Getting to "yes" in a world of "no"…


As an entrepreneur, much of the time I’ve wasted spent looking for angel funding has gone into role-playing conversations with angels before they happen. Basically, figuring out in my own head what it must be like to sit on the other side of the table… i.e. being bought lunch by a haystack-full of hapless startups & trying to work out which one is the shiny needle you’re looking for.

For job interviews, this kind of scenario-modelling usually works pretty well, because the minute you can figure out what the company is actually looking for (rather than the box-checking nonsense that tends to go into job specs) your chances of getting hired (or realizing that you absolutely have to make your excuses and leave within microseconds) instantly improve. Preparing the right questions to ask in advance to get you beyond the surface symptoms has got to be a good thing: and an entrepreneur talking to an angel must surely share many similarities with this particular setup, right?

However… there’s a problem. My people instincts – which are normally pretty sharp – don’t seem to work so well for the angels I’ve met. The whole point of having customers is to enchant and entertain them (as Arthur Miller was reputed to say, “give the audience what they want but not how they expect it”) – and you achieve this by knowing them so well that your products or services almost give them the impression you read their mind, their secret inner life. But UK angels are too smart for anything this straightforward: instead, what comes across to me is that they start by assuming you’re gaming them (whatever you say or present), and that a defining part of the entrepreneur’s nature is Dragon’s Den-style self-delusion.

But this is just ludicrous: I’m not some chancer trying to con bidders on an online auction, I’m a rational guy with an MBA who wants to find an equally rational investment partner (but with a different resource set) to grasp an opportunity. And that mismatch is really the core challenge: what entrepreneurs see as match.com, UK angels see as eBay, and – for now, at least – never the twain shall meet, not even at pay-to-pitch meetings.

How, then, can we ever mind-read angels if we’re not even the same site (let alone the same page) as them?

Firstly: if mistrust has (as I believe) become their default starting position, then as far as I’m concerned you’ll have to work roughly three times as hard than you might think in order to regain their trust. Basically, they are carrying around emotional baggage from all the failed startup investments (theirs and their peers’) that have happened, which you have to somehow neutralize before you can get to the arid yellow Fields of Indifference, never mind to the fruitful green Fields of Trust.

I therefore argue that you and your startup both need to find a way to demonstrate a (frankly) extraordinary level of trustworthiness to angels before you even consider pitching an executive summary to them. Look, why should anybody trust you? You’re 25 years old, just out of Uni, and even though you’re mentally sharp as a pin, you can have no real idea at all how vicious and dirty the world is, how painfully arbitrarily the {succeed-|-fail} dotted line is marked out in sweat and blood, and what bad stuff you’ll have to do in order to stay on just the right side of that shaky red line. Where on your CV does it say anything about making hard decisions and seeing them through? About firing people and about making enemies? About doing the right thing even when it hurts?

Secondly: over the last few years, IPOs have died a death while the whole issue of exits has silently transitioned from ‘when’ to ‘if’; all of which utterly frightens the Calvin Klein pants off angels. Can you imagine being 60 years old and facing the prospect of dying before any of your portfolio of investments matures into anything so solid as money? Hence the unspoken question entrepreneurs have to answer here is this: why should I have any confidence at all you’ll be able to sell your poxy Internet startup before I depart this miserable mortal coil?

If you can even begin to frame and answer those questions in your mind, then I think you’ll find yourself starting to mind-read angels, because these are the questions right at the forefront of their minds when they look at startups. Really, UK angels are not looking at opportunity and growth any more: they’re looking at failure and deathyour failure and their death. You wanted to see inside their minds? Well, there you are – it is what it is, make of it what you will.

Of course, the paradox is that to get past the numerous gatekeepers & ping onto their angelic radar screens at all, you have to produce a business plan that fixates in minute detail on the opportunity/growth side of things, when what actually dominates their decision-making is the failure/death side. Happy mind-reading!

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Comments on: "How to mind-read business angels…" (1)

  1. […] mind what UK angels actually do look for, what kind of company would I put my own money into if I were a business angel? True, given that […]

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