I am now at the Collision Conference (https://collisionconf.com) researching for my next book (working title: “What is Successful Startup Leadership”) and my last two interviews with investors blew my mind and opened my heart when I least expected it. I must qualify that when one of your interviewees is Granger Whitelaw who works with Peter Diamandis on the X Prize, one shouldn’t be surprised that what I call heart economies i.e. the business of making the world a better place, not just hard financial numbers, come into play.
The term Angel Investor refers to someone who invests in startups and entrepreneurs at an early stage, and often invests for reasons that go beyond/above pure financial gains. “Family, Friends and Fools” as the phrase goes – are the first you might reach out to given your basic reach as a startup. They provide seed money for some growth so you can show it to the ‘real’ investors. In many ways they are already Angel Investors but may only be your personal guardian angel looking out for your good or preventing your early startup demise. They may or may not take an active role because they do not have the expertise you need go from startup to IPO.
I was expecting to see some form of distinctions between Angel Investors and Venture Capitalists. However, now I see I may have made that distinction up in my head. Many Investors are very much engaged and angel like in their approach. It is more than throwing the money and walking away and hoping for the best which was what I had assumed. Both Whitelaw and Billy Goldberg (the second investor I interviewed) tend to go in deep with their investments to get their hands dirty, and figuratively help lift their startups to the heavens with not only their financial assistances, but also their personal networks and expertise. One could view them as representing the choir of angels that a startup leadership team wants to be in the presence of as it means the startup has arrived at investment heaven.
In the next post, I will break down what they and the other investors look for in a leadership team for the start-up they would consider. However, this post is about the core virtues that could help a startup get the attention and help of such Investment Angels.
Core Virtues of the Startup
Both Whitelaw and Goldberg said they expect each and every startup team to learn from failure and be poised after a failure. These failures do not have to be from the startup experience itself, but could also be from their personal lives. Whitelaw specifically mentioned how he learnt more about business from his “non-successful” experiences than his successes, he had been a serial entrepreneur himself, and emphasized with the difficulties in growing a business, and thus developed a passion for helping others through their challenges. Being an entrepreneur himself made him that much more of an effective investor.His greatest lesson is patience, how even though he as a startup in his early years looking for money was persistent on asking for funding, he had to learn to wait and realize that the investors may not say yes and that is simply how it is. It never stopped him from asking. In fact he reminds startup leaders that always asking for help should be the norm rather than the exception. “Fear is something that keeps companies from growing,” Granger.
It seems like angels from heaven, angel-like investors can only swoop in to save when they hear an actual cry and know they are the right ones to help save the startup. Goldberg spoke about how he always looks for poise. How a startup leader and team picks themselves up after a failure. This matters more than the failure itself. These failures are not always about the startup itself, rather they can be personal and lessons before being a startup. His other key characteristic was how the leaders manage success. He spotted how leaders can end up playing too small a game, after initial success. Or self-sabotage their own success. They would play too small a game or stop playing even when there was more on the table to be had. It almost would seem that these startup leaders refuse the help to reach heaven because they cannot accept heaven exists.
While many of the startup leaders spoke to me of their elusive search for their Angels and make money and support sound scarce at times, I wonder if they would be comforted in knowing that just as there are unicorns in the startup world, today I met the choir of angels ready for you to enter investment heaven.