Wellington
The tables were turned as angel investors pitched to would-be entrepreneurs at an
Well over 150 people turned up to hear four speakers - and here's a selection of comments fromangels who are all members of Wellington's Angel HQ .
Jelle Sjoerdsma
•Was in theory to talk about the 'black art of valuations' [of a start-up] - to which he gavethe short answer "I don't know"
•Question is…..do you want to do a deal?
•Come upwith how much money you need, come up with some financial figures
•Looking for somewherebetween 20% and 40% of the business (angel's investment). Come up with something that'ssensible….a round number that's plausible for the angel and that you'll be happy with later….andtry to do a deal
John Petersen
•Asked the question (of himself) or why he is in angel investing. Interested in testing thelimits of an idea….possibilities.
•As angel investor can help close the financial gap
•It isn't about the future projections of cash, is about how fast the entrepreneur is going toburn through that capital. What costs have to be met to achieve what is needed….get hardnumbers.
•Sense of realism
•Many people when giving the 'elevator pitch or barbequepitch' start with the what, then how, then why. Reverse that. Instead start with the why (a productservice etc will work/is needed), then how, and followed by what.
Suse Reynolds
What makes an investible entrepreneur
•Driven, committed, capable + coachable andengaging
•Angel investment is like getting married….will be good times and tough times,need to manage this
•Know your market and how you're going to make lots of money
•Most angels want to see you be as flash as you can be
•Need a great team around you.Convince others that your idea is good, even in the face of skepticism
Dave Moskovitz
•Don't make any commitments you can't meet
•Be scrupulously honest in everything youdo……angels will examine your trail of relationships….any dishonesty, angels will walk away
•Be realistic about the valuation of a start-up….angels want to get a deal done….go low,err on the side of being too low
•Have an exit plan
•Like to see plans that can turninto a $100 million company…means has to play to international scale rapidly, have a big,addressable international market (which isn't just Australia!)
•Needs to be barriers toexisting competitors
•Preferable to have some 'secret sauce'
•Requires founder whois enthusiastic, persistent and totally committed to what they're doing
•Proof = earlycustomers
•Have a team in place. Shows that can work with others. Relationship is a two-waything with the angel investor
•Pluses = when other peoples' money on the table, 'space'that's heating up, not the first time that doing something like a start-up
•Is better ishave some outstanding personal characteristic. Anything excellent in life that you've achieved,something that you know a lot about.
•Focus on making money by generating value….not insome corporate structure, tax advantages
•If you have an uncomplicated capital structure, ismuch preferable
General answers to questions from the audience
•There is no such thing as a typical scenario for an angel investor
•Shorter, faster,harder in meeting milestones shows that people will be more successful
•Angel investment isonly the start of the investment story….as founders, you're probably going to get valued down.
•'Would you rather have a large part of the hind quarter of a cattle beast, or the wholeant'
•Around confidentiality. Angels' reputation is important to them too.
•Ideasare meaningless. What is important is the management team, market, capability