If you are an angel, should you make an introduction to your firm? Angels are people with the net worth based on IRS interpretation to make investments in seed stage companies. However, just because you have the net worth, doesn’t mean you have the skills to be an angel.
Angels not only write checks, but they do a lot of other things for seed stage companies. They create opportunities for them, mentor them, find people for them to network with assist in funding, and might even help them exit.
It’s sort of a big job, and it’s all done for free-unless you manage a fund. Then you get paid to do it, but you aren’t an angel then. You are a fund manager.
When a firm gets hot, lots of people all of a sudden try to find a way through the door. It may be to sell them services. It might be to try and get a job. Perhaps it’s to find a way to invest because the firm is deemed less risky now than it was at the seed stage. Imagine the flood of attention someone like Mark Zuckerberg got in around 2008. He could have been tied up in worthless meetings for months.
The problem is, there is no set rule on introductions.
How do you decide? For me, I try to find out exactly what the person wants from the firm when they want an introduction. You can accomplish this in around five or ten minutes of questioning. The reason you do this is that you don’t want to waste anyone’s time. The worst thing that can happen to you is that you wind up in a physical space with someone and you have to interact when you know it’s going nowhere.
It seems if you have a cup of coffee with a person, it will take an hour. For a start up company, an hour is a precious thing to waste when they could be doing something productive. Keep that in mind.
It also helps to have a good CEO on the start up team. They need to do their part to communicate to angels what they need. If they need financing, or if they would like to be introduced somewhere, they need to tell someone directly and clearly. Then the information can be acted on. If the CEO simply thinks about it, or talks to the wrong person, nothing will get done.
The next thing the CEO has to do is let the angel know a connection has been made, or not made. They need to tell them if it was a good meeting or a dead meeting and just a few statements why. If there are next steps the angel can help with, the CEO needs to direct them.
My personal experience is if you are creating a bona fide customer, introductions are welcomed happily. You are creating value for the firm, and the investors.
Today, at 11:20 AM PT: Get the Market Movements in Advance; Williams Edge Webinar for August 20th, 2014 | John Ransom
Today, at 11:20 AM PT: Get the Market Movements in Advance; Williams Edge Webinar for August 18th, 2014 | John Ransom