I see a lot of funding opportunities. Most of them are in Ireland and the USA for practical reasons.
See, I have experience in those markets, as well as contacts, domain experts, potential co-investors and future funders. Investing in other countries or regions involves different laws, legal documents, exchange-rate risks, political uncertainties, altogether too many unknown unknowns. Layers of anxiety heaped on top of the usual sleepless nights.
Comfort counts for a lot in a deal. For the investor and the management team. It’s why serial entrepreneurs (as well as serial scientific inventors and serial investors) are so popular. Knowing what to expect is a powerful advantage in the startup world. It’s why I’m a big believer in analogues. If I can compare a company to another (ideally, a brand name or signal success), it provides a critical link to reality.
It’s good to know that the team is not sailing a new, untested course.
They’ve looked around for models, best practices, learnings from others. A simple analogue isn’t enough to seal a deal, but it’s a comfort, one more reason I might sleep a bit better in the ensuing months and years post investment. For an investor, hearing that a company is Starbucks for bubble tea is more comforting than hearing that the company is blazing a trail, or doing something altogether new in the marketplace.
Last week I interviewed two companies in which I’m considering investments. Both have good teams, interesting products in large markets, happy reference customers. We went through their decks and financials. I had done enough research to have prepared a list of questions for each, and we had good conversations. Every deal has some hair on it, and both teams were frank about their assumptions versus the realities of going to market, the needs for 2.0 products (and better UX development), the challenges of scaling and what it will take (in money, personpower, possible offshore subsidiaries).
In the middle of the second company’s Q&A, the CEO turned the tables and began asking me questions. What did I look for in companies? What was my investment philosophy? Did I follow-on invest? What investments was I most proud of? Most ashamed of? Could I introduce them to some of the CEO/founders who had taken investments from me? Could I introduce them to some of the individuals or funds that co-invest with me?
I’m strongly disposed to invest in one of these companies. Which, I think is a valuable lesson for investors and investees alike.
Comfort counts for a lot.
Discuss amongst yourselves.
Always happy to hear from you.
Educator (Associate Professor) / Entrepreneur / Leader of angel communities /
Entrepreneur in residence at PorterShed and BioExcel