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.


  1. Katherine,
    Some of the topics in this book seem like they could be volatile subjects and the structure portion of the deal seems to be one of those issues. Without any structure going into an agreement, it will be hard to track progress over time. However, too much structure is just as bad and can strangle the entrepreneur and their creativity. Regarding the structure aspect of a deal, it seems that the best route may be to judge each deal and entrepreneur differently—just my personal opinions.

    Joe Rudy


    1. Joe,
      I completely agree with you. Sometimes asking for too much structure can take away from ones excitement, creativity, and their drive they had to do what they were set out to do. That is a valid point. I think this is where really sitting down together and listening to expectations from both parties is important. Not every deal is the right one, find someone that you can work well with. I do feel you can not track progress if there is not some type of structure. The entrepreneur needs to decide before saying yes what they are willing to work with.


  2. Hi Katherine,
    I couldn’t agree more. I appreciate and need structure in my everyday and professional life. The idea of entering into agreements where thousands of dollars changes hands without good structure seems like a bad idea. I think the idea of building reporting into terms is also critically important. Even in the nonprofit world donors are expected to be kept in the loop about how their funds are being used. I think keeping the whole process transparent will only benefit investors and the entrepreneur in the long run.
    Brian G.


  3. Hi Katherine,

    I totally agree with you. Structure is what makes me thrive as a person, but I balance my more enterprising nature at times by allowing some things to be intentionally open-ended. That being said, I think it is really a good practice to have a solid “one-pager,” but also have a more thorough plan in the background at hand. That way, if the investor needs more information, research, etc., from you, you have all of the information easily accessible. It definitely has been an eye-opening reading this semester and has made me rethink quite a bit of my framework as well. Great post! I always enjoy reading your insight.


  4. Hey Katherine,

    I agree that there would be quarterly reporting built into the structure for a more significant investment to hold the entrepreneur accountable. If I were personally the entrepreneur, I would like this as well because it would keep me responsible for performance/revenue and drive me to be successful. I am already used to that type of accountability being in a sales career.

    On some investments, I could see how the common approach could be appealing due to not putting a lot of time or resources into the investment. Still, in my opinion, it is undoubtedly more of a roll of the dice when taking that approach.


    Stokes Warren


  5. Katherine:

    I agree with the authors that preferred stock or participating preferred stock are the best options when structuring a deal. It is essential to ensure you’re first in line if a company has to liquidate. Common stock, while simple, may not work out the best for the investor if things go awry in the business. You’re right that both entrepreneur and investor must take time to research and get this part right. It could ruin the relationship between the two for sure.



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