Not a “One-Trick Pony” Angel Investor

Most people would define “investing” as the act of putting money into something with the expectation of getting more money out. But really, investing is about input and ROI. It doesn’t have to be only about cash. As an angel investor, you might have more to contribute to a business than just a check with a dollar sign on it.

If you want to be more than a one-trick pony – that is, if you want to bring more than just cash to the startup – you might be needed in some of the following areas to assist the business:

THE OUTSIDER: An angel investor brings an outsider’s viewpoint to the business. Many startups are run by passionate people who have a lot of skin in the game. Your point of view – as someone who arrives on the scene a little later – can bring sanity and perspective. Of course you’ll be “bought in” when you invest in the organization, but be sure to keep one foot outside of the business – on firm ground – to make sure that your outsider’s perspective adds value.

THE GUIDE: Taking a journey through the unknown is full of false starts and missteps. Having someone there who has made that journey in the past (perhaps more than once) can help to bring a startup to profitability sooner, and more efficiently, than without your help. You already know that you don’t simply drop off a check and consider your job done; active research and networking with this step in mind will increase your ROI.

BINOCULARS: Entrepreneurs can become so focused on their project that they can sell themselves on its value. Ever had a startup tell you that their product “sells itself”? They need your skill to point out that no product truly sells itself, but rather that marketing and sales will play a part. In a sense, you’ll help them to look up from the small picture of their microscope and look through binoculars at the panoramic view. At every conversation, get the subject matter away from the product’s features and put their focus on the full business.

THE ORGANIZER: One of the first hires of any rapidly growing business is an organizer – someone who can see the chaotic pieces and assemble them into an efficient whole. COO’s or CFO’s often play this role when they’re brought on board. However, introducing some organization earlier into the process will mesh nicely with your role as the angel investor. Granted, an organizational chart (and other organizing tools) might best be written in pencil, but you can bring value to the startup by corralling the team and bringing order.

THE OPPORTUNIST: When a product developer starts a business, their focus is on their product, and often on its tried-and-true uses. You bring greater value to the team by broadening their horizons beyond that initial purpose to show them that there are other opportunities or markets for their product.

A word of caution is important here: Make sure you can back up your contribution with expertise. If you’re an angel with money, just be the money and avoid foisting your grand (but inexperienced) ideas on the company. But, if you’re an angel with cash AND with decades of business wisdom then you’ll be a welcome addition to the team.

As an angel investor, you probably will bring money to the table. But you have a bigger role to play and you’ll make the startup more successful, faster, when you bring your entire toolbox of value to the agreement. This is a great way for you to actively contribute to the growth of your financial investment with a little “elbow grease”.