Dear Startup Investor,
It’s the Research Team here. We just got back from the second annual Angels & Entrepreneurs Retreat in Austin, Texas – and just like last year, we’re unbelievably stoked to bring you some of the highlights of this historic event.
When we say “highlights,” we don’t mean the parts that were the most fun, or the moments we laughed till our sides hurt (though there were plenty of those).
We’re talking about “a-ha moments” – when some of the world’s most famous, influential, innovative angel investors and entrepreneurs shared a new idea with us that literally took our breath away.
That’s the real power of these events, after all. We get to mix and mingle with dozens of thought leaders, tastemakers, problem solvers, and world changers. And everyone who attends, whether virtually or in person, gets to be part of that ecosystem.
If you couldn’t tell, we’re still feeling the magic – and if you have 2 minutes, we want to share that inspiration (and some killer strategy tips) with you.
“The founders I want to invest in aren’t the ones that need me as a crutch. They’re the ones that say, ‘Look. The train is leaving the station one way or another. This is your chance to get on, but even if you don’t, we’re going to get to our destination.'”
– Daymond John
We talk a lot about the importance of a great founding team here on the Network – from their track record, to their education, to their charisma and story.
Every angel investor has different things they look for in a founding team. For Daymond, one of the most important things is that the founder doesn’t need him in order to succeed.
Think about it: your whole mission is to back visionaries that are solving serious problems and changing the world. And you’re pretty great, but if they need you in order to get off the ground, that’s a red flag – and it might not be the right star to hitch your wagon to.
“No matter how prepared you think you are, the education really begins when you make that first angel investment.”
– Henry Bingaman, Angel Investor
Henry Bingaman is an accomplished angel investor who’s completely transformed his life – “from minimum wage to multimillionaire,” as he puts it – and his first investment was just four years ago.
Before he took that leap, he says he spent hours upon hours reading and researching, trying to build out a strategy. And that’s a great idea for anyone who’s just starting out. But as he pointed out, that’s just prep work. Your education and skill start to really take off once you start getting your hands dirty.
“If the world understood you and your mission already, there wouldn’t be an opportunity.”
This came up during the Diversity Panel we had on the final day of the conference – and it’s a great point for angel investors and startup founders alike.
You hear stories all the time about people who passed on the opportunity to invest in what are now some of the world’s largest companies. Heck, Daymond himself passed on Uber!
It happens to every great angel investor. Nobody with a good-sized portfolio bats a thousand. The point is, just because somebody else doesn’t see the potential in a startup yet does not mean it’s going to fail.
Do you see the vision? Does the founder? When the rest of your due diligence checks out, the most important decisions often come down to a gut feeling. It’s okay to listen to that.
“To get the best return, you want diversity. From an investment perspective, companies that have diversity do better.“
– Brandon Andrews
If you don’t know Brandon Andrews yet, you should. He’s a casting consultant for Shark Tank with a mission to bring diversity to the show. He’s also a former White House staffer who helped form the JOBS Act (and an entrepreneur himself!).
When it comes to backing “underestimated” founders (a term we love that we learned from Arlan Hamilton of Backstage Capital), Brandon knows that it’s not just a matter of doing what’s right. In fact, he says not to invest in diverse founding teams just for the charity of it. You should do it because you want to make money as an angel investor.
And the numbers don’t lie: companies with diversity perform better.
Daymond John’s top 5 tips:
- Look for an amazing founding team – with experience, charisma, passion, drive, and a track record of success
- Look for companies that solve a real problem
- Look for startups that have a clear proof of concept – like pre-orders, a prototype, a product that’s already hit the market, and other signs of traction
- Do your own due diligence – always, no matter what
- Don’t slack on networking! Deal flow can come from anywhere, and you’ll see way more of it come your way if you keep in touch with other angels and entrepreneurs.
No need to explain this one – when the People’s Shark himself shares his strategies with you, you commit them firmly to memory.
To be honest, nearly every moment Daymond was onstage was an “a-ha” moment. So if you weren’t there, and didn’t get a chance to tune in, keep an eye on your inbox. Over the next few weeks, we’ll start sharing the footage from the event. Spoiler: It’s full of revelations like these.
We’ll be back soon.
The Research Team