One of the priceless aspects of working for Black Web Media is meeting the founders and listening to their sage wisdom and advice about the business of web-based technology. While many have been profiled on BlackWeb20.com, we’ve discovered that you, the readers, really listen when the techs like Don Charlton and Clarence Wooten talk tech. So every week the techpreneurs will be talking to you about the business of technology. Send your questions to me via email (robin at blackwebmedia.net) and I will post the answers I receive every Friday.
Today two techpreneurs talk angel investors. Hank Williams of Kloudshare and Why does everything suck? and Don Charlton of The Resumator and Dontrepreneur offer their best advice on the subject of angel investors.
Angels are a second line of fund raising after personal capital and capital from friends and family. While angels are easier to raise money from than venture investors, angels still generally want to see an early stage working prototype, or launched product. The concept of raising money based on an idea written on the back of a napkin are long gone. Even a well written business plan is no substitute for real execution on the proposed product or service. Unfortunately, because initial execution is so important, more advanced technologies and product concepts are likely not fundable. This means first time entrepreneurs without significant resources in search of capital should focus on the creation of simple, more easily executed initial products.
Avoid first-time angel investors like the plague. They might not really understand the risk and timelines associated with startups. Always ask questions related to their “investment philosophy” or “desired options.” Ask them point blank about why they are interested in your company. An ideal angel investor who is someone who feels more like they are investing in YOU and not in your company. They should also provide more value than money. Look for people with connections or experience in growing successful businesses. Dumb money leads to dumb conversations.Category: Entrepreneur, Featured | Tags: angel investors, Clarence Wooten Jr., Don Charlton, Hank Williams, techpreneurs, the business of technology