Stairway To Heaven or Highway To Hell?
(Title inspired by @eful and that I just bought AC/DC’s “Iron Man 2”)
Angel investing in technology startups can look from the outside like a casino game – either roulette, where there is no skill in the roll, and you have no means to influence the odds, or Texas Hold ‘Em, where there is no skill in the draw, and you can increase your chances of winning only through betting. Or you may think the dribble they put on “Dragon’s Den” has some semblance in reality.
Actually, angel investing is very, very rewarding, both financially and personally, if … and that big if is the point of this posting.
The problem for most “qualified” investors – that’s US-speak for high net worth individuals that understand they can lose all of their investment – is that you really do feel like a punter in a casino – and the odds are stacked in favor of the house.
My comfort zone is technology, in particular ICT and with software as a favorite. I’ve worked in software, with the largest companies in the world (IBM, Cisco, America Online) and 3-person startups. That’s doesn’t give me an eye for hot investments, in fact I would have laughed at Zuckerman had he come to me in 2004 and asked for an investment in Face Book. I’d probably have done the same with Google. But then so did a LOT of “professional” VC’s.
I also flatter myself that I’ve had some business success, launching products, growing businesses and generating wealth, and my fair share of abject failures.
It’s my trade and I’ve been at it a long time. But, even a good long apprenticeship isn’t sufficient to make a successful angel investor. It can take a long time to evaluation a company, a business an opportunity.
And many angel investors come to technology investing from other trades, where they’ve been just as successful and made just as much money. It’s like walking into a casino in Vegas, ponying up to the craps table – a game you’ve likely not played before – with a stack of money, and rolling the dice.
Start\VC is an idea from StartVI. It’s based around the following premises:
• There are a lot of great technology startups in Northern Ireland that can generate very attractive returns.
• There are a lot of potential angel investors in Northern Ireland looking to generate very attractive returns from great technology startups.
Start\VC, at present just an idea from StartVI, can overcome the “fear of jumping in the deep end of the technology pool” of most angels by doing much of the heavy lifting:
• StartVI identifies and qualifies suitable technology startups as high potential opportunities for its StartVI six months incubation program.
•StartVI takes those companies through bootcamp and finishing school …
• and pushes and pulls them until their idea becomes a plan, and their plan becomes a business,
• and manages and mentors them on a monthly basis until the are ready for investment.
• either locally or in Silicon Valley.
Potential angel investors would benefit from this by:
• Getting introduced to suitably qualified technology startups – StartVI is putting its own money where its mouth is.
• Having access to those companies at each monthly operations review, so that you can see their progress, and learn the questions to ask for your own due diligence.
• See how the companies have shaped up – and operate their plan – for VI months.
• Have the opportunity to invest, or not, before the startup launch into a Series-A round.
As we see it, angels win – by getting access to qualified companies upfront, no-obligation opportunity to watch the companies operate and grow for VI months, and the option to invest early. The companies win – by getting the chance to show potential investors what they can do, rather than what they just say they can do – in a living due diligence environment.
We’d like to hear from you, test this idea, see if it has value and legs enough to encourage some reluctant angels to get in the game, help some Northern Ireland companies and make some money.
