Passing the Beacon: Learnings & Advice from Seasoned Angels
By Ninie Verma, Content Associate, 1stCheque by Favcy
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We scoured the internet for angel investing lessons people learned the hard way. Here's what fellow angels on the internet have to say about angel investing insights they swear by -
1. Good potential deal flow > choosing deals/capital etc.
There are three parts to angel investing: capital, access, and picking. Based on my experience, access is by far the most important part. If you have access, you can raise capital, and generally the most popular deals (i.e. the ones already discovered) also end up doing well. So picking becomes secondary.
“As an angel investor, it’s more important to be swimming in a pool of good potential investments than to be an exceptionally good picker. Obviously if you’re able to be both, it’s better :) but if you had to choose between being in a position to see great deals and then picking randomly, or coming across average deals and picking expertly, choose the former.”
2. Playbook most angels swear by when assessing a company:
- There needs to be a strong “founder-market fit.”
- Does the entrepreneur(s) have the passion and obsession with solving a problem (preferably a pain they have experienced themselves)? And do they care about their customers?
- Do they have a compelling founding story, and what is their purpose in what they’re doing?
- Do they have the hunger, and do they have something to prove? And will they work relentlessly to beat the rest of the competition?
- Are they looking to become a category creator, or do they want to become a category leader in their industry/niche? And what are the technical insights they have that nobody else has?
- Is their solution scalable (is the market big enough and growing?), and are they on the verge of reaching product-market fit?
3. Investing on your own is good. Investing through a network is better.
If you wish to sail alone, it’s a good thing, but, the most experienced angels collectively agree through personal experience that they have been at a greater advantage of investing through an organized network.
It brings in more opportunities, better ideas, broader and distinct perspectives, and most importantly greater due diligence and checkpoints to validate the potential of the startups.
Do you want more dependable advice coming straight from angels with years of experience?
You need to attend Angel Speaks where we get into candid fireside chats with seasoned angels to learn about their investment journeys and decode tricks of the trade!