I recently attended a great Roundtable hosted by the Imperial College Private Equity Club. Panelists were asked questions ranging from “what has been your worst investment” to “would you put money into my biotech company?” The 100+ attendees received plenty of useful insights and hopefully a few walked away with funding.
An interesting comment came from Michael Blakey when he mentioned that over his 10 years of angel investing, not one person had ever asked him for references. This insight came after Michael suggested entrepreneurs should perform just as much due diligence as angels undertake on them.
This made me consider an interesting fundraising question: Who is the perfect angel investor? What should they bring to the table? Contacts? Experience? Insights? Capital? And in what combination?
A NY Times article hit on one trait previously missing from most “perfect angel” checklists – EXPOSURE. I assume exposure is not commonly discussed because the vast majority of angel investor lacks this benefit. A typical angel is middle-aged, wealthy, married, and quite possibly retired. The majority don’t blog or understand Twitter. None I know of can immediately increase a startup’s exposure.
Except for Ashton Kutcher.
With so many billion dollar valuations based largely on network effects, isn’t exposure a critical success factor for most startups? Ashton’s impact reminds me of Oprah’s Favorite Things show, which instantly catapults local mom-and-pop shops to dramatic success. It’s in essence free marketing for a company that would normally find market penetration extremely difficult and costly.
So, is Ashton Kutcher the perfect angel? Of course this depends on a few key factors, but for a strong management team operating in the online or B2C space, I think Ashton’s ability to promote a company and seemingly keen business sense could quite possibly make him the perfect angel investor.
Do you agree?
Photo via Joe Corrigan/Getty Images for AOL from the New York Times
If I had to choose one and only one lesson from Strategic Marketing, it would be: “leverage other entity’s equity”. Although in Finance it may sound like “get debt backed by other’s money”, in Marketing it just means “take advantage of other’s exposure”.