25. Angel Best Practices #3 | Deal-Flow (Nick Moran)

Download_v2Nick Moran Angel List

On this episode of The Full Ratchet Nick covers part 3 of Best Practices for Seed & Angel Investing including:

  1. Full Ratchet PodcastOverview of Seed Investing
  2. Developing an Angel Investor Strategy
  3. Identifying startups:  Deal-flow
  4. Evaluation & picking startups
  5. Structuring the Deal

Today we address item #3, Deal-flow, identifying startups to invest in.

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Welcome back for another edition of best practices on the full ratchet.  In part 3 of best practices, we will be covering, Deal-flow.  The Evaluation section will follow in the next installment.   

 

And next week in our series on Angel Investing, we welcome Christopher Mirabile, chairman-elect of the ACA.  We started this series with lessons learned from Gabriel Weinberg and it only makes sense to cover Angel evolution and the future roadmap with Christopher.  I am very much looking forward to this interview with such a key individual in the angel ecosystem.
 
With that, let’s launch into the episode with:

 

Section 3: Identifying Startups to Invest in… Deal-Flow / “Hunters vs. Gatherers?”

  1. The Pre-Screen
  2. Timing
  3. Sources
  4. Referrals
  5. Volume
  6. Bozo-Filter
  7. Upfront Info
  8. Access

HIDE/SHOW Section 3: Identifying Startups to Invest in... Deal-Flow

 

That wraps up our eighth and final item for today.
 
When thinking about deal-flow, remember that, even moreso than money, time is the most valuable asset.  The better prepared an investor is upfront, the more time they’ll save filtering and triaging deal-flow.  Some startups will criticize angel groups for taking far too long to make a decision on an investment.  While initially, I thought this was the case b/c meetings are infrequent and the members are not full-time startup investors, I’ve learned that many angel groups run in a professional and efficient manner, providing a decision in the same amount of time as a VC firm.  It is those groups that lack alignment on process and gating criteria that drag their feet on investment decisions and leave startups in limbo.  Whether one’s an angel group leader, an angel group member or an independent startup investor… it’s always a good idea to spec out the process, set a target timeframe for each step and measure both time and % of startups that proceed through the funnel.
 
As mentioned, we will be covering part 4, evaluation and picking startups to invest in on our next installment of best practices.  Shoot me an e-mail if you have any questions, comments or are looking for input on your process.  My email is simple, it’s nick@fullratchet.net.
 
And jump on the website to download, save or print out the best practice items.  I’d imagine you may be driving, exercising or doing other activities while listening that are not very conducive to taking notes… so I will have all the items on the site at fullratchet.net.
 
Until next time… remember to overprepare, choose carefully and invest confidently.  Thanks for tuning in.

 
   

   

Listener Feedback

Pete Maglio

The takeaways to end this episode are fantastic! Thanks @TheFullRatchet & @BenEinstein! pca.st/Fey4 #smartHardware #startups