This section is about evaluating the potential deal between investor and entrepreneur. Like Winning Angels highlights, an investor has to be confident in the entrepreneurs they are going into business with. The people include, not only the entrepreneur, but also the team members, other investors, advisors and stakeholders. Also they mention “when assessing an entrepreneur, there are three “base” to cover: their goals, their knowledge, and their capabilities.” Assessing is important. What are these investors getting into, is it worth the risk, how is their character, are they honest? So not only is the investor looking at the business plan, but they are looking at you as a person.
Another aspect that is important is timing. When is the right time for this venture, do we have customers ready for this product or service now, what is the competition and how well are they doing it. It isn’t always about being first, but it needs to be done right and right time. Whole there are some investors out there that want to only work with first movers as they say in the book, many others are more concerned with and focus on quality business models and teams. This is the type investor I would want for my business, someone that sees the long term goals and knows that the team is important.
Another discussion point was on page 120-122, what do investors do and what do winners do? Love this section. I want to focus on the winners portions. Reading through it, it is all about the plan of your business, your team, exit plan, and working with other investors. This to me is what I would look for in an investor. Someone who is not only interested in the business, but what makes the business happen (team), and the future even as far as exit plan.
So much to learn about investing and what goes into it. Not only as an entrepreneur are you looking for the right investor, but the investors are also looking for the right investment. As it said in the sourcing portion of the book, the partnership has to make since on both sides. Everyone has something to bring to the table, it is just about finding the right table for both sides.
Winning Angels: The Seven Fundamentals of Early-Stage Investing. Financial Times Prentice Hall, 2001.