On a previous blog entry ‘Who Funds Who’ I mentioned the Angel Investor. What does (a good) one look like? In my experience as follows:
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High net worth individual ($10m plus AUD)
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Experienced in starting a firm. Not just running a company
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They are not an employee
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Fingers not in too many pies
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Well connected
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Can give you at least an hour a week
Most of all, they must want to mentor. You will sense if they have this capacity in your first meeting. Some clues include sharing information which seems confidential, they will disclose personal financials, stories of failures and provide deep insightful advice, for no self benefit. They may also say something like… “I want to put something pack into the world. I have made my money, you remind me a lot of myself at your age.” They should be altruistic because the reality is you have a good chance of losing their money and they know it.
When people have had financial success they understand depth beyond money. It is this knowledge that assists in its accumulation.
One potential VC partner is the person described above. We hope he chooses to take us on. For a start up, getting the cash is the second most important thing.