Basic Angel Investing
The last LBAN session was the occasion to share different learnings and experiences on the basics of angel investing.
During this “online” meeting, angels and others participating were able to grasp a deeper insight into how to invest as a business angel and what to expect from being part of this community. LBAN members exchanged their points of view in various subjects and shared their own experiences with the projects and startups they are being part of.
The first couple of topics covered were the typical profile and motivations of a business angel. With many being corporate managers and/or entrepreneurs the knowledge they can bring to the community is very unique and helpful. Business angels must not only be willing to share their strong networks but also be risk savvy and not mind being put in positions to make tough decisions. With this most business angels should always be on top of their game knowing the latest market trends and staying active in adding as much value as they can to the next generation of companies and even diversifying their own investment portfolios.
From all this, the next important topic talked about was knowing when BAs actually should come into play and can make a significant difference.
1. 3F ( Family, Friends and Fools) have exhausted their own means
2. Banks won’t lend you money
3. Rounds begin to be too small to interest VCs
4. Entrepreneurs are interested not only in financial means but in network & knowledge
When looking for potential startups there are various places you can try, such as local incubators, startup competitions, certain business angel networks and even platforms with tools such as GUST, Seeders or AngelList. Also when investing in any startup make sure to always take into consideration the ticket sizes. Try to stay in the range between 10K and 35K as it’s important not to make your first investment too heavy as most startups will die – use this as the weeding principle. Make sure your timeframe is also on point and the investment is worthwhile compared to if you would invest the same money in stock investing and the transparency of the startup is clear with a realistic exit plan.
At the end of the day, as a successful businessperson, you want to give back to your community and help the next generation of entrepreneurs grow and prosper. Choosing the right startup to back can require great experience and a critical eye. The things that you knew about your business, you need to assume about the startups, especially if they don't divulge all the details behind their idea.
Thank you to all the participants: Sonia, Arnold, Damien, Diane, Elias, Eric, Alexander Stephan & Larissa for moderating the discussion. Mika