The Entrepreneur’s Investor
I’m 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 sad that I’m answering my own question :)). A few months ago, I went to breakfast with Phil Reed (partner at Highway 12 Ventures) and he made a comment that has stuck with me since then.
“I like to think that our success has come because we are an ‘Entrepreneur’s Investor.”
What Phil was explaining was that he and his partners didn’t start out their careers as investors. In fact, most of them were successful entrepreneurs that decided to turn to the “dark side” to do some investing. He explained that he believed that to be a real advantage because he knew what the entrepreneur was going through and he had a pretty good grasp of the latest technology.
This type of investor has just recently changed teams. He/she has just had a nice exit and is looking to put some of that money into the latest upcoming deals. Here in Utah, there are quite a few of those investors because of recent exits in the state.
Let me make a quick clarification: by saying that the recent-entrepreneur-investor is appealing, I am not saying that the never-been-entrepreneur is a bad investor. It just seems that they look at deals differently –the former will look at deals for their potential, while the latter seems to only look for their faults.
At a recent Utah Fund of Funds event Nicole Toomey Davis gave an excellent presentation entitled “Designing you Investors”. It was very well done, serving as a good resource for anyone wondering what to look for in an potential investor (besides money). Slides and video are available at both her site (startupnotes.com) and the Utah Fund of Funds site.