This excerpt is serialized from a whitepaper titled Angel Investing for Single Family Offices by The Family Office Association. Those looking for tales of my latest death defying adventure may find it extremely boring. Entrepreneurs looking for angel, or vice versa, may find it shockingly illuminating. I’m cool either way. For a complete copy, visit the FOA website.
The most popular question I am asked as an angel is what forces in the universe do you look for when you invest? That answer has been steady for years now, a side benefit of being specifically vague.
I call it the Golden triangle of start ups: 1) ideas that solve big problems, 2) killer teams, 3) access to resources. And there is an important inflection point as well: financial-able entrepreneurs who’ve just begun to look for capital, and market -changing ideas that have just begun to gel. Catching entrepreneurs at that moment in time, and bringing in a small group that can add value through operational and leadership experience, can secure reasonable valuations and governance, adequate influence and information rights, and enough quality looks to generate a diversified angel portfolio for SFOs.
Seems like a pretty simple formula. But matching them all up, and matching the market timing and execution on product is easier said than done. The best answer: have more than one hanging around at a time. Walk and chew gum at the same time is my favorite phrase.
For a complete copy of the entire white paper, visit the FOA website.