5 steps to success with Angel Investing
5 take aways from our talk with Murat Aktihanoglu - ERA Accelerator
We had a talk with Murat Aktihanoglu from ERA Accelerator in one of our sessions. Here are 5 take-aways on how to succeed as Angel Investor
Background information: Murat Aktihanoglu, Co-founder and managing director of Entrepreneurs Roundtable Accelerator (ERA). Ranked by Fobes as “'One of the 10 Hottest Startup Accelerators' Forbes”. ERA will invest $40.000 in a startup in exchange for an 8% common equity stake and provide an accelerator program. Collaborating with Innovation Norway with Norway New York Accelerator.
1: Don’t give up – support you teams
The journey of a startup is not always predictable. As an investor you need to be ready to help you startup teams over and over again. One example here is Buzztable. ERA had to help Buzztable to raise money 2 times before they were finally acquired by Sysco and ERA got 38 times back their initial investment. Without ERAs work with raising money Buzztable would probably never have made it to marked and ERA would have lost their investment.
2: Investing in a startup is not like placing a bet
You are not placing a bet. You need to believe that this company will succeed and do everything for them to make that happened. You need to build your network so that you can help them get in touch with potential investors, acquirers and customers.
3: You should never get in the way of the founders
There is a difference in adding value to a startup and getting in the way. You should never get in the way of the founders. They have the most information. The most data and they usually make the best decisions.
4: For all angel investment there is one goal and that is exit.
Start by deep research about the startups you are investing in. You should dive deep into the product, the market, the segments and the competitive situation. The team is also very important.
So to get to the exits this is what you should do:
- if you have operational experience you should help with that
- fundraising will always be an ongoing process and this is where an investor really can help understanding what traction numbers are other investors looking for
- help the startup to set milestones, and guide them so they can get to a place where they can raise the next round
5: Don’t be greedy and make yourself unreasonable terms
Keep the term sheet clean and standard. Venture Capitalist will avoid unreasonable terms and the wrong people on the capitalization table. The startup might lose an investment if an angel investor has to favourable terms, or is refusing to give up a board seat. Make sure you don’t create problems for your portfolio companies. Remember your only goal as an angel investor is to exit not getting the best out of this deal!