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Longer Than Marriage
3 takeaways from my conversation with pro angel educator Margie Bacheler
Literally, some angel investments last longer than marriages in America. If you're going to be with this founder for eight to twelve years, unfortunately, that's longer than most personal relationships seem to go. So you're really looking at what's the fit.
You're investing in the founder. Does your gut tell you that what this founder's telling you is going to happen? Do they have a plan? Are they a trustworthy person?
Today, I’m breaking down 3 takeaways from my discussion with Dr. Margaret Bacheler, director of Educational Initiatives for the Angel Capital Association.
Check out our full conversation + how to connect with Margie here:
The Observer Express
Don’t have time to read the entire post right now? No worries, here are today’s 3 takeaways:
Angel Investing is a Learned Skill. Anyone can learn to do it effectively.
Angels Require an Exit. Liquidity is mandatory, and the entrepreneur must share this objective.
Decide What’s Important, then Find the Right Group. There’s an angel group for everybody - what’s important to you?
1. Angel Investing is a Learned Skill
The prospect of investing in private companies can be very intimidating. It is obviously far less regulated than options available in the public domain, leading many investors to skip it entirely. Margie’s whole job is focused on equipping investors to dive in with confidence.
What I really learned [through my] angel investor education, and I now try to pass along in my practice as an educator, is this is a learned skill.
Learning to be an investor should not be intimidating. It shouldn't be a hidden curriculum. It shouldn't be acronyms that only a select few understand. So I want to inspire and empower everyone with the terms and the knowledge that you can learn how to do this and learn to do it effectively.
2. Angels Require an Exit
I often take this distinction for granted, but I loved how clearly Margie highlighted one of the hallmarks of an angel investment is that angels are looking for an exit. If a founder isn’t aligned with that outcome, it’s a pass.
If you want to build a company and pass it along to the next generation that's wonderful. But Angels at some point need a liquidity event.
At what point (and it could be ten or twelve years in the future which is what our data says) would there be a liquidity event where the angel could get a return on this investment?
3. Decide What’s Important, then Find the Right Group
I think this point Margie made is so important. Every angel community is a bit different, and the only way to decide which one is best is to first decide what’s important to YOU. Here’s a piece I wrote to help angels think through this decision:
There's different angel groups for everybody. Determine your investment thesis, who you are, what you want to invest in, what is your risk portfolio, and how much you want to invest in a year.
Talk to three or four different angel groups, see if it's a fit. Because this is a long-term relationship as well.
Would you rather do a dinner meeting? Would you rather meet online? Do you want a group that has professional managers because you're really busy, working, raising kids?
I think there's a lot of personal self-assessment you need to do and decide how much time and money you want to put into this.
What Do You Think?
What have been the most influential sources of angel education throughout your journey?
*I include this section in every post because I’m genuinely curious to hear what you think. I answer every response, so please, don’t be shy!
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3 Lessons Learned
Do your own thing. It’s way more interesting.🎨This week I was appreciating the uniqueness of several influential creators. One of them literally doesn’t have email and records these ugly videos highlighting people he meets throughout the week. Another firehoses the world with cool statistics from their database. Another shares business hot takes in a pithy format. All of them are (at least on the surface) comfortable and confident in their own style, and aren’t overly concerned about what everybody else is doing. That’s why I read their stuff.
Say “Yes and…”➕I’m currently reading “Improv Wisdom” by Patricia Ryan Madson, a Stanford Drama professor. One of the core tenets of a good improviser is “accepting every offer.” What this means is always building the story by saying “yes and” instead of “no because.” While there’s certainly a place for the word “no” (especially as a time-strapped entrepreneur/dad/friend/etc), I love this mindset and am thinking about new ways to apply it.
Keep the main thing the main thing.🎯Every year my wife and I pick a word for the year. Here’s my “word” for 2024: “Focus.” Was convicted this week on some drift. Course corrected.
3 Interesting Links
Tune in next week for a breakdown of my conversation with an expert cardiac device engineer who successfully raised funding from multiple angel communities.
Until then, thanks for reading - have a great week.
-Andrew
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About Me
I cultivate flourishing.
I'm also the CEO of PitchFact, where our mission is to cultivate flourishing specifically through efficient and collaborative early-stage diligence. I'm a proud husband, grateful father, and honest friend. My love languages include brisket, bourbon, and espresso.