Need cash? Follow these investor tips (Sand Hill Angels)
A panel of investors gave advice Thursday to dozens of local entrepreneurs at
theFundingPost Phoenix Investor Roundtable at Grand Canyon University, presented
by Grow Southwest and Black Dog Promotions.
David Koehn, an angel investor and member of Sand Hill Angels in Palo Alto,
California, said he’s looking for “transparent, high-integrity” entrepreneurs, because
fundamentally he’s investing in people.
“I want to invest in people I can invite to dinner with my family,” Koehn said. “I want to
form relationships with the entrepreneur.”
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A panel of angel and venture capital investors answer questions from entrepreneurs… more
Most investors on the panel agreed personality is important when deciding whom to
invest in.
Peter Weiss, a corporate finance consultant and president at American Outlook Inc. in
Seattle, said raising capital is not about the entrepreneur, it’s about the investor.
“It’s selling and it’s not about your brilliance. It’s not about the best product, it’s about
who knows how to sell,” Weiss said. “The magic formula is a willing buyer and a
willing seller.”
More than anything, an entrepreneur needs to know their business inside and out,
because an investor can tell if they don’t, said Nate Mortensen, Scottsdalebased Tallwave Capital’s newly hired principal.
“What piques our interest is, does the entrepreneur know his stuff?” Mortensen said.
In Arizona, 130 deals during the past year raised significant angel investment. Of
those, only 10 percent went on to a Series A round of funding, Mortensen said.
“When it comes to what can kill a deal: perpetual fundraising and perpetual
convertible notes,” he said. “Know what you’re doing before you propose anything.”
It’s all about honing your pitch. More than 40 entrepreneurs were given just one
minute to pitch to the investors at Thursday’s event, so their idea needed to come
across fast, but clearly.
“The more you can become truly excellent at your pitch, the better," Koehn said.
Ray Chan, founder of K5 Venture Partners in Orange County, California, said it
always works best when entrepreneurs speak from the heart. An investor can tell if
they aren't, he said.
When an entrepreneur is seeking money, the investors suggest being out in the
community as much as possible, meeting people and making connections through
others.
“Be out there, be visible and talk to people you haven’t talked to before,” Weiss said.
“You have one chance to make a good first impression. Comb your hair, shave, shine
your shoes and be nice. Everything is an opportunity.”
Ben Dahl, a partner with Pelion Venture Partners in Salt Lake City, said pitching to a
wide community is best. Most likely, investors will call each other after they hear a
pitch to get advice and see if they’ve heard the same pitch.
What type of team are investors ideally looking for?
Vadim Tarasov, venture partner at Menlo Park, California-based Bright Capital, said
he wants a team with a technical person and a sales person.
“I’m looking for a hacker and a hustler, but one leader is best,” Koehn said.