Big News: FounderDating is joining OneVest to build the largest community for entrepreneurs. Details here
Latest Notifications
You have no recent recommendations.
Name
Title
 
MiniBio
FOLLOW
Title
 Followers
FOLLOW TOPIC

Question goes here

1,300 Followers

  • Name
    Entrepreneur
  • Name
    Entrepreneur
  • Name
    Entrepreneur
  • Name
    Entrepreneur
  • Name
    Entrepreneur
  • Name
    Entrepreneur
  • Name
    Entrepreneur
  • Name
    Entrepreneur

Setting expectations with angels so no one wastes their time?

I'm acting as an advisor/lawyer to some first-time entrepreneurs, and this is my first time working with a startup as well. They're a third of the way through their target raise and have made great progress in a short amount of time, so angels are willingly taking meetings with them, but they're having trouble figuring out how to say 'are you serious about investing? yes or no.' These angels, especially the older ones, take meeting after meeting and gladly provide 'advice' that isn't practical and introductions that may or may not be useful. Are these angels just sticking around so they can top off the round? How can my advisees be more direct without alienating the folks they're continuing to meet with? And how can they set expectations at first meetings so the process doesn't drag out?

19 Replies

Jonathon OBryan
3
1
Jonathon OBryan Entrepreneur
Founder of The SmartSheet
To begin with, I absolutely agree! Most Angels never invest just waist your time and energy, I would go with a site that they clearly show who's doing what, and where... invstr.com I am not affiliated with this company as of yet, meaning I don't require there services right now, however, they let you browse for free, and get real information on the investors... I didn't misspell their .com address it is how it is... hope this helps you, I found 3 serious investors on here, Founder Dating... It's got it's advantages, too! Jonathon -
Terrence Masson
0
0
Terrence Masson Entrepreneur
Founder & CEO at 'Building Conversation'
Couldn't agree more. After months and months (and months) of taking meetings with people who clearly had no intention of actually investing, I'm actually relieved now when the rare people is up front and says "Not our thing because .. XYZ". Looking for good advice from others to pass on. All I can say is have a phone call first and wrap with "So what's your opinion?", rather then having an hour long in person meeting with each person for a first meeting.
Bruce Carpenter
7
0
Bruce Carpenter Advisor
Co-founder and Principal, Harbour Bridge Ventures
Just as qualified and experienced angel investors will undertake due diligence on prospective investment candidates, your client should do due diligence on prospective angel investors. How many times have they previously invested in startups? What is a typical investment amount they will consider? What has their experience been in their prior investments? Do they bring any potential synergy or experience as well as financial support to the opportunity? Do they have experience in this vertical or industry sector? Do they have any contacts in their network that can be helpful? Should they make an investment are their expectations in terms of their level of participation in the opportunity and eventual returns realistic and consistent with what is expected?

Qualified and experienced angel investors will be able to answer these kind of questions and appreciate informed entrepreneurs. If the prospective investor has difficulty answering these questions, they may not be properly qualified as potential investors.

I find many entrepreneurs have difficulty distinguishing between participants in a friends and family early stage round and a true angel round.
Irwin Stein
2
0
Irwin Stein Advisor
Very experienced (40 years) corporate,securities and real estate attorney.
Someone should write a book called "Dancing with Angels". Most start-ups need their money more than the Angels need the start-ups. Your advisees can be more direct by being very confident in what they need and want. That is your job. I have been on both sides of the table, representing companies and VC funds. The best presentation is "we need X dollars to accomplish Y". They also need to be aware of their weaknesses. I tell founders pitching to a group of professional investors that the pitch is like defending your dissertation. You need to know your company, your product and your market inside/out. If they ask a question that you don't have a good answer to, they will not fund. Don't second guess investors, its their question and its their money that you want. I also advise a company serious about funding to pitch several groups each week until funded. Its a numbers game. Not what other people have told you? I am not surprised. It takes hard word and some money to get funded ( I flew with 2 founders to NY, Chicago, Atlanta and Austin on 3 separate trips and pitched multiple investors each trip.) It takes time and money to raise money.
Peter Weiss
2
1
Peter Weiss Entrepreneur
President at American Outlook, Inc.
I hope you don't plan to approach customers like this.

Except for our mothers who carried us for nine months while we kicked her and made it impossible to lie down, sit, stand or sleep comfortably and our fathers who, knowing what we were going to cost, didn't strangle us in our cradles, it is unlikely we will ever find anyone who will be more generous to us than our angel investors. Think about it: they are putting money into an inherently risky proposition in a class where no one believes more than a third of the deals will return capital; the investment is illiquid; there is little or no reporting or accountability; the investment is likely to go on for a very long time and and the investors will have little or no influence. The angel is hoping we are capable, honest, smart and lucky and that neither internal or external factors overwhelm our dreams.

It's our job to identify and reach out to angels who are more likely to invest in our companies, just like it's a salesperson's job to identify customers who are more likely to buy our product or service. When we do find them, remember angels have no need to invest in any start-up (unlike a customer who may need a comparable service). Angels have dozens or hundreds of alternative start-up investments available and certainly hundreds of non-start-ups. If we are pitching people without a reason to believe there could be success shame on us.

VCs look at hundreds of deals for each investment and go into serious due diligence on at least a dozen companies for each one they back. Some probably go into DD on three to five times that many.

Raising money is hard. It takes time and energy. We need persistence and patience. The angel who does not invest today may come back next month or later in your round. That same angel may introduce us to an investor two months down the line. They may come into our next round. They may want to invest but are cash or time constrained and if things change they may come back.

We need investors far more than they need us. We forget that at our peril.
Russell Schneider
0
0
Russell Schneider Entrepreneur • Advisor
Entrepreneur, Value Creator, Global Explorer - New Project in the Works
If by progress, you mean the business has revenue and a working model and you can clearly show that additional money invested will have a direct easy to understand ROI, and finally can show that the market is sizable enough, receiving investment dollars is easier. If by progress you mean that they are meeting development milestones or their patent is pending, but there is not yet revenue momentum with a clear path to profitable growth, then more meetings and time spinning are part of the deal. Hope this helps!
Peter Jordan
0
0
Peter Jordan Entrepreneur
Revenue hacker for startups - journey to the $1 of revenue
Greg, like any business call the angels need to be qualified. Do not schedule a meeting with out getting answers you need for your qualification. As for asking for the investment (order) just advise to ask. If the answer is no, ask why. If the answer is yes, let's work out a deal memo now for our lawyers. Sounds simple but sometimes hard to execute.
Steve Everhard
0
0
Steve Everhard Advisor
All Things Startup
There are signs of intent. If a founder is looking to top off they'll be most interested in whole is already in and to what extent; if a founder focuses mostly on the numbers they are tyre kicking; if they spend more time exploring market(s) potential then that is a clear buying signal. Explore how they normally structure investment and you are most of the way there.

If you ask for an opinion you will get one so before asking consider well if you actually want it. If you get to the end and have to ask the finder what they think then you aren't on the same journey. The more interactive the meeting then the more common ground you have, unless the same objections keep surfacing.

The best close is to ask for a follow on. Serious investors won't spend weeks of time considering investment, they'll move quickly to resolve any outstanding concerns and then you'll have an MOU or LOA. Anyone who's is enthusiastic but delays decision making either has no available funds, is shopping you around, or is testing the market themselves.


LanVy Nguyen
2
0
LanVy Nguyen Advisor
Founder & Managing Director at Fashion4Freedom
A very savvy investor once said to me: "If you want money, ask for advice. If you ask for money, you'll ONLY get advice"
Elizabeth Pang Fullerton
2
0
Investor, Exec. Producer, Philanthropreneur
I can not speak about most angels but being one myself, I can only say this: Focus on Angels who invests in your space, this is #1 Will they fund a seed round? Are in later stage? Very late stage? What is their requirement? Ask them what is their typical investment size? Ask them how they can contribute, time, expertise, introductions etc... If these filter questions are helpful, you like what you are hearing; then proceed. I usually hear a two minute pitch, have them send me the deck. I also ask them to follow up in a week or so.... Hope this helps. Too hard to type on vacation on an iPhone. This message (including attachments) may contain information that is privileged, confidential or protected from disclosure. If you are not the intended recipient, you are hereby notified that dissemination, disclosure, copying, distribution or use of this message or any information contained in it is strictly prohibited. If you have received this message in error, please immediately notify the sender by reply e-mail and delete this message from your computer.
Join FounderDating to participate in the discussion
Nothing gets posted to LinkedIn and your information will not be shared.

Just a few more details please.

DO: Start a discussion, share a resource, or ask a question related to entrepreneurship.
DON'T: Post about prohibited topics such as recruiting, cofounder wanted, check out my product
or feedback on the FD site (you can send this to us directly info@founderdating.com).
See the Community Code of Conduct for more details.

Title

Give your question or discussion topic a great title, make it catchy and succinct.

Details

Make sure what you're about to say is specific and relevant - you'll get better responses.

Topics

Tag your discussion so you get more relevant responses.

Question goes here

1,300 Followers

  • Name
    Details
  • Name
    Details
  • Name
    Details
  • Name
    Details
  • Name
    Details
  • Name
    Details
  • Name
    Details
  • Name
    Details
Know someone who should answer this question? Enter their email below
Stay current and follow these discussion topics?