Find Good Companies
The better your deal flow, the better your chance of finding great companies to invest in. You should seek to find at least 10 good companies for every one you pick. For many professional investors (e.g., venture capitalists), that number could be as high as 100 for every one they invest in. This is not just a numbers game. You want quality more than quantity. If you can clearly communicate the kinds of deals you are seeking, and the value that you are capable of adding to them, then you can help ensure that you get both good quality and sufficient quantity of potential deals in which to invest. 2.1 Sources of Deals Incredible companies, those with an excellent management team, great intellectual property (IP), customers and revenues, do not mysteriously appear from nowhere. During the pre-investment, bootstrapping phase of their startup, entrepreneurs need to network with a tremendous number of people to gain access to team members, facilities, resources, advice and customers. Good entrepreneurs are well-connected – but are they connected to you? Ideally these entrepreneurs will be referred to you by people who already know them well and whose opinions you respect.
Here is a starting list of places for you to look:
Your social and professional network – Often your most trusted source of referrals will come from close friends, business associates and professional colleagues. If your immediate circle of associates can give you access to good companies, then you may not have to look very far. Networking and educational events – Entrepreneurship has become very popular, and most cities have dozens of related networking and educational events that draw crowds of founders, founding team members and startups. Often the event organizers are seeking people like you to give a presentation, sit on an expert panel, or be part of the jury for a competition. These can be great ways to expand your network, raise your profile, and let people know that you are looking for deals.
34 A Practical Guide to Angel Investing
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