- Angel investing.
How do I decide and what makes it work?
You know I've always found this word angel investing
such a funny word, it's almost like a religious being.
By all means, I'm no different than a banker
when it comes down to investing other people's companies.
Or parting ways with my money.
But there's three things
that I figure I'd shoot a quick video on.
To explain to people what are those three criteria
that I use for myself.
Hopefully it'd inspire other angel investors
to get involved in really amazing entrepreneurs.
Now I don't know if you know my story,
but I grew up in a pretty challenging environment.
I got in a lot of trouble as a kid,
and I met people throughout my teenage years
that really showed me the way.
That set me on a different path.
That really kinda believed in me.
And those people, I wouldn't even be in business
if it wasn't for them.
Most people would've thought I'd either end up
dead in a ditch, locked up in jail for the rest of my life,
or found in the loony bin.
So, you know I really feel blessed and amazed
with all the success I've had in business.
I've started five companies,
even though the first two are complete failures.
I've gone on to raise money twice now.
I've built and sold three companies.
And I say that not to brag,
but really just to let you know
that no matter where you're at,
if you're just starting as an investor
or you're trying to raise money as an entrepreneur,
I've been there.
I've had those self-doubt feelings
and I kind of surrounded myself with amazing people
that helped me get through it.
So the three things that I look for
to invest in an entrepreneur.
Number one.
Would I want to spend time with them?
Do I like them?
Would I want to go and sit down and have a drink?
I can't tell you how many times I meet entrepreneurs
and they're super aggressive in their approach.
Or they come off as a bit little too cocky.
And hey look, I totally get cocky.
I mean come on, let's be honest here.
But it's just they don't realize
that it's first about building a relationship with somebody.
Getting to know somebody,
not about getting right into the pitch.
I mean just ask me a question,
talk to me about my experience.
I don't know, I just feel like it's
you know one time I heard it's all about
know, like, trust, buy.
And to me investing is no different.
I need to know, like, and trust you first
before I'm even gonna consider parting with my money.
So that's number one.
Do I like you?
Do you inspire me?
Have you taught me things?
Because for me investing is very personal.
I don't do it for the financial rewards,
even though I've been fortunate
to have some success in investing.
I really do it because I look at it
as a way for me to learn.
To be around people that inspire me,
so that's number one.
Do I like them.
The second criteria is
do I feel like I could be of value to them?
Right? It's not about just investing,
it's can I create value for them outside of the money?
Is their industry something that I know how to do?
Is there people or contacts that I feel
if I made introductions would be super valuable for them?
That's really important to me.
Can I create value for that entrepreneur?
Can I be helpful over an extended period of time?
Is it something I know about?
And the third, and for me, honestly
one of the most important things
is am I a customer?
Do I understand the problem?
Have I felt this problem?
Because for me if I've never felt the problem,
then I'm not emotionally connected to the solution.
I'm not emotionally connected to the startup.
So if you come to me with a biomedical
or some financial algorithm or whatnot,
there's a high likelihood
that I wouldn't even be able to help.
Because I don't understand it.
I wouldn't be a customer of the product.
And it's no knock in the opportunity
and the amazingness of your team,
it's just me and who I am as an investor.
I really need to feel like it's something
where I could be a customer, I've felt the problem.
I mean that's the way I invest.
I go on AngelList and TechCrunch.
Anytime I have a problem,
maybe it's I'm working on a marketing thing
and I feel like there should be a tool that exists.
I'll go Google it, I'll go search it.
I'll go on AngelList and search and see
if there's a company trying to solve this problem.
And it's actually through that process
that I discover a lot of opportunities.
Recently I was talking to a friend
and he was cold emailing investors.
Like reaching out directly.
And I thought that's kinda the most ridiculous...
It's not the way I raise money.
I did a webinar recently on fundraising like a pro.
And in it I say that investors don't want to meet you,
they want to be introduced to you.
Now if you dissect that sentence,
it's don't cold email somebody,
but actually try to find somebody they know, like, and trust
and get that introduction.
For me, I suggest that people go after the entrepreneurs.
Anyways, this is really about my criteria angel invest,
I wanted to put that out there to the world
so that if anybody's thinking of reaching out to me
they understand the context of what I like.
And if they're thinking of investing,
maybe they might find value in those beliefs and principles.
And use those as filters to find great investments.
Again, it comes down to
people that I would want to spend time with,
they inspire me, they teach me things.
I feel like I would be a customer of the product.
That I felt the problem and I love the solution.
And third, I can be helpful to them
in moving and growing their business going forward.
So, I want to challenge you
to stack your business for growth.
And live an extraordinary life.
Have an amazing day.