When you ask investors, especially venture capitalists, about what they most look for in an investment they almost always say the team. Yes, the product and market opportunity have to be great, but the team has to be awesome (my view is that the team has to be great but the market has to be awesome).
I know an angel investor that has invested in over 20 startups. Yet, for the majority of the investments he hasn’t met the entrepreneur in person.
Here are some reasons he doesn’t need to meet the entrepreneur in person to make investments:
- He requires a working prototype to invest, so he gets to see what the entrepreneur was able to help build
- He uses Skype and Skype Video to talk with the entrepreneur, creating a much larger reach for investment geographies
- He invests small amounts in many startups, preferring a diversified portfolio approach
- He prefers email for helping out and doesn’t spend much time with each investment, but he’s available for them
The next time you think geographically about angel investors, remember that there’s a new breed, especially with the advent of AngelList, that will invest without meeting face-to-face.
What else? What are your thoughts on angel investors investing without meeting the entrepreneur in person?
2 thoughts on “Angel Investors that Don’t Meet the Entrepreneurs”
I mean, from what I’ve read, Warren Buffett certainly puts more importance on the team now that he makes large investments, but in the past he’s relied on numbers and studying the market. I think he invests very similarly to a venture capitalists/angel investor as opposed to the wallstreet method of investing, so I don’t think you need to meet the people face to face.
How much ROI do angel investors look for as opposed to VCs?
While this may be true, I still think a very important component to Angel Investing is getting to know your entrepreneur. The closer you are the more value you bring to the companies you are investing both your money and time. For a while we tried analyzing deals digitally and using Skype or video conferencing but it became very difficult to do this without at least one in person meeting…especially when there is couple of founders and or a small management team. Do the preliminary work digitally but if it is worth investing in it is worth a flight to meet the team in person.