TechConnect Discusses De-Risking the Deal: Angel Investing in Science and Tech Startups
One of the biggest challenges for young ventures in science and technology is securing the necessary funds to build a business and grow. During the GIST Network June TechConnect “De-Risking the Deal: Angel Investing in Science & Tech Startups,” investing expert Marcia Dawood discussed angel investing, how investors can provide both funding and insights, and answered questions about funding for new businesses.
Dawood, who is a managing partner at BlueTree Capital Group, talked about the difference between venture capitalists and angel investors, and what that means for entrepreneurs who seek funding. Angel investors -- individuals who are willing to invest in young companies in exchange for convertible debt or ownership equity -- she said often play a role mentoring their founders as well as investing.
“You really want to start looking for investors as soon as you possibly can and preferably before you need an investor,” explained Dawood. “Because if you really need the money, that doesn’t make your company or your opportunity for an investor really attractive.”
Dawood, along with Eli Velasquez, director of venture development at Venturewell, talked with people across the world on a wide range of topics from product development and market research to network building and pooling investors into an angel group for regional development.
One of the major points Dawood stressed throughout the conversation is a need to rollout a minimum viable product and encourage customer feedback to improve products and services over time.
Dawood said it is also important that entrepreneurs have a plan in place throughout the lifecycle of their companies.
“I'm talking about a plan of funding. How are you going to get funding for your company and how much do you need throughout the life cycle of the company all the way to the point where you think you can get somebody to either buy your company or take it on to a public market?” she said. “That says an awful lot about the thoughtfulness of the entrepreneur.”
In creating a network of angel investors in a community or a country, it is important to connect with angel investors from a variety of fields who are not only interested in investing in the region, but who can also provide insight and guidance for young business ventures.
Most importantly, Dawood said it is important entrepreneurs are networking and receiving feedback any and everywhere they can.
“Talk to everybody that you can,” Dawood stressed. “Talk to your customers. Talk to future investors. Talk to potential buyers. Even if it is super early, you want to talk to as many people as you can and get as much feedback as you can in order to grow your business.”