Posts Tagged ‘Angel Investors’
Four Horsemen of the Investor Apocalypse
Contempt That Destroys Investor–Entrepreneur Relationships Contempt is one of the Four Horseman of the Apocalypse. Once it shows up, it is the end of a relationship. Contempt doesn’t look like shouting. It is mostly passive aggressive. It masquerades as “patience” that overlays growing frustration. In a previous post, we talked about how an entrepreneur can…
Read MoreContempt from Crowdfunded Equity
Entrepreneurs are stuck between two polar opposites. On one hand, they are encouraged – endlessly – to hype, hype, hype. The accelerators and incubators want to see astronomical projections, Total Addressable Markets in the trillions, and hockey stick growth. Entrepreneurs need to attract attention, and the more they hype and over promise, the more attention…
Read MoreWhen Your Capital Strategy Kills Your Commercial Value
How “licensing-only” businesses can get caught in the angel/venture minefield. Let’s walk through the math that every angel investor does. This company is raising money at a 15 million dollar post-money valuation. For us as early-stage investors to justify that investment, we expect a 10x return. That means this company needs to exit at 150…
Read MoreWhat Angel Investors Want to Hear vs What is Best for the Startup?
We looked at a company who had been more or less steady-state for several years but wanted an infusion of cash. They were operating in two smaller markets without fully capturing either of the two smaller, midwest cities, but were coming to investors asking for additional funds. The business was a local service company, where…
Read MoreBad Behavior By Angel Groups -“Due Diligence”
Due diligence is supposed to help investors and the entrepreneurs, but many times it is a charade. I am a member of several angel investor groups, and I am intimately familiar with many more. In general, angel investor groups can be a positive force for good: they teach entrepreneurs and angels how the investing system…
Read MoreGullible Angel Investors and Provisional Patent Applications
Last time, we discussed the provisional patent application hoax perpetuated by patent attorneys. In this post, we look at the scam from the inventor/entrepreneur side. Many so-called inventors/entrepreneurs like to file their own provisional patent applications, then shop these to gullible angel investors, hoping that the angel investors will bite. The “inventor” is hoping that…
Read MoreHow accelerators and angel groups lose their way.
Riding on the back of the entrepreneur. Ever drive by a construction site and see dozens of “supervisors” standing around, while one guy with a shovel is actually working? This is the perfect metaphor for the angel investment community, with the energetic, hard-working entrepreneur is deep down in the hole furiously shoveling, and everyone else…
Read MoreThe Endless Science Project
Serving two masters, and the enablement of investors. Some startups are the Endless Science Project. They start from a “cool” technological idea and work on endless science projects. They run one science project for a while, get tired of it, and move on to another one. Investors enable this to happen, and we, as investors,…
Read MoreCalling yourself an “Expert”
I avoid anyone who calls themselves an “expert” in anything. I would much rather have men ask why I have no statue, than why I have one. – Cato the Elder, from Plutarch’s Lives I run into countless entrepreneurs and inventors, and many of them like to brand themselves as “expert” or, worse yet, “visionary.”…
Read MoreWaiting Room Inventors
“Moonshots” and Abdicating Responsibility as an Angel Investor. A friend who is an angel investor asked my opinion on a company. I did not like it for a number of reasons, not the least of which was their poor IP strategy. The real reason why I didn’t like the company was because the inventor was…
Read More