Dreamstake put together a hat-trick of speakers all angel investors to share their knowledge. Image courtesy of: svilen001/sxc.hu
Angel Talk: Find out what angel investors really want
Club Workspace, The Leathermarket
March 13, 2012
Reporting by Ben Goldsmith.
Angel Talk event brought an audience of start-ups and entrepreneurs to the Club Workspace
venue at The Leathermarket
on Tuesday 13th March.
Paul and Marina, the Dreamstake dream team, put together a fine hat-trick of speakers. Three Angel Investors - Charlotte Mason, Tony Kypreos and Judy Piatkus - took to the Leathermarket’s stage to share their knowledge.
Before the event began, Paul became the flag-bearer for a new Investor-Startup dynamic: “investors need to start fighting for the best start-ups, not the other way around.” This evocative declaration was met with impromptu applause from the audience, and it was in this mood that the event-proper began.
The event had a clear and defined structure. After the angels were introduced to the crowd, they each responded to questions. The questions were posed, at first, by the evening’s compare Kristina Moskalenko
. However, it was when the responsibility of angel-interrogation was turned over to the audience that the interaction peaked.
How do start-ups approach you?
The first question concerned the manner by which start-ups and entrepreneurs got in touch with business angels.
Charlotte Mason explained that angels are far more proactive than the start-up world imagines, especially in terms of how start-ups and angels get on each-other’s radar. Charlotte habitually observes the small-business climate, and therefore has a very good knowledge of the ecosystem at all times.
Judy Piatkus, whose background is in publishing, usually invests as part of a group. During the initial approach Judy will analyse the startup-in-question’s team. She is far more likely to invest if there are good people on board.
Tony Kypreos suggests that start-ups use a ‘trusted intermediary’ to approach angels. If a start-up is involved with an accelerator programme, for example, the leader of the programme is, most probably, connected to an angel.
What lets investors know that a start-up is investible?
Charlotte’s invests in start-ups who are actively willing to learn.
This point-of-view was seconded by Tony. He took this a step further by commenting on the importance of ‘emotional intelligence’. Tony believes that approachable personalities are important to investors. He would rather get involved with a thriving team than with a lonely, bedroom dweller with shoddy manners.
Judy looks for start-ups who ‘know every single detail’ about their business. She is not there to do their admin. If she asks you a question, you better know the answer!
Of course, all of the Angels agreed that ‘product’ and ‘market’ are of paramount importance. If either is missing, they don’t want to know.
What is fatal to investors?
Charlotte didn’t need any time to deliberate. Her number-one faux pas is start-ups who don’t listen. Start-ups: confidence is good, arrogance is a turn-off. Show some respect to the angel, they may end up bankrolling your business.
Tony seconded Charlotte. Tony, who is mid-startup himself, recommends that you see every piece of criticism that you receive as a gift. Even if you ‘know’ that they are ‘wrong’, they have a perception of what you offer. Their opinion may be a nugget of UX gold!
Tony also aired his dislike for 'wannapreneurs'. I don’t know if this ‘wannapreneur’ is Tony’s self-coined neologism, but I like it. Tony explained that 'wannapreneurs' haven’t got a passion for anything, except for entrepreneurship. To succeed, what you need is a business idea, not a Dragons’ Den fetish.
Judy dislikes a disorganised pitch. She gave this panacea for angel pitches: treat it like a sale. It may be the biggest sale you’ll ever have to make. You can’t sell? Learn how to sell.
Do investors follow trends or an ‘investment tendency’?
In response to this question, both Charlotte and Tony agreed that they didn’t really know, but if there is one, they’re not following it! Tony explained his opinion by saying, "if you can see that there’s a bandwagon, it’s already too late to jump on it."
Judy made the insightful point that there may appear to be trends in investment because angels regularly invest in ahead-of-the-curve tech companies. If similar kinds of tech are emerging and evolving in different places at the same rate, a ‘trend’ emerges.
How do you showcase your ability to an angel?
By declaring milestones - and then hitting them. If you can show an investor that you can repetitively hit your targets, you will see the pound signs light-up in their eyes.
Tony Kypreos gave start-ups a method by which they could communicate their target-hitting tendency. Tony’s method was this: go and see an angel when you don’t need money. Just tell them what you’re doing, and then leave. Come back in a couple of months after hitting all of your targets, tell them what you want to do next. Come back after doing that, and do the same again. By your fourth visit (if not your second, or third) they will be begging you to take their money.
Would angels co-invest with a startup’s friends and family?
Tony wouldn’t rule out anything - if a start-up is good, he wouldn’t preclude investing at the same time as the entrepreneur’s uncle, for example.
However, all of the angels agreed that asking your friends and family to invest was a pre-investment step.
Some words of wisdom from Tony about friends and family investment: remember that you’re dealing with people who (perhaps) don’t understand how shares work. You have to explain the complexities of share dilution and legacy. Investor management is a complicated process at the best of times - you don’t want it to get even messier!
The last word
So there you have it, start-up tips directly from the angel’s seat on-high. Thank you very much to Dreamstake for hosting and to Taylor Wessing
for sponsoring the drinks. All the best, and feel free to drop into any Club Workspace venue for a coffee and a chat!