I am currently preparing a talk for the Atlanta Technology Angels. I’ll deliver it on April 16th at 5:30 p.m. at the Atlanta Tech Village. The title I’ve been assigned is “Paparelli’s Seven Criteria for an Angel Investment.”
My audience will mostly be my fellow Atlanta angel investors. Whenever I give a talk, I like to think long and hard about the audience. Here’s what I’ve been thinking.
Who are angel investors?
The angels I know look and sound a lot like me. We are experienced business people who want to invest in the community. We made good money doing whatever we did in our former lives. In fact, we made enough that we have a little extra. Now we want to help other promising business people and make money doing it.
We are business people. We have mostly functional expertise. We are CEOs, COOs, VPs of Sales, CFOs, VPs of Development, and founder entrepreneurs. Some of us are CPAs, lawyers and real estate professionals. We come from many different industries and many different walks of life. We have a lot to offer in addition to the money.
As smart and successful people, we assume we will continue to be successful because we are smart. This assumption is the beginning of losing all our angel investment money. What we forget is what made us successful. Being smart was a big part of it, but there are a lot of unsuccessful smart people. What made it work was being part of a great team in a market that was buying. That’s how we made money the first time.
Do we have the experience?
Few of us have been part of a new product launch in a company with little to no resources. Most of us come from corporations that had lots of money and lots of customers. We launched new products to existing customers and counted ourselves brilliant when it worked out. The startups we are assessing are launching new product ideas to prospects who have never heard of their company or their idea. Further more, the prospects couldn’t care less.
This is the challenge for angel investors
In our hearts, we know we are unqualified to pick winners and losers. But that’s not how we act. We are confident and experienced business people. We know. We’ve been there. We’ve been in the market fights. We’ve won some and lost some. But in the end, we won the war. And we have proof. We have the booty!
So we want a checklist, a formula, a methodology. Something to guide us. Something to increase our chances of a successful investment.
You may be thinking, “Maybe, just maybe, ‘Paparelli’s Seven Criteria for an Angel Investment’ is the answer.”
Here is what usually happens with these kinds of talks. It will all go well and sound very logical and right.
Then we’ll get to the Q&A and realize there are still more questions than answers. This is because there is no comprehensive checklist. The variable is people.
People are the unsolvable variable
People start with the entrepreneur, the leader we invest in, and then include the team they build, and those who buy the product.
But people…who knows how they’ll act and react? Not me. And I’ve been investing for 24 years.
I’ll be talking about my experience and what I have learned from it all. There are always more questions than answers when investing in startups. Together we’ll uncover at least a few of the answers.
If you are interested in attending this session, here are some things to consider. It is free to ATA members. There is a discounted rate for entrepreneurs. Nonmembers pay $35. If you want to attend, complete this form. At the end of Thursday, April 12th, I’ll pass it on to the ATA education department, and they will contact you.