What Makes for an Attractive Angel Investment - Part 2
In an earlier blog post we described some of what Sand Hills Angels members look for in attractive angel investments, focusing on the importance of the business idea. But that is not the only factor that angel investors look for. Another recurring element in the investment criteria is the founding team.
For example, Amos Ben-Meir says it is important to him to see a strong founding team — passionate, resilient, and committed — with a personal story that brought them to found the company. He likes to see strong domain expertise or, alternatively, a willingness to learn and adapt, along with a willingness to listen and consider other points of view. Repeat entrepreneurs is also a plus.
Once Manthi Nguyen likes an idea, she takes a closer look at the team. “I look at the entrepreneur and gauge whether this one has the experience, grit, resilience, and realistic expectations of what it takes to carry an idea to market. I tend to sort through the entrepreneur's background (upbringing, education, social engagement, sport activities, social activities, and causes) to see if this person has ever encountered challenges, and how he/she has overcome them. I also take a look at what this person's general outlook and attitude about life is. To be a good entrepreneur, I believe that you need to have a balance between pragmatism, perfectionism, and optimism. I then look at the entrepreneur’s negotiation style, as I believe the style of negotiation is very critical to resolve conflicts and navigate competing ideas.”
Beyond the skills and expertise of the founding team, Rick Lazansky looks toward the “Integrity of the founders and management team. While I suppose investing in low integrity founders might actually be a strategy, it pains me beyond my tolerance to be intentionally misled, not told the entire truth, and to be reached only when things have already gone irreparably bad.”
We find that many Sand Hill Angels members also look at the team to determine whether our group can add value. Gordon Mitchard looks for “founders who at least appear to value our experience and express openness to benefiting from it.” Markus Fromherz considers the team’s willingness to learn: “I also look at the team: ideally at least two co-founders with drive, who have an understanding of the problem, the customer, and the solution, and have the willingness to learn from investors, mentors, and the market.”