Tag Archives: Female Investors

The “Friends and Family” Round

In a recent article entitled “Things to consider before asking friends and family to invest in your venture”, published by TechCrunch, the author Charles Moldow provides the following guidelines to follow when contemplating raising funds from “friends and family”:

  • “Not all capital is created equal” – Moldow describes this round as “love money” where investors need to understand the risk of loss of their invested capital at this very early stage.
  • “Less is more” – don’t give away too much equity too soon.
  • “Don’t ask for money they can’t afford to lose” – this seems like a pretty basic concept, however too often we see an investor who uses funds for this investment that they truly can’t afford to lose.
  • “Educate your friends and family on the investment cycle” – make sure your early investors understand that additional financing will most likely be required down the line and what the implications are for their investment stake and potential returns.

As an angel investor, I have experienced many situations where the terms or structure of the “friends and family” round have made additional financings problematic. Oftentimes “friends and family” investors are not financially sophisticated and don’t understand how to value an early stage company or how additional financing rounds will impact their ownership percentage. This article is a must read for anyone contemplating a “friends and family” round and as the author states anyone still wanting to “be invited home for Thanksgiving”!

What’s a “Digital Immigrant” to do?

Several weeks ago, my “twenty-something” daughter suggested that I read “The Digital Divide” – a compendium of essays edited and introduced by Mark Bauerlein which present arguments both in support of and opposed to the new world of social media in which we currently reside. The first chapter of the book is a reprint of an article, first published in 2001, by Marc Prensky entitled Digital natives, Digital immigrantsThe “Digital Natives” he describes are members of the generation that has grown up surrounded by technology, my “twenty-something” daughter included.  In contrast, the “Digital Immigrants” were not born into the “digital” world ( black and white TV was considered a big step for this generation) but rather have adopted new technology later in life. Although the focus of the article was on the different learning styles of “digital natives” and the implications for our educational system, the basic tenets apply as well to those of us engaged in angel investing. Continue reading

The Jockey or the Horse?

I am frequently asked the “jockey or the horse” question – whether it is the team or the idea that is most important when considering an early stage investment opportunity. The real answer for me is that both are critical in the decision process. That being said, although I may invest in a company where the “idea” is not 100% formulated, I will always walk away from any opportunity where I am not completely convinced that the right team is in place and more importantly it is one that I want to be in partnership with over the long term. Continue reading

Are You Ready to Be an Angel Investor?

The term “angel investor” is used to describe a wide variety of investors in early stage companies. From the reality-show world of Shark Tank where entrepreneurs are grilled in front of a prime-time audience to established professional networks of angel investors including Tech Coast AngelsNew York Angels, Golden Seeds and others, it is clear that there is more than one type of angel. Continue reading

Angel Investing is similar to playing golf…

OK, so you are looking at the title of this post and asking yourself, “what in the world is she thinking; how can you possibly compare angel investing to playing golf”?

Let me explain… Continue reading

How to be a good mentor….

So you have made the decision to be a mentor to the founder of a company in which you have just made an investment  or a perhaps a young entrepreneur who might need some guidance in their search for funding. So what skills does a good mentor need in this adventure?

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Angel Investing -After the Check….

So you just wrote the check! Now what?

Image source: Fotalia.com

There is a perception out there that angel investors and venture capitalists are only focused on monetary gain and don’t work to support the success of their companies post-investment. Angels are making investments with the hope of a successful exit and unfortunately the statistics on the failure of startups are quite sobering. According to Shikhar Ghosh, a senior lecturer at Harvard Business School, the failure rate of startups is 30-40%. ( Source: HBS Working Knowledge Article by Carmen Nobel). But in addition to the potential investment returns, angel investing provides a unique platform for engaging with the companies in your portfolio, which is not the case when  investing in the public markets.

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Angel Investing – Flying Solo or Joining an Angel Group

Once you have made the decision to become an angel investor, you need to decide if you want to fly solo or join forces with an angel group to make your investment decisions.

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