In the first paragraph they talk about how the angel investor has may have a combination of roles. The role taken on depends on what the need is at the time. The entrepreneur may need the business to take off ASAP or it could be months down the road. This will determine what type of support the investor will and needs to give. I am going to discuss five fundamental roles in supporting investors.
First we have silent investors. These investors do exactly what the title says. They sit there and do nothing except sign some documents when needed and hope for a return on what they have invested. If the investor has time to jump in and help with possible coaching, they will.
Reserve force investors are ready willing, and capable to help the entrepreneur (Amis & Stevenson, 2001). They also are able to help with training on raising capital and give strategic advice. This sounds like someone you would want in your back pocket, having someone that can come through with information you are unable to get yourself.
Team member role can be a sticky one. Having an investor become a team member could be tough for the entrepreneur if the investor becomes a micromanager. Having the investor become a team member could also be a very good opportunity for the entrepreneur since they will bring skills to the company that will help the company. The investor wants the best so they have a good return. This is where making sure you choose someone you can work with before you go into business together is important. Everyone needs to be on the same page so everyone succeeds. This relationship could be good or it could be bad, work together for the best of everyone.
When the investor become the coach, they become very involved. Do not get this confused with a controlling investor. The coach is meant to do just that, help the entrepreneur through the process and teach what you know. They provide support, advice, and any assistance needed during this venture.
Finally we have the controlling investor. They do just what their name says, they come in and take over the company. Obviously this will cause issues with the investor and entrepreneur. You have someone who has come up with this business and worked hard only to have an investor come in with enough capital to take it over.
These different roles are a lot to thing about with looking into what type of investor you would want to be. I can say I would never be able to take over someone’s business like a controlling investor. I see myself more as a coach as I am one to reach out to people and help in any way I can. I am also not someone who can sit back silently if I feel something is going the opposite way it should. I would also hope as an entrepreneur I would be able to make the right decision on who I wanted investing in my company.
Winning Angels: the Seven Fundamentals of Early-Stage Investing. Financial Times Prentice Hall, 2001.