Many entrepreneurs dream of having one or more angel investors fund their startup.
But almost none of them would know where to find one, how to secure a meeting with one, or what they would say if they ever got in front of one.
In this conversation – based upon my own experience making and watching scores of investor presentations – I ask Baltimore-based angel investor Roger London to share best practices regarding: deciding which angels to target; how to gain an introduction; how to prepare; what to say; and what to expect.
Roger really knows what he’s talking about so, if you’ve ever thought that you’d like to talk to an angel (investor) be sure to listen tight!
What follows is a computerized transcription of our entire conversation. Please excuse any typos!
Frank Felker
Regular listeners of the show know that human communication is a great passion of mine that I really try to help people do a better job of understanding each other. And my number one focus is in marketing communication, helping people to communicate the value proposition and the benefits and features and functions of their products and services to their target market. But another area that’s a big, big deal for me is public speaking, this is something a lot of people say that they fear worse than death. And I’ve done a great deal of public speaking, I’ve spoken all across the country. I’ve spoken, I guess scores of times, I’ve spoken in Sao Paulo, Brazil, and I’ve spoken in Dusseldorf, Germany.
And I’ve spoken the largest group of people ever spoke to was 1200 people in a ballroom at the Paris Hotel in Las Vegas, and recently spoke to a really tough room, it was a high school class in Fairfax, Virginia, I tell you, that’s a tough room. That’s a tough room.
But of all of the presentations that I’ve ever made, I want to throw one more thing in there another very tough room, the opera Hall at the john F. Kennedy Center for the Performing Arts, I twice, MC there for Fourth of July celebration. So when I tell you that when I’m about to tell you about a tough room and a tough place to present, you’ll know I know what I’m talking about the toughest presentations I’ve ever made, were investor presentations, pitch meetings, where I was trying to convince professional investors with millions of dollars to invest, that they should put some of that money in my company.
And I’ve since then, since I had the opportunity to do a lot of those pitch meetings. Back in the late 90s. And early 2000s, I’ve had the opportunity to watch a lot of other entrepreneurs give their pitches. And I would say to you, and this is from my passion for communication, that I believe that making an investor presentation and the two parties to it is perhaps one of the most challenging communication processes that human beings ever encounter. And so today, I want to help everyone do a better job with that. And I’m very pleased. And we’re all very blessed to have an expert at this topic. Join us today.
Roger London, welcome to Radio Free Enterprise.
Roger London
Thank you, Frank, pleasure to be here.
Frank Felker
Roger is a serial entrepreneur. He’s an angel investor. He was formerly an actual corporate venture capitalist, if you will, for Nokia, previously in his career, and he’s seen a lot of investor presentations, he’s seen a lot of pitches made by entrepreneurs. And he’s going to share his wisdom and experience with us today.
Roger, I want to I want to start with this. As I mentioned a minute ago, I think that this is literally and maybe people think I’m crazy by saying this. But there are not many presenters, excuse me communication, experiences or challenges that I have ever faced, that were more challenging for me personally than trying to pitch an investor. And I think a big part of the reason there’s such a huge chasm between the two parties to the conversation, is because the entrepreneur doesn’t really understand what it is that the investor wants to hear from him.
And at the same time, while the investor is very experienced in these things, he doesn’t really know what the heck this particular entrepreneur is trying to tell him. And so what would your reaction be to that, that this is such an extremely challenging environment? Would you agree with that,
Roger London
but certainly true, I think it’s more true of the former than the latter, the investors know that the entrepreneurs may not be tuned to, to speak their language. So the, the entrepreneur needs to understand that the investor is not going to be emotionally invested as the entrepreneur is, and that we’re just keeping a mental checklist of the red flags versus the green flags. Ideally, it would be great if they could do a dry run with an investor. I’m a I’m a member of a couple of angel groups, and one of them Baltimore angels in Baltimore, Maryland. We have investors who are willing to sit with an entrepreneur prior to pitching to the group And we tell the entrepreneur what we heard as, as my dad used to say, it doesn’t matter what I say it matters what they heard.
Roger London
So that is the challenge and trying to understand what is important to the investor is really a key to a good pitch.
Frank Felker
That’s great. And that’s exactly what I’m hoping we will be able to reveal a little bit of here in, in our interview today. So let’s start with this. And because before the entrepreneur ever gets a chance to get in front of an investor, or angel investors or venture capitalists, they have to they have to meet them, they have to get them to agree to listen to their pitch, what would you say is the best way for an entrepreneur to approach or get the opportunity to meet an angel or a venture capitalist.
Roger London
So a warm handoff is best. And by that I mean that a lawyer or the incubator manager or an accountant or serial entrepreneur, or someone who the investor has at least some working relationship with makes the referral. If the deal comes out of left field to the investor, the odds are pretty low that it’s going to get much less visibility. If the entrepreneur doesn’t know any of these kinds of people, then this is going to be the first sale that that they’re going to have to make, you know, every entrepreneur has to make sales, they may not be salespeople, but they have to convince people to come on board, they have to convince investors to invest they have to invest in convince customers to come on.
So their very first sale may be getting someone to be that referral source. service providers are the easiest, you know, the lawyers in the accountants, they’re always looking for new clients. So they’ll literally sit and meet with anyone. So if you can find there’s always lawyers and accountants and consultants in different communities, who are looking for entrepreneurs to gain as clients, they’ll give you a free first meeting, meet with them, see what kind of investors they have, what kind of value that they can have? And maybe they can make a referral for you.
Should the Referrer Pre-Vet the Relationship?
Frank Felker
Now, would you expect that you as the angel investor, or VC, the your warm handoff person, the service provider, to do a little bit of a little bit of vetting on their own to know what kind of deal or entrepreneur is someone that you’re likely to want to speak to? Or do you just expect them to make the introduction and don’t expect much vetting from them?
Roger London
I think that could go either way. But the burden is really on the entrepreneur. If the if the lawyer makes a referral, and the entrepreneur looks up that investor and sees that they don’t make an early stage investment, or they don’t invest in this space, or you need to have a team first or they have certain criteria, it’s good to to to qualify your time, you may want to peel that back and the lawyer or referral source, are you sure because they don’t really do deals at my stage. It doesn’t waste your time and it doesn’t waste it doesn’t burn a bridge with the investor because the investor will not look kindly on you wasting their time. Now there is something to be said for sort of seeding the field and meeting an investor that maybe they’re not ready for you now, but they might be in a little while. But make sure that that it’s a space that they’re interested in, that you show them a clear path. And you recognize that you may not be ready for them at this moment, but you just wanted to get on the radar.
Frank Felker
That’s great. I like that sort of warm up a little bit and then come back and see them at a later point. Right. The many entrepreneurs may not understand that. Different investors look for different types of deals, this is kind of thing you were just talking about. They invest in different industries. They’re looking for companies that are at different stages of development, people who are looking for different dollar amounts, whether it’s series ABC, and so forth. And so as you just described, it is important for the entrepreneur to sort of suss all that out, or at least to the extent that they can before they meet with you. Is this type of information generally available on your website, or where should they go to try to find the answers to those questions.
Roger London
It would be a website, it would be LinkedIn. If the firm or the angel has a Facebook page, and I’m sure after a little bit of Google searching, they can find this this information.
Frank Felker
Now, just a quick question for you. You and I met at the Sempra startup event in the fall. of 2014. And all of the presenters, there were veteran printers, former military personnel who are now going into business, and many of their offerings had to do with national security or defense related products and services is that your target market is that the verticals that you look at personally,
Roger London
it is I prefer things in the security space, mostly cyber, or advanced it. We see advanced energy solutions that can be used in a in theater and a military application, which clearly have broad benefit, and can be a dual purpose. We prefer a dual use technology, something that can be used in the government space and the private sector. The one trick ponies is challenging, you know, the $1,000, hammer, so to speak. That’s tough.
Frank Felker
Like that example. Now, again, I just for the elucidation of the entrepreneurs, you stick in this vertical and many investors do. And please correct me if I’m wrong, you do this, because this is these are areas where you can bring additional value beyond simply writing a check that you have a Rolodex of connections that you know how things work that you understand things like you just described, that it’s important to have multiple applications for a given solution and that type of thing. So is this the type of reason why a smart investor at least sticks to their knitting and stays in a particular Lane? Yeah, I
Roger London
would say that there’s dumb money and smart money. And the dumb money is someone who has enough cash or assets that they’re willing to do some risk investing. And, you know, it may be a lawyer, doctor or accountant, and they just want to play and they have some extra money, and they hear about some deal, and they’ll invest 25, or 50, or 100, or whatever the number isn’t. But they can add much more value than that. The Smart investor is someone who has a
Frank Felker
subject matter expertise and a Rolodex within a given market and can add more value with relationships or helping to accelerate the development cycle of a technology or shorten the sales cycle, to the marketplace. That’s what that’s what Smart Money can do. And unfortunately, in my experiences, when I was raising money for this.com, back in the.com, era, all we got was dumb money, right? And, and so we learned pretty quickly and painfully that money is money is money as money, but what you really want is more than just money. We were not getting that. I recall also from your presentation at Sempra startup that you said something about, you can do a sort of a magic trick that you use the word de risking to describe so that almost immediately, just by the mere presence of you in a transaction or with a business, that you’re able to accelerate the value of the company, because you make it a less risky investment for whoever brings in the next tranche to the next round.
Roger London
Well, I may not have been talking about me personally. But yes, if you have earlier investors, it it does de risk the deal for later investors providing that those earlier investors are actually smart money and they can contribute. It does de risk the deal for the next round. Great.
Frank Felker
Well, I sort of got us off track there, I wanted to kind of go chronologically for through the process for the entrepreneurs. So let me bring us back to that. We were talking about how to get an introduction to a particular investor we talked about that it would be important to present to somebody who’s more likely to be interested in your deal based on your industry, your stage of development and so forth. Let’s say that you somebody does want to speak to you prior to an actual meeting with them which you prefer to receive something like a one-page description of their business with bullet points about their industry, the competitive marketplace that how much money they’re looking for something just very brief, a one pager that gave you a quick overview would that help you make your decision whether to meet with them or not?
Roger London
Not only would it helped me decide whether to meet with them or not. But if we do meet or our meeting will be at a higher level. Because I once I have that I might even start the meeting with you know, here we presented me with this and then fire them three or four or five questions, because that’s what I need to have clarified or that’s what I need to peel back a little bit more. That’s what I don’t understand. But, you know, if then they don’t have to repeat things that I already have, you know that already. So it maximizes my time. And there’s,
Frank Felker
I appreciate that I hadn’t looked at it that way. And of course, time is such a critical element for everyone here. And particularly for the investor, who is getting a lot of requests to meet, they want to maximize the value of their time.
What Happens When You First Meet with an Angel Investor?
Frank Felker
Now, let’s say again, taking this chronologically that you do choose to meet with a given entrepreneur, what will add meeting look like? I mean, where will it be? How long will it last? What happens during the meeting, and what would be a great outcome for the entrepreneur? What would a successful outcome look like for an entrepreneur who has met with you, I’m taking it they’re not going to walk out with a check. But short of that, what would be a good outcome?
Roger London
While you’re testing needed for my recall, but so it, it’ll probably last anywhere from 20 minutes to 45 minutes, depending on how well or poorly it goes. It could take place over the phone. Ideally, like I said, earlier, I’d like to have received some basic executive summary. So this this call, or this in person meeting or Skype is happens at a higher level. At that point, if I have received information, it’s that meeting is really a triage I addressed the flags, we’ll talk about green and red flags in a little bit button, we’ll address the flags, talk about the key issues, I’ll provide them some feedback. And at the end of this, you know, several things would happen is that I may recommend that they pitch one of my angel investor groups, or maybe they pitch another investor that’s more suited or a corporate venture group that I know that’s better suited. And or I may refer them to a needed resource, like an IP or a corporate attorney, some subject matter expert in that space. So those would be positive outcomes. I and I would, I’d be so bold to say that a positive outcome could be the cold, hard truth that I tell them that they should move on.
Frank Felker
Yeah, they may not see that as a positive outcome. But in the long run,
Roger London
I’ve had some pretty good discussions with other angels about this. And you know, angels say we don’t want to discourage the entrepreneur. And I say, I agree. I don’t want to discourage the entrepreneur, but I’d rather save their marriage I’d rather than get take a second mortgage out on their house. And they can be an entrepreneur and another deal that has a lot more viability. But this thing is a dog, we should take it out back and shoot it and you know, you don’t tell them that you don’t say it like that, you realize that this is their baby, and they have a great deal of pride in it. But if if it’s not, you know, if it really is an uphill battle that they need to know that.
Frank Felker
Yes, I agree. And it’s part of this whole communication challenge that I see is it in their mind, they see it as this great opportunity. It’s a sure home run, it’s this and that. But sometimes we just need a big cold water splash in the face of reality. Well, you know,
Roger London
the expression that everybody thinks their baby is beautiful, right? Yes. Right and clearly can’t be true.
Frank Felker
Absolutely. I had a bad experience. When I was pitching a particular small venture fund. I’d flown 1000 miles to meet with a guy who was the CEO and chairman of a billion dollar top line nysc traded company, this guy was a big deal. I wasn’t five minutes into my pitch. He says Hold it right there. He says, I got to tell you, I don’t understand what the hell you’re trying to tell me. I was like, Oh, yeah, it’s before I could even figure out what to say next. He says, Let me tell you what I think you’re trying to tell me. I said, Okay. That’ll give me time to think. And so then he told me what it was. Exactly. Yeah. I was like, yeah, that’s exactly what I’m trying to tell you. He says we don’t want that. Thanks for coming. It’s good. Yeah, it was good. It was
Roger London
over the phone and avoided the 1000 mile trip.
Frank Felker
Yeah. I don’t know why that didn’t happen. But anyway, so these things do happen out there entrepreneurs, and don’t take it personally. It’s only business. Okay, so let’s say during the meeting, you know, and people just want to run on and keep talking. They feel as though if I just keep talking, he’ll understand and he’ll want to invest? How much time should they be prepared to speak? And how should they divide up the time between talking and answering questions? I’ll just say one more time. And again, this is all for the benefit of the entrepreneurs. People put this huge PowerPoint together and they Oh, and there’s, you know, 500 words. On every slide, there’s 500 slides. And that’s just never going to work. What would you say is the best number of minutes and number of slides that you’d like to see, before you’re telling them the same thing? That guy told me Hold it right there, I’ve got a few questions or it’s time for you to go. So
Roger London
I think that they should practice a 10 to 15 minute pitch. And they should practice, they should practice in front of the mirror, they should make sure that they don’t pace that they don’t say I’m a lot,
and they should be prepared for interruption. So they should actually pitch to some people, I have ADD, and there’s a lot of add investors like me that if I start here, and things I don’t care about, or if they say something that troubles me or I question I’m going to interrupt them, so they need to be prepared for that. But the pitch should be really crisp, you know.
I always use the three C’s clear, concise and compelling. That’s how you should write and that’s how you should speak. And they have to remember that they can’t cover everything in the first pitch, that’s what due diligence is for the purpose of the first pitch is to get me interested and get a second meeting. So that they have to keep that goal in mind, their goal in mind is not to get a check, they want their goal, their goal is to have a follow up meeting. So regarding the death by PowerPoint, they probably shouldn’t have more than 10 slides, the slides should be more pictures and graphics than text, you know, maybe a handful of bullets. Each bullet should be more than no more than one line. And they should have one or two points that they want to make per slide. So the more text that you put on the screen, the less the investor is listening, because they’re reading. So you want the picture, or the graphic to illustrate the point that you’re trying to make.
And the couple of the couple of bullet points are really, they map to the point, they’re really pointers to the point. So if if you want to make it the point of one slide is to show that you have customer traction, just show up, you know the logo of that customer and you know, a couple of faces of the customer. You know, it’s a $2 million deal over five years, or you have an LSI or just something short and clean, because that’s what that imagery is what I’m going to remember.
Entrepreneurs Always Bury the Headline
Roger London
And finally, I’d say don’t bury the headline, right? entrepreneurs do that all the time.
Frank Felker
What do you mean by that?
Roger London
So if the product is demo viable, if it’s a product that has some visual value, rather than try to paint a visual, verbal picture describing a web app, or a medical device or some visual analytics tool, show the damn tool. I can’t tell I was at I listened to a pitch the other day about somebody that was doing a mobile app and they were telling me all about it and 10 minutes in they said here let me show you. And I’m like why the hell didn’t you start with this a because I would understand a lot quicker what they what it is right and be it shows me that they have it. And it’s not slide share. A big fear of investors is that this thing is vaporware. So if they have something to show, show it and if they don’t have a product yet that they can show or pass around or demonstrate then at least screenshots of it that show the benefits and what it’ll look like if it’s not demo mobile demo mobile. Right?
Frank Felker
That makes a lot of sense. You know, there was a presenter at the center startup. I won’t even go into exactly what their product was. But it was a similar thing. He stood up there for quite a period of time. And he talked about this. And then the other thing, and I couldn’t really understand what the product was, and nobody could. And so but then finally Somebody said, Well, what do you need the money for? And he says, Oh, well, we have a $2 million contract with Marriott that we can’t get enough product to them on time. And so we’ve got to ramp up production. And you talk about burying the headlines.
Roger London
Exactly. Right. Yeah. I mean, we care about traction in the team. So if you have traction, or you know, sometimes you’ll hear that the you know, the team was has been in some other startup that raised capital but had a great exit. And you don’t hear about that till the a slide when they talk about the team. That’s been In the headline, and
Frank Felker
then in terms of those slides, so I imagine you this should be one, you know, whatever the product or the service is, and then what else who the target market is a competitor, what sort of slides Do you want to see.
Roger London
So I need to know quickly what it is. So in either show it to me or, or show me screenshots of it, or show me some visuals of what it is so that I have context for the meeting, it would be great if I could see a status, right in the beginning of hears our status for IP, here’s our status for the team, here’s how much money we’ve raised, if any, here’s how much money we’ve put into it. Here’s what generation the tool is, here’s what you owe on all of these in very short bullets. But I can see bam, bam, bam, bam, bam, okay, I have a frame of reference of where you are and what you are. Now, let’s talk.
Frank Felker
That’s great. Very well put, excellent.
Roger London
You know, it would, of course, then, a lot of times the entrepreneurs spend a great deal of time on the size of the market. And it’s really a 10 or 15 second spiel, right. I mean, I entrepreneurs spend two or three slides in three minutes talking about the cyber security market. I know that. Okay, so, so just say this is for cyber and data. Great. I got you. That’s great.
Frank Felker
Yeah. So, you know, something that I ran up against, when I was out there. And again, this was during the.com era. And things, you know, everybody was trying to convince themselves that all laws of economics had been suspended, at least temporarily. And there was a new economy and profits be damned, you know, we just got to go, go go. And so there was a problem. I had a problem with that, because I had run a small business for a long time. And to me, it’s, you know, it’s nuts and bolts and turn on a profit and satisfying customers.
And it was, to me, I just had more of a real, in my opinion, or real business sense, rather than, I guess, I should say, from my perspective, but what a lot of the investors that I spoke to, or prospective investors, who indeed were not smart money, as I have alluded to, in previous interviews that I’ve done, and it was a big problem for me, I was talking to the wrong people, but they wanted some big moonshot story about how we’re going to take over the world. And we’re going to do it, you know, in the next six months. But at the same time, even though, for after the.com, bust, the new economy had been just people are disabused of that notion.
Frank Felker
It seems as though there’s still an element where the entrepreneur has to present both a real business story and a moonshot potential future. How can the entrepreneur kind of balance and thread the needle between those two extremes to give you a story, Roger, that is exciting and shows a lot of potential but at the same time, it’s believable.
Roger London
So there were a couple of questions in there. One is, everybody thinks that they’re going to be the next Uber or Facebook, which again, clearly can’t be true. But for me personally, I don’t. If someone presents that they are going to be the next moonshot. I become a little more jaded. Because the odds are just that that’s not going to be the case, right. And there’s a lot of investors like me, who have nothing against singles and doubles and triples, we don’t always have to hit home runs or Grand Slams. And especially with the moon shots of the Grand Slams, it’s tougher on the angels, because unless we get a really huge position early, we get crammed down so much in these large deals that, you know, we don’t make so much.
So from an angel’s perspective, and from my perspective, personally, I would rather hear a company talking about you know, getting X number of users and X amount of revenue over a couple of years that is a hockey stick, not necessarily a right angle, right? It doesn’t have to be that straight shot up and and if they’re building a unicorn, it seems like the trend of the common thread of those unicorns is that they have to have an incredible ramp of users and adoption. So in lieu of revenue and profits, there is value in an incredible usage and stickiness. So if the hockey stick, is in usage and stickiness Those are things that become monetizable. Maybe not in the form of revenue, but in the form of an acquisition.
Roger London
So, you know, since I always look for the revenue, I just don’t understand the usage and stickiness as well as others might. But that that has a value that that has a value. You know,
Frank Felker
it sounds like this may well tie back to the earlier question or points about the different investors look for different types of deals.
Roger London
Absolutely. And I’m, you know, I’m a very East Coast investor. And New York and Boston, they, excuse me, they have there’s a lot of those that have more West Coast, mentalities as well. So I’m a, I’m more of an old school, East Coast investor. So I, I like deals that are de risked. And I like deals, I’m not looking for the Grand Slam, I’m looking for singles and doubles, doubles, and triples. But there are the investors that are, you know, that are looking for those moonshots. And, you know, that’s the, that’s, that’s one of the differences with me and them.
Frank Felker
That’s great. Thank you for that. I think, for me, it would have been, that would have been a very beneficial thing to have known 15 years ago for me, but it’s too late for me. But maybe that’s somebody listening today. So we could just talk about this forever. And I really appreciate you sharing your time and your experience with us. But we can’t go on forever, unfortunately. So I want to wrap up with something you talked about at the separate startup presentation that I thought was just so spot on, which had to do with red flags and green lights that you see when you see somebody doing a presentation. For example, a moment ago, you talked about somebody talking about they’re going to be the next Uber that would that would get you a little Ghannouchi.
What Are Some Red Flags That Angel Investors Look Out For?
Frank Felker
What what are some of the top red flags and then some of the best green lights that you look for sure.
Roger London
So, a lot of times, and this is more my maybe more my methodology. But in the initial conversations, you’re looking for reasons not to do a deal. You’re looking for these red flags, because you want to spend more time on the ones that you greenlight and so the quicker you can, can identify that this one has problems that the better. So some of the classics are that you see in the marketing projections that they grow.
Because they get a certain percentage of the marketplace, they get 1% this year and 2%, the next year, and three, or they say all we need to do is get 5% of the marketplace, and it’s a $10 billion, you know, market so so look how big our revenue would be. That, that tells me that they don’t really understand how to acquire customers, that they’re using pure math in a spreadsheet, and they’re guessing at what the percentage of the marketplace is going to be that they interesting. Another would be as if they come up with an unreal, capital raiser valuation, you know, you can’t, you can’t come at me with a valuation, that assumes you’ve already had the investment.
So they say, Well, if we, you know, we’ve got a $5 million valuation because with your money, we’ll do this and this and this, and then in two years, we’ll have this much revenue will be worth $5 million. Right? You’re not now, and you don’t have that money now. So what is the value without our money? And, and or they may say, Well, you know, we’re going to do this, and then in six months, we’re going to raise $28 million, you know, for 2% of the company. And so those kind of unreal raises or valuations are huge red flags.
Frank Felker
Makes sense. Now, I have to interrupt, Do you sometimes try to help guide people towards a specific valuation? And I could see where they might think well, that’s a very self-serving thing for them to do of course, they want to buy it at $5 million post money or whatever it is. But is that something that you feel comfortable or feel is appropriate for you to say to the entrepreneur that this is where your evaluation should be?
Roger London
Absolutely and I would say as an angel investor many of us invest with convertible notes so that we don’t have to get into that argument no valuation convertible note is where we, we invest and it’s it’s a an investment where they’ll likely raise another round of capital after us and it’s likely a capital like a series A where there would be evaluation. And so we’ll, we’ll agree that the our stock will be valued at the next round valuation with some discount. So that gave us our our risk. That’s
Frank Felker
Great. And then you’re literally letting the market decide what the valuation is.
Roger London
And we don’t have to argue about it now. Some other red flags that come to mind are that the use of proceeds goes to a lot of salaries. And, you know, this suggests that they don’t have much skin in the game, you know, we always ask how much money how much cash have they put in, if they say we’ve, you know, we’ve deferred salary of $150,000, over the past two years, what hell, I’ve deferred salary on millions of dollars.
But you can’t count that, that’s called equity. Right. But it’s called sweat equity. There are a lot of companies, another red flag is that they have a low build to buzz ratio, we there Entrepreneur of the Year, and their incubator company of the year, and they got this award, and I got that award. And it seems like they’re spending all their time going around doing these showcases and, and competitions, they want all these things. But they don’t they don’t get any customers, right, or they don’t raise any capital or Wow.
So I’d much rather have a high bill to buzz ratio than a low build a buzz. And you know, there’s a there’s a lot of red flags are just throwing more out, but that’s the team. The entrepreneurs might be an engineer, and they think that they could be the CEO. And I disagree. Or they, you know, the team that they have is all of their friends or it’s other engineers, and they’ve got no business operators or knows, salespeople, and they don’t have any, any plan to include them anytime in the near future. So that’s also a red flag.
What Are Some Green Lights Angel Investors Look For?
Frank Felker
What we’re just running out of time here, but if you could, what are a couple of green, green flags or green lights that you see?
Roger London
Sure. The primary green light is an absence of red flags. That, and I’d say that their team’s success that people on the management team have done something even like if it’s a CTO, that they’ve built a product that has raised money before and has gone to market and has done well, even though they didn’t do the sales of that they built something that the market loved. So teams successes in sales, in development in operations.
And then market confirmation. Entrepreneurs frequently build in a silo and they don’t have any input as to whether the market will like what they’re building. So if they build an MVP, a minimum viable product, and they build it with customer feedback, and then they go back and they modify that MVP, that kind of loop provides me a lot of comfort that they’re building something that the market is requesting and not something that they think the market wants. That’s great.
Frank Felker
Yeah, it nothing like validation by actual customers. Yeah, I want this. I like this. I will pay for this. That’s what it’s all about. Yeah. Right. Who would have thought of it? Yeah. Well, Roger, I thank you so much for taking the time to talk to us and share your experience with us here today on Radio Free Enterprise.
Roger London
I enjoyed it. Thank you for having me.
