Structuring is the topic this week in Winning Angels. Personally, I need structure, but would this be a complete deal breaker for me if it isn’t exactly laid out, no? Will an angel investor go into a deal that seems to be lacking in structure? Maybe, maybe not. I feel like this is where the relationship and belief in one another comes into play. Amis and Stephenson state that “the what and who of your investment are far more important than the terms.” I will say that Carl Guerreri and other angles stated that they like to build reporting into the deal, and I agree with this. Not only are they able to see what is taking place, but also keeps the entrepreneur accountable. I think that at some point, the investor and the entrepreneur can come together and make a plan allowing structure throughout the project. I personally work better with structure and timelines, so maybe that is why I like this idea.
We have also seen over and over in this book, they state keep it simple. Lucius Cary, an angel investor, states in Winning Angels, that “it should be possible to get the entire agreement on one page”. George Kline, also an angel investor agrees and says, “I prefer a simple structure”. This will be best not only for when the startup occurs, but over the future of the investment. As I have stated in another review of this book, there is so much more that goes into angel investing and just investing than I ever realized.
Winning Angels: the Seven Fundamentals of Early-Stage Investing. Financial Times Prentice Hall, 2001.