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This past week Hyde Park Angels traveled to the Angel Capital Association’s Summit, along with hundreds of angels from around the world. There we had the privilege of meeting some of the biggest, most preeminent investors. The topic these highly experienced, highly skilled investors came to discuss? What seals the deal for them — from specific metrics to founder attitudes and exit potential. So, without further ado, here’s what the world’s best angels are looking for in startups and their founders:
1) Great Companies That Make Great Investments
Clearly, investors are looking for great companies to back. But just because a company is an innovative game-changer doesn’t always mean it’s investable. If the market is too small and the model doesn’t allow for scale or repeatability in other markets, there’s not much chance of an exit and as a result, a return on investment.
2) Founders Who Cut through the Vanity Metrics and Get to the Core BusinessSmart investors can see through vanity metrics. In fact, the term “vanity metric” came up in at least 5 workshops, with companies that used them often touted as clearly “in trouble.” No one wanted to know the number of impressions for a given digital play. Even number of conversions was called into question unless they were also presented alongside conversion time and lifetime value.
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3) Founders Who Know How to Listen
Founders who could agree to disagree and maintain an open dialogue in high-conflict situations came up repeatedly as the ones worth mentoring and funding. The consensus was that investors are sometimes wrong, but being able to have real, two-sided conversations help build trust and understanding.
4) Founders Who Get Out of the Building Steve Blank stressed how important it is to seek out entrepreneurs who get out of the building and go find customers to talk to and understand. The best entrepreneurs aren’t necessarily the ones who use these conversations as a focus group, but the ones willing to get their hands dirty and use on-the-ground research to inform their respective visions.
5) Founders and Teams Who Know What They Don’t Know
And are always working to close the knowledge gap. In fact, the general attitude was that teams that learn quickly and are continuously learning are far more appealing than the ones who come in with expert knowledge but are unwilling to dig deeper.
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About Hyde Park Angels
Hyde Park Angels is the largest and most active angel group in the Midwest. With a membership of over 100 successful entrepreneurs, executives, and venture capitalists, the organization prides itself on providing critical strategic expertise to entrepreneurs and the entrepreneurial community. By leveraging the members’ deep and broad knowledge of multiple industries and financial capital, Hyde Park Angels has driven multiple exits and invested millions of dollars in over 40 portfolio companies that have created over 850 jobs in the Midwest since 2006.
About the Author
Alida Miranda-Wolff
Alida Miranda-Wolff is Associate Manager at Hyde Park Angels. Her role includes creating and executing marketing and communications strategies, planning and managing events, fostering and maintaining community and industry partnerships, and managing membership. Prior to joining Hyde Park Angels, Alida served as a manager, data analyst, and publication specialist at a multibillion dollar industrial supply corporation. She has led one of the most successful Kickstarter campaigns in Chicago history and worked with half a dozen startups in various marketing, content creation, and project management roles. Alida believes in creating valuable, spreadable multimedia content, and has done so as a freelance writer for several print and online publications.
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