In the dynamic world of startups and venture capital, understanding the nuances of angel investing is crucial. We sat down with Quinn Robertson, who runs the 412 Angel group in Northwest Arkansas, to delve into the essentials of angel investing. Here’s a detailed look at our conversation, where Quinn shares invaluable insights for prospective investors and entrepreneurs alike.
For individuals interested in angel investing, what are the first steps they should take to get involved?
What I typically tell potential investors is really a couple of things. Go immerse yourself into venture capital worlds. That could be Twitter, news articles, podcasts, etc. Just get in via osmosis for a little while. That’s the best way to start to learn the lingo and get up to speed. Secondly, try to find a group of individuals who are doing this and learn from the smart people around you. This is a team sport. Learn from folks who have done this for a while. Go be a part of a pack before you try to go at it, lone wolf style.
What are the key requirements or qualifications for someone to become an angel investor?
In order to invest in certain opportunities, you must be what the SEC defines as an accredited investor. For everyone else, you can start on various crowdfunding platforms like WeFunder or Republic, and build those angel investing muscles with smaller amounts, like $5-100, before you start to write the $10,000 checks that we all want to invest at some point in the future.
In your experience, what are the best stages of a startup for angel investors to get involved and why?
Really, there’s no right answer, it’s all about preference. I’ll share a few anecdotes I hear often though. If an angel investor is viewing the investment truly as a do-good philanthropic component of their giveback, then the absolute earliest stages where you can craft and mold and help support an entrepreneur at the idea stage is probably the right time to come in because you have a lot of ability to get in and roll up your sleeves. If you’re thinking about this from a capitalistic perspective, most people will start to angel invest after someone has launched a product, maybe they’ve gotten a little bit of early customer revenue and they’re really trying to go from a toddler to a teenager at that point.
How can startup founders effectively engage with angel investors?
The best way to engage with angel investors is to start by going and finding where they all huddle together, like in formal angel groups or something similar. That’s probably the right starting point. Finding your one-off random angel investors will just be a lot more difficult. AngelList is also a way to go and find individual angels that might be out there in the world.
What criteria do you use to evaluate potential startup investments?
First, the team, which comes as no shock to anybody—do they have an insight into the world that no one else has? Do they have the gusto? Are they transparent? Do they understand where their assets are and where liabilities lie? The second thing that I typically look at is the level of validation that they walk in the door with. Basically: Traction, traction, traction.
What are some common pitfalls new angel investors should be aware of?
First and foremost is believing that you can pick a couple of stocks and hit the home runs very consistently. Some angels come in and think that they’re going to find ‘the one.’ When in reality, the best folks that do this professionally in VC’s get it right one out of ten times.
What trends do you see shaping the future of angel investing in the next few years?
I expect to see angels and angel groups across especially the middle of the country and underserved markets sharing companies, investment opportunities, and knowledge amongst angel investor groups and just being more collaborative.
How can people get involved with 412 Angels?
If you think you might have an interest, reach out to me at quinn.robertson@endeavor.org. We send out a newsletter with companies that we find and interact with that need help and support. Part of angel investing is not just writing a check but it’s being supportive. And if you want to write a check then come learn, get yourself a foundational level of knowledge and start to have some fun with it.
Conclusion
Quinn’s comprehensive responses offer a deep dive into the world of angel investing, providing actionable advice for those looking to enter the field and insightful tips for startups seeking angel investment.
About Quinn
Quinn Robertson, a native of Northwest Arkansas, graduated from the University of Arkansas with his Masters in Accountancy and passed the CPA exam. After graduation, he moved to Wichita, KS to work at Koch Industries in various technology and innovation roles. He then joined an entrepreneur support organization in Wichita to run an angel group, where he learned his passion for growing entrepreneur communities and building investor relationships. He’s excited to continue to promote early stage entrepreneurship and capital mobilization with the 412 Angels program!
