What makes a good Angel Investor?
A friend of mine showed me The Funded website about 6 months ago and I always thought that it was a cool idea. I liked how it flipped the tables and allowed entrepreneurs the opportunity to rate and speak out (for good or bad) against VC firms across the country. Since then, I have thought about (here’s a free idea for someone — if you are interested, let’s talk) putting together a similar site dedicated towards rating angels and angel groups, but thought that it could possibly jeopardize my role at FundingUniverse.
To me, anytime you can put more information in the entrepreneur’s hands, the better. Why? Well, we all know that there are some angels out there that put together ridiculous deals (usually because the entrepreneur doesn’t know any better). In the end, the company and the entrepreneur suffer. The problem is that the word never gets out and so the angel keeps doing bad deals and more entrepreneurs suffer.
Luckily (and I mean this sincerely), the majority of the investors that we work with at FundingUniverse don’t fall into this category. Most understand how to structure a good deal that will help the company to grow and motivate the entrepreneur (because he/she maintains controlling interest in the company).
Since this train of thought has been on my mind today, I wanted to get your opinion and ask you (all 4 of my regular readers) the question “what makes a good angel investor?”
- Is it the terms that the investor negotiates?
- Is it the strategic experience/expertise that he/she brings to the company?
- Is it his/her connections?
- Is it strictly the cash?
Those are just a handful of questions to get your mind going. Those of you that have had angels invest in your company — what has been your experience? I’d love to hear good or bad.
First I want to say I have not yet found an Angel Investor for my business idea.
To me the ideal angel investor would have a passion to invest in a truly new retail/ entertainment concept.
They would have experience in big box retail marketing or would have contacts in the field. The investor needs to be a visionary that thinks outside of the “normal big box”
They would need to be fair with there terms of investment or open to negotiations and would take an active part on my board of directors, but not want to run the show.
I know there are angle investors out there that are like this and in time I will find my angel. Perhaps your are that angel!
Sincerly,
Pat in Illinois
[...] still waiting for a few responses to my last blog entry, but I’ve had some interesting thoughts about the question (I know… it’s kind of [...]
In regards to the question: “what makes a good angel investor?”
It has been our experience that “The best Angel Investor is an individual who falls in love with and has completely embraced the entrpreneurs vision as their own.” Our angels love our idea, they love what it is going to do for our client, they love what it is going to do for the clients customer, they love how rewarding it is going to be, they want to be a part of what we are doing in any way they can and they have shown it’s not ALL about the money.
As a result, the relationship between us has proven to be a lifesaver and they have been there for us in every way to help us acheive our goals.
Because of this kind of relationship,
1. They did not want to rape the company and they desired fairness in the terms, (they could see that we wanted it to be exceptionaly lucrative for them as well)
2. They have commited their resources on every level, from contacts throughout their network, to strategic experience and expertise
3. They have allowed us to make a few mistakes, in spite of the fact that they knew in advance they would most certainly be mistakes.
4. They have shown utmost respect to our passion as entrepreneurs and inventors.
Brock,
I’m sure you have more than 4 readers. I quite enjoy it anyway.
As I have no experience with angel investors or a company of my own, feel free to disregard this.
However, if I were to receive money from an angel investor, I would want him to be much like my dad:
1-Someone with experience in starting a successful company himself
2-Someone interested not only in my company’s success, but in my personal well-being
3-Someone who knows how to work and would be committed to working with me.
That’s my two bits anyway.