Angels Bet on Startup Teams


business team 150x150 Angels Bet on Startup Teams“Looking for investor for new tech start-up – US$25,000.” This is a real headline pulled from a local advertisement on the web, and it identifies one entrepreneur’s search for an angel investor who can help turn her dream into reality. The balance of the ad describes the business in more detail: everything is ready to go, including location, name (brand), and intellectual property. The office will have a “neat theme” to create a unique experience for customers who want to drop by. Gosh, what more do you need to know?

Who’s Running This Show?

In a word, everything. This article in no way suggests that the above-referenced start-up is not a worthy investment opportunity. The thing is, you have no way of knowing at this point. The founder does invite interested angels to get in touch for more information. So pretend that you have done just that; what is the first thing you say to her? How about, “Let’s hear your pitch.” Then drill down to learn about her management team and their ability to launch successfully.

The management team is one of the most, if not the most, important components of any business: they’re the folks who should have the experience and know-how to keep the enterprise afloat. Who are the team members? What is each individual’s industry background?

101 Questions

When you‘ve dug into each executive’s background, you should be convinced that this group of individuals will be able to work together to make the business a success. Learn about them with these questions in mind:

  • Does at least one person among the leadership group have demonstrated experience in the industry? Are they qualified?
  • Does the team include the right mix of knowledge and skills to manage the company successfully? Are they capable?
  • Do team members share a vision for the future of the business? Are they playing from the same page?

These entrepreneurial wizards are asking you to invest in their business; you are entitled to ask questions of them to reassure yourself that they know what they’re doing. Talk with members of the management team; ask them all of your hard questions and get more details about them and the business.

Always remember, this is your money we’re talking about, and you want to invest it wisely. Take a close look at these people. Confirm their competence and integrity. If they can’t give you acceptable answers, or if they choose not to reply, think twice about letting them use your angel wings.

* For series, references are published in the last installment of the series.

 

  • tongyun

    As important as it is that the team members be on the same page, it's just as important to have people who are willing to challenge ideas even if everyone else thinks an idea may be great. If the company is heading off the cliff and everyone is just following the leader it doesn't do anyone any good. You need that one person who has the courage to tell everyone else, “We're heading in the wrong direction” and then prove it.

  • cirereyes

    I totally agree with this, it’s always a good practice to know all the members in a team before you finally decide to join them. Being skeptical at first is not bad because that would push you to ask the necessary questions that can help you come up with the decision to invest or not.

  • Kejatz

    I think this is a must when thinking of investing money like this. I myself would never invest, not even a dollar, if I'm not sure about all the details of the plan that I'm going into and the people who are working on it. So, yes, this is a wise strategy.

  • http://vladadrugstore.blogspot.com/ vlada

    I think that the most safe behaviour while dealing with investments or even buying the simply things in the supermarket is not to hurry. Pick as much information about your future partner as possible or speaking in other words: you should do your home work properly.

  • http://venturehype.com/ The Hyper Team @ Venture Hype

    It’s true. We don’t need another “yes man” in the business community. Elite entrepreneurs – the ones angels are hunting for – are self-assured and will never be “yes men”.

  • http://venturehype.com/ The Hyper Team @ Venture Hype

    cirereyes and Kejatz – For seed-stage investing, you’re really investing in the people. Their capability to make things happen is what drives them from zero to hero.

  • http://venturehype.com/ The Hyper Team @ Venture Hype

    Agree, it’s important to do due diligence. However, be reminded that angel investors should make quick decisions and not waste entrepreneur’s time. Investors should be upfront if they’re not interested in the startup. Time is of essence for entrepreneurs. Let the founder know the decision so they can go on and seek for investors who’re interested. Be sympathetic. Investors, if you want good deals come your way, having a good reputation in this field is a must.

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  • andrew25

    It is highly important in choosing which type of Angel investors are suitable for a specific amount of business. Groups which have discontent among them always performs well below their effectiveness. Further it is also important that each Angle investor possess one or more management qualities which would eventually help the team at tough times.

  • andrew25

    Time and decision making are important parameters for judging a successful Angle investor from an unsuccessful one. It would also depends on how much interests and dedication all the Angel members have on achieving overall success in their field and it is important to have Angel members in the team alike.

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    [...] like VCs, we struggle with the best way to screen a deal. We all know that it’s the quality of the team that matters most. But long before we get a feel for the team, we evaluate a company based on how well they can pitch [...]

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    [...] the strengths of the entrepreneur and his or her team [...]

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    [...] Judge the cohesion of the team and look at all other people involved, including other investors or [...]

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    [...] course, hard data is only a small part of what we look at. The management team, product phase (alpha, beta, etc.), market size, revenue stream model are all just as [...]

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    [...] MZ: Opportunities come to me through the angel group, through my blog, and other personal contacts. Like most investors, I look for a solid business plan, and give high priority to the qualification of the startup executives. [...]

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