There are 5 properties that an investor looks at primarily in order to determine whether or not to invest. This is the first part of this series.
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As we discussed in the previous column, there are5 Investment PropertiesIn which an investor angel is primarily looking for a decision on whether to invest or not. Today we’re going to look at the first investment feature mentioned by Mario García, Founding Partner of Angel Hub: the importance of the team of co-founders / founding partners.
This is one of the attributes that are primarily analyzed and the one that carries greater weight in the decision. This is because ideas alone are worth nothing. You need capable founders who know how to implement them and make quick decisions to grow the startup. In fact, we say a lot about that at Angel Hub We don’t invest in startups, we invest in entrepreneurs. If these were horse racing, venture capitalists would bet on the rider, not the horse.
Some of the aspects that we as angel investors question ourselves are:
It is that they are at least two co-founders. The meaning of this lies in the risk of the individual founder leaving the startup, and since there is more than one there is a mutual obligation of responsibility for the results. This is also important as it is very difficult to find someone who knows all the problems and is almost always looking for someone with a technical profile and another person with a commercial profile. However, there has to be chemistry and affinity between the founders, this is the key, that they get along, that they have similar values, common goals, that they know how to work as a team, and most importantly, how to put that aside, ego and do not fight for positions within the company.
What is the story or experience of the founding partners? To see what personal added value each of them brings to the startup, know why they will work with you and what experiences confirm that they are able to carry out your proposal. What is the secret you discovered, where did the startup come from? As well as experience in other companies that could serve as key relationships for the startup.
An important but not crucial point when deciding whether to invest or not. It is known whether any of the founders previously started another company. We know the world of venture capital is not an easy one. So if you already have experience, you have part of the more advanced path. It’s also important to know what the history of these other startups is. What were your successes / failures? and how they took them and learned from them.
Some don’t know the real story of Twitter, but it’s a great example of a great team of founders. A former Google employee named Evan Williams ran a startup called Odeo. It was supposed to become a podcast platform, but when Apple published podcasts on iTunes, Odeo had to shut down. The founders of Odeo along with a key employee named Jack Dorsey decided to completely change the business and start Twitter, some of the Odeo investors didn’t think about the idea and got out of the investment, but those who really bet on the entrepreneurs stayed in the startup and brought Twitter to the stock exchange USA 2013 valued at $ 14 billion.
A good example of the importance of co-founders / founding partners. We are waiting for you in 15 days in the next column of ANGEL INVESTORS LIVE by Angel Hub where we will continue to look at the other investment properties.