#1 — Passionate & Trustworthy Management Team
It might sound very cliche to start the list off with the standard answer of “Management Team”; however, time and time again, I have seen that the final decision of the angel rest on his/her confidence in the management team. I love how Craig Bott, CEO of Grow Utah Ventures, framed this concept:
“Like most investors, we invest in entrepreneurs. We do this because we know that the business plans and all of the projections will probably change. The only one constant will be the entrepreneur.”
When an investor is considering a possible investment in your company, she must have total confidence in you as an entrepreneur. Because angel investing is risky (only 1 out of 10 investments are likely to produce a large return), they have to trust that you will execute with their investment. Not only are they giving you their money, they are trusting you with the keys to the car!
Here are a couple ways that you can show that you have a passionate management team:
- Put “skin in the game.” What are you sacrificing in order to make the company successful? Have you put your own money into the company? Have you worked for free?
- Bootstrap. Can you show that you can execute on little or no cash? Negotiate with your customers to get up-front payments or with your vendors to delay payments.
Here are a couple ways to show your integrity:
- Be completely honest in everything you do or say. Make sure that you are “fudging” or exaggerating your business plan. As soon as an investor finds out about 1 red flag, she will have reason to believe that there will be more red flags.
- Say “I don’t know.” How many times have you tried to wing it when someone asks you a question? It’s easy to see when people are starting to wing it, so don’t do it. You can honestly say that you don’t know the answer and then take advantage of the opportunity to follow-up the next day with the answer to a question.
Of course, all of the passion and integrity in the world can not replace talent; but, I will go out on a limb to say that talent + passion + integrity CAN replace experience. It is not requisite to have an experienced management team — there are other ways around that (i’ll go into more detail in a future entry).
