One might think that a conference about angel investing in the midst of the rise of super angels, galloping seed round and IPO valuations, would have had the word “bubble” written all over it. One couldn’t have been more wrong: Jon Pierce, the mastermind behind the recently held Angel Bootcamp in Boston, had with his team put together a great day with impressive schedule, best described with words such as including, engaging and embracing. The learnings and advice shared were nothing but hardcore and in plain vanilla.
There’s a fine line between being including and excluding, so with half of the attendee list consisting of VCs and angel investors with 15% new aspiring angel investors, the rest 30% being entrepreneurs, the event becoming member’s club gathering was a probable scenario. Quite on the contrary, it felt very including, which e.g. Eric Paley of Founder Collective demonstrated by kindly inviting anyone in the audience who didn’t know what a “convertible with a cap” is to grab any investor or come by him. No high horses. Also, even if the the day was invite only, it was 100% free: Only way to build a viable community. (More on convertible debt by Fred Wilson)
No, the bubble with sky rocketing valuations wasn’t the topic of the day. Instead, the audience was met with hands on tips, brutally honest lessons learned and generous office hours by people you’d only wish you got to have coffee with. The topics covered both sides of the table, i.e. the angel investor’s as the entrepreneur’s view and advice on early stage investing.
Embracing entrepreneurship, embracing failure, embracing the ecosystem. The high correlation of investors who have understood the importance of creating and participating in an ecosystem and who have great entrepreneurs in their portfolios spoke loud and clear.
My overall impression of the invite only, but 100% FREE Angel Bootcamp day? Quoting Eric Paley about me taking a flight from Europe to make the day: “Pretty hardcore”.
Characteristics Of Great Founders – Sponge and Stone With Humility
Since investing in early stage is foremost about investing in great people, Dave Balter shared his advice on what characteristics to look for in a great founder:
Like a Sponge: the ones who early on create ecosystem of talented mentors and advisors and relentlessly consume information.
Like a Stone: the ones who are resilient and fearlessly execute on their vision.
Dave has also shared his own learnings on how his arrogance almost ruined his business, adding humility to the characteristics of a great founder and a key success factor. Brutally honest and very wise words:
“Cheerleaders will disappear, rivals will emerge, and the market will become less forgiving. Arrogant CEOs won’t see the changes coming.”
My good friend Tine Thygesen of Everplaces and Founders House has also written a great post on humility, and how that sets startup founders apart.
DIBS: Getting In On The Best Startups
So, how to find and get to invest in the great sponge and stone people? A great panel moderated by Fred Destin, partner Atlas Venture, with David Cohen, David Tisch, and Jennifer Lum, came basically down to one conclusion:
“Network The Shit Out Of It”
Network is massively important. The more events you go to, the more touch points you build, the more people get to know you as a person, the more interesting people you get introduced to, the more deals start coming your way. That’s also when other investors start wanting to be around you. Plain, simple hard work.
Advice For Angel Investors
Bijan Sabet, partner at Spark Capital, fired away his first Prezi presentation emphasizing the fact that investing in very early stage means investing in long term and being in peace with pivots. That’s also why one should only invest in things one understands and choose ones syndicates wisely.
“Just write more checks!”
“Getting shitty deals helps to build pattern recognition. The more deals you get exposed to, the better you get at pattern recognition”: Fred Destin
“A good angel can, and should, say no quickly”: David Cohen
“Too much due diligence is too much!” At early stage there are usually very little known facts, you’ll be investing in people with an idea. Ideas will change why investing in great people and a specific market plays a key role. You are most likely to co-invest with others, thereby choose your syndicates wisely. Trusted syndicates make due diligence easier. ”
Don’t restrict entrepreneurs working on multiple projects.” Again, it’s early stage, ideas will change. You should invest in a person who can execute, not in a single idea.
“One great deal pays for 100 shitty ones”: David Cohen. Remember: Basically crazy shit is going to happen to companies, be comfortable with pivots. Angel investing is an unbelievable mental exercise, but on the upside: it’s so much fun and incredibly social! You get to know lot of people through it. Write post mortem on what didn’t work.
“You will get turned off more than you will get in a deal, if it happens it happens. Don’t force deals and only invest if you think you can add value”: David Tisch
“Build reputation by being helpful, even if you’re not investing”: David Tisch
“Be visible! Keep showing up. Your network and personal brand matters on getting on the deals“: David Cohen/David Tisch
“Go and make it happen. Contact people you wish to meet and learn from”: Jennifer Lum about becoming an angel investor
Advice For Entrepreneurs
“Don’t stress the first meeting, start with a simple, short email. You can recover from mediocre email, but less likely from a mediocre first meeting”: David Tisch
“Basics matter, e.g. it’s important how responsive an entrepreneur is in her/his communication”: David Tisch on question: What deals you don’t do?
“Startups, make sure to pitch so that your angel investor’s decision committee, i.e. the spouse, understands it”: Dharmesh Shah
AngelList Leveling The Playing Field
With sugar on top, Fred Destin threw in a crash course on AngelList in the end of the day. AngelList, that just has gotten a beautiful face lift, is the natural extension of great VentureHacks by Naval Ravikant and Babak Nivi, leveling the playing field by now adding transparency even to deal flows. Competing with the drinks being served, the 10 minute masterclass went on to become 40 minutes of great discussions on how and why AngelList works, summarized by Fred as:
“It’s fast, slick product oriented company that relies on social proof.”
He should know.
AngelList scout Brendan Baker shares his tips on Quora on How to “hustle” with AngelList, answering many of the questions brought up during the session. For more on how Angellist works and metrics behind it, there’s a good interview with Naval on Forbes.
However, as both Fred, Naval and Brendan point out, despite AngelList being a powerful tool, getting on the AngelList is only the first step. You need to work it, as you need your network for intros.
Increasing The Transparency In Europe
To put it mildly, Europe is experiencing a heat wave of startup accelerators, not just the summer breeze, so to help make life easier for the first time entrepreneurs, 21 European investors under Seedsummit umbrella group have agreed on standard term sheet. StartupBootcamp accelerator has also published its contracts, in plain vanilla.
Ps. This post was written while listening to “pretty hardcore” deephouse mix on SoundCloud by Mark McLeod, early stage investor at Real Ventures in Montreal, and one of the many lovely and inspiring people I got to meet in Boston. If you’re into deephouse, you’ll love it. I’ve listened to them all. Thanks Mark and thanks Jon for a great day!
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