David Cummings on Startups

3 Reasons Local Investors Don’t Collaborate More

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David Cummings

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Last week an angel investor asked me why local investors don’t collaborate more. We chatted about it for a few minutes and I didn’t have a good answer for him. After thinking about it for a week, I realized there are three reasons why local investors do their own thing:

  1. Unique Focus – With so few investors, there isn’t much overlap between interests. Focus areas like sales and marketing technologies, cybersecurity, media, and fin tech don’t usually intersect.
  2. Investing as Hobby – Most of the local investors are investing their own money as a hobby, and don’t treat it as a profession. Also, since it’s a hobby, the pace of activity ebbs and flows depending on other life activities.
  3. Lack of Collective Goals – Without common goals, like growing the entrepreneurial community, there’s little impetus to collaborate.

Local investors don’t collaborate much, yet there’s a desire to build a stronger startup community, and a belief that more collaboration will help. Hopefully, with time, we’ll see more collaboration.

What else? What are some more reasons local investors don’t collaborate more?

Comments

2 responses to “3 Reasons Local Investors Don’t Collaborate More”

  1. Anand Thaker Avatar
    Anand Thaker

    I’ll add awareness and knowledge. I’ve met so many folks around town and see that many are really unaware of how to collaborate. Either because they’re not aware of how to bring worlds together or the steps involved without completely complicating the deal.

    The other is the lack of understanding of other strengths of the other investors.

    Reply
  2. Josh Austin Avatar
    Josh Austin

    How are we defining Angel investor here? There are a few groups of angels investors in Atlanta with specific interests like information security that work together regularly. These groups tend to be relatively small and made up of a few very high net worth individuals. The best way to get their attention is to be introduced by someone in one of their portfolio companies.

    With the other groups, it feels like the problem is that they come together with express intent of being “angel investors” instead of doing it because it’s fun to help new entrepreneurs start a business in the angel’s area of expertise.

    Reply

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