The Value-Added Investor

Below is the “Tip of the Week” transcript from the Podcast Episode 30: The Dark Side of VC- Predatory Investor Practices (Joanne Wilson):

Joanne mentioned this point about creating a Google Group for all of the entreprenuers that she has invested in.  And this group has evolved into a nation-wide, collaborative atmosphere for it’s constituents.  In previous episodes, we’ve talked about the benefits of accelerator and incubator communities, but we haven’t addressed the offline, unformalized embodiments of incubators.  As much as an investor can help a startup, other founders, maybe even moreso, can benefit from a community of like-minded driven, individuals.  When I think of an investor’s post-investment, contribution to a startup, I don’t think of an investor as the difference between success and failure, but I do see three areas where they contribute:
  1. Speed:  Speed in accessing additional capital, customers or partners
  2. Cost:  Identifying suppliers, service providers and capital contributers at a competitive fair rate
  3. Support:  Coaching, mentoring and listening throughout the many challenges that founders face

And as I think of these three areas and Joanne’s approach, not only does she help as an investor, but she’s created a powerful, crowd-sourced community to do it as well.  And, I would argue, that a strong community of entrepreneurs, such as her’s, will probably help each other moreso than any investor.

We discussed this notion of the portfolio many times, where the best of angels will have a target to invest in 10, 20 or 30 companies.  We all won’t have 70 significant investments, like Joanne.  But we can aspire to create a portfolio, help our entrepreneurs, and empower them to help each other.