates focusing on income growth, buying time to develop skills, and simple saving strategies.
For those below the $3 million threshold, Hoffman recommends concentrating on getting an 11% annual raise instead of an 8% one, investing in personal development, and basic tax-free savings accumulation. The math is compelling—these strategies typically generate better returns than amateur investing attempts.
Goals, Philosophy, and What Actually Matters
Perhaps Hoffman's most contrarian view involves his approach to goal-setting: he doesn't set goals at all. This puts him in the minority among highly successful entrepreneurs, but his reasoning is thoughtful. He argues there are two types of ambitious people: those who map out detailed paths like Bill Clinton planning his presidency, and those who simply want to "build cool stuff" and "do cool stuff."
His philosophy extends to what shouldn't be primary goals. Since people can be born with happiness, health, and money, he believes these shouldn't be life's main objectives. Instead, he focuses on contribution to society, creation, and fulfillment—things that require active effort and can't be inherited.
This mindset influences his approach to happiness and success. Rather than teaching people how to be happy, he prefers identifying what makes people unhappy: catastrophizing situations, blaming everything on yourself, not giving others the benefit of the doubt, and avoiding community connections. As he puts it, "I can tell you what not to do rather than tell you what to do."
The entrepreneurial mindset that serves him well involves constantly seeing business opportunities everywhere. Both he and the interviewer share stories of spotting potential ventures in Christmas light installation, garbage collection, and seasonal decorating services. This pattern recognition isn't about actually starting these businesses—it's about maintaining confidence that multiple paths to financial security always exist.
Investment Wisdom for New Exits
For entrepreneurs facing their first major exit, Hoffman's advice is practical and hard-earned. The biggest mistake he sees is deploying capital too quickly after a windfall. New millionaires often start writing $250,000 checks immediately, driven by excitement and newfound confidence.
His recommendation is patience: take at least a year to gradually deploy investment capital. This waiting period allows emotional equilibrium to return and prevents costly mistakes driven by euphoria or the pressure to "put money to work" immediately.
The psychological benefit of maintaining substantial cash reserves extends beyond financial security. Having significant safe assets provides the emotional buffer needed to take calculated risks elsewhere. Even though cash generates lower returns than other investments, it enables better decision-making in higher-risk categories.
He advocates for an 80/20 approach for most people: 80% in simple index funds and bonds, 20% in higher-risk investments if desired. This strategy assumes that professionally managed companies or investments will generate outsized returns, while everything else should earn market averages without additional effort or stress.
For those considering angel investing specifically, Hoffman emphasizes that the satisfaction comes more from the relationships and community than from the financial returns. Building a network of interesting entrepreneurs and advisors provides ongoing value that pure financial returns cannot match.
The Competitive Drive Behind Continued Success
Despite achieving financial freedom, Hoffman admits he still wants more wealth, though he's uncertain about his underlying motivations. Part of the drive stems from competition—seeing other successful people and believing he's "just as good as this person and that person." There's an inherent scoreboard aspect to wealth that appeals to his competitive nature.
However, he genuinely enjoys watching others succeed, especially people he likes and respects. This suggests his competitive drive is more about personal achievement than zero-sum thinking about others' success.
His current work involves multiple ventures beyond angel investing. SafeGraph (now called Incubate) operates as a holding company for various projects, while Flex Capital continues making seed-stage investments. The common thread is building products and working with people he enjoys, rather than optimizing purely for financial returns.
The lesson from Hoffman's journey is that fulfillment comes from aligning work with personal values and interests, regardless of financial necessity. Money provides options and reduces stress, but purpose and community drive long-term satisfaction.
Common Questions
Q: Should I become an angel investor after selling my company?
A: Only if you enjoy the process itself, not just potential returns. Most find it less satisfying than building companies.
Q: How long should I wait before investing after a big exit?
A: Take at least a year to deploy capital gradually. Avoid large investment decisions immediately after your windfall.
Q: What percentage of wealth should go toward angel investments?
A: Keep it under 10% of net worth. Most assets should stay in safe investments like index funds.
Q: When should someone start actively investing their money?
A: Not until you have at least $3 million in investable assets. Focus on income growth and saving first.
Q: Does making millions actually increase happiness?
A: Yes, contrary to popular wisdom. Money provides security and options that genuinely improve wellbeing for most people.
Auren Hoffman's journey from entrepreneur to angel investor reveals that financial success creates options but doesn't automatically provide fulfillment. The key is understanding what actually drives satisfaction—often it's the process of building and creating rather than the outcomes themselves.
