You should be fine with some people thinking your investment thesis is crazy (in fact, that may be a requirement for success). Luckily, like startup financing, you don’t need every backer to like your pitch. Developing the ability to explain to people why your thesis is novel, correct, and not crazy can be very hard. You have to find something that is both novel and something that you can explain in a way that makes prospective backers understand the opportunity. It’s like finding a good startup idea, which can be deceptively hard. Creating an investment thesis sounds easy, but it’s usually not. If not (even if so), you should probably think through what your investment thesis is and how you are going to communicate it to potential backers. ![]() If you invested in the seed rounds of Pinterest, Uber, Facebook, and Google - you may not need to articulate much of a thesis to raise a Syndicate. By branding himself as a drone-focused investor and focusing on that market, he can easily find all of the important companies in the space. Weekly’s investment thesis is that drones are going to be an important industry and that there are very few investors currently paying attention to seed-stage drone companies. ![]() Weekly’s reputation alone probably would have been enough to raise a small syndicate, but he also articulated a very believable investment thesis. He recently raised a syndicate with over $125,000 in backing per deal by relying on his reputation as a notable founder and as a previously successful investor (both professionally, at Mexican.VC - a successful small VC firm, and personally as an investor in Plaxo and ) and founder. A good investment thesis describes how you will source deals and how you will make decisions on which to investments to make, in a way that is compelling to your prospective Backer.įor a good example of how to do this properly, look at David Weekly. The second way is to explain your investment thesis. Past performance doesn’t guarantee future results, but it does help prove your credibility. The easiest is to show a good track record. Before asking to trust you with their investment capital, you should have some way to show that you fit those criteria of a being a good angel. Naval Ravikant, the founder of AngelList, probably summarized it most effectively: there are three things that make a good angel - 1) access to capital, 2) proprietary deal-flow, and 3) good judgement. ![]() Before thinking about launching a syndicate, you should have a good reason why people should back you. Syndicates make the process of launching a venture capital “fund” much easier, but they don’t change the fundamentals of what makes a good venture investor. AngelList maintains a great support page about syndicates that you should read before you consider becoming a Lead. Leads source and support the investment, but are able to contribute more capital to the company and generally make some percentage of the profits that their investment creates. AngelList Syndicates allow investors (Leads) the ability to invite other accredited investors (Backers) to share in their deals.
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