Angel investors are not “friends & family” money
During one of my meetings with Bill McMillen of the Gold Coast Venture Capital Association, he said something that I thought was very interesting (and I’ll paraphrase):
“One of the things that entrepreneurs need to be taught is that angels are not friends & family. We are not investing in the entrepreneur because she has a great personality. We are investing in the entrepreneur because she can execute on a market opportunity.”
Comments like these and other actions that many angels are taking really support the thought that angels are becoming more like VCs. With the increase in angel investor education, their investments are becoming much more sophisticated. What does this mean for us entrepreneurs?
Even though the investment market is very entrepreneur-friendly right now, it means that only the best entrepreneurs with the best opportunities will be funded. There are a few things that we are doing at FundingUniverse.com to make sure that the best opportunities are the ones that our investors will see:
First, we are implementing a rating system. The system will both objectively and subjectively rate every deal that is submitted in order to sift the “wheat from the tares.” Second, if the deal has not received the highest rating, there are products and services that we are developing to help the entrepreneur improve. Financial helps, pitching tips, business plan evaluations, coaching, idea help, angel investor “funding evaluations” and more will all be offered to help the entrepreneur be “angel ready.”
Our goal is to introduce good deals to active angel investors. We want every deal to become worthy of angel capital. Once this system is implemented, only the deals with the highest rating will be allowed to present at our Speedpitching Luncheons (which is basically what is happening right now because all applications go through a screening committee).
The last idea that we are thinking about is to offer a full refund on any purchase that has been made with Funding Universe if your deal gets funded by one of our angels. We believe in our entrepreneurs and believe that our services will help them to be more prepared for today’s sophisticated angel investor!
