May 3, 2006

Communicating with Angels and Entrepreneurs

Good communication is a central component to success in any industry.  While technologies such as cell phones and emails have greatly enhanced business communication, additional means of communication may be necessary.  You understand that without extensive communication a deal cannot be made; however, you may also want to maintain your anonymity during the initial phases of due diligence.

According to Ron Thompson, of the Toronto Angels, several benefits result from increased angel collaboration. Benefits include:

  • Increased deal flow
  • Expanded opportunities to invest in quality ventures
  • Greater access to expertise
  • In a better position to negotiate with VC’s
  • More efficiently manage investment risk as the venture evolves
  • Increase angel value to the founders of the company
  • Improve investment returns
  • Trigger liquidity events has provided several tools to enhance communication between entrepreneurs and investors while safely keeping your personal information secure. Your membership at grants you access to the following communication tools.

Communication Center

The communication center allows investors to communicate safely and efficiently with entrepreneurs throughout the due diligence process. Investors can anonymously ask questions about entrepreneurs’ business plans. This tool allows you to gather the preliminary information that you need to move forward on the right deal.

Investor Discussion Board

You need to communicate extensively with entrepreneurs throughout the due diligence process. However, as an investor it is easy to forget the benefits of speaking with other investors. To facilitate communication between investors has also provided the Investor Discussion Board.

This tool provides investors with the means to ask questions of other investors about specific business plans. You have the option to make comments or pose questions about a business plan to other investors. If you choose, all of these comments can be made anonymously.

What Investors Want….The More Info the Better.

Entrepreneurs need to remember two important facts. First, investors want answers to the question they have. Second, investors want clear and concise answers to these questions. If you want an investor to envision your business idea the way you do, then you must make sure you have all of the necessary pieces of information. The pieces need to be laid out into a thorough and to the point business plan.

There are several things investors want to know about your business idea and you need to be prepared to answer any question any investor might have. The following are questions investors usually want answered:

  • Who are the members of your management team?
  • What traction do you have? (i.e.  Have you generated revenue?  Do you have customers?  Have you developed the product?)
  • Is there a good market opportunity?
  • Does the business plan show a detailed understanding of the potential customer?
  • What is the unique offering behind the plan?
  • Does the overall business model make sense?
  • If they exist, how does the company plan to displace firmly established competitors?
  • Have advertising, promotion, distribution channels and sales strategies costs been assessed and approaches tested?
  • Are the capital requirements, growth, and profitability reasonable?
  • Does the team have specific knowledge and experience that make them appropriate for this venture?
  • Does the plan show attention to detail and form (correct spelling, grammar, and punctuation; good organization)?

You need to make sure you incorporate detailed answers to these questions into your business plan. (Generally, length is not an accurate indicator of whether all areas have been sufficiently covered.)   In short, an information packed-business plan should contain information about market, customers, sales, product/service offerings, info about the management team, description of the competition and financial summary of business idea.

At, we have recently updated the questionnaire on the Business Plan Summary.  It is highly recommended that you login to your account and update your profile to include the new information.  Remember, the more detailed you can be in answering these questions the more likely an investor will invest.

May 1, 2006

The Part-timer, the Podcast, and the Dreaded Learning Curve

About a month ago, started producing our Podcasts in-house and I was assigned the project of interviewing, recording, editing, and publicizing the newest episodes. At the time, it sounded like an exciting adventure. Several precious part-time hours later, I had almost lost my patience. Luckily, our executive team never does (at least, not that they let us see. You might want to double check with their wives.)

Despite missed deadlines due to technical difficulties, I never received anything but encouragement. Therein lies an important lesson for every entrepreneur and investor–innovation requires patience. Every employee, no matter the amount of experience they have, is working on a learning curve with new environments and new assignments. Demand accelerated improvement, but allow them (and yourself!) time to find their feet before you expect strict precision. Your encouragement and patience will foster a work environment conducive with success.

The podcast featuring entrepreneur turned investor Rick Gibson ended up being a mass of excellent content, thanks to Rick. His experience building businesses is an invaluable resource for anyone looking to do the same. Be sure to check it out, asap.