Last evening was practice time for 1SS pitches in advance of the formal end-of-semester demo day this Thursday.  Overall the students produced some great work under the tutelage of their expert faculty and in spite of sometimes confusing advice from mentors like myself.   It is hard enough to create a startup when you can give it full-time focus, but for primarily undergrad CS and engineering majors under intense curriculum pressure the challenge is far greater.   Several of the teams are adhering to the revered college student “just-in-time” concept.  They’ll be completing their presentations between last night and tomorrow’s deadline for submission.   Why start too early and allow the work to expand to fill all your available time?

For this post I thought I’d offer a few comments on “style points” that were brought up in the flow of practice sessions last night.  These comments are relevant to anyone pitching a company concept or even pitching for a sale.   In this case the format is the very common method of one or two presenters backed up by PowerPoint slides.  Here’s a list:

1.   You’re a great writer, can speak the King’s English, and have a good delivery, so don’t slip into glaring grammatical errors like “me and Hank are programming this widget.”  The listener will be thrown off track by that and not hear the next few sentences.  That type of talk is okay if you’ve just won the big game and are being interviewed on ESPN, but it does more damage than you realize when you are selling yourself as a smart person who can create a company.  

2.  Look for typos in your slides.   I will admit that I am surprised by the number of typos that I leave in TechDrawl posts and in various emails and sometimes even in Tweets or on Facebook.  It’s a consequence of volume of output, auto-completes, and tiny mobile keyboards.  I fix the ones I find later in places where I can edit, but lots of them are just out there for all eternity.  My 7^th grade English teach Ms. Perry would be disappointed.   At least, however, if your PowerPoint slides have the desired economy of words, you should check and recheck for misspellings.

3.   I am no graphics designer, but it makes a world of difference if your presentation slides have a consistent master theme throughout and look like they all came from the same hand.  They need to be readable from the back row and to communicate elements that coincide with your narrative.  The more visuals the better, but be sparing in the use of two many bold graphics like arrows that may not actually represent anything.  And, I personally think it’s best to avoid any of the transitions and that for certain one should never mix transition styles in a single show.   It’s tempting to pull cool effects from the PowerPoint toolbars, but time is better spent on getting the content right.

4.   Use the PowerPoint guides and make sure your slide headings don’t “jump around” as you advance from one slide to the next.  All should be on exactly the same level and have the same font.   They may look fine when you check them individually, but it things wander around the screen during a live presentation, such movement will detract from your message.  Fonts of inconsistent sizes anywhere in your slides create the same issue.

5.  You almost can’t have too many slides.  If you are talking for more than 30 seconds over one slide, you are giving a soliloquy and not narrating a show.  Use that time to provide visual backup for your words.

6.  Always try to put your idea in context.  My biggest complaint about presentation formats that are too short is that you can’t show and discuss the desirable 2X2 grid where your idea is in the upper right quadrant.   Odds are that your audience won’t know your space all that well, and you owe it to them to show the competitors and illustrate how you match up with them.   If nothing else, that helps prove you have a “space” and that you are not out on a limb alone.

7.  One of my favorite speaking styles has been to put all my points and some jokes on index cards, have them shuffled by someone in the audience, and then deliver them in whatever order results from that.  However, I save that shtick for occasions where I’m supposed to provide some entertainment and am not trying to close a deal.  Your presentation should have a logical flow that defines a pain point, how you’re going to cure that, and why that it is a business.  You need to build to a climax that leaves your audience convinced and wanting to have a follow-up discussion with you.

8.   As to speaking styles, not everyone has the gift to be a fire and brimstone preacher.  You have to work with what is natural for you, make eye contact, and carry on an engaging conversation with your audience.   Asking a few qualifying questions never hurts, and standing out front away for a podium is a good way to command a room.   Although not applicable in these demo day formats, you will find that in live situations you won’t get very far without being interrupted by questions.  If you’ve created some engagement, these will be much easier to handle.   I saw one presentation recently where an audience member said (constructively):  “You’ll win the Nobel Prize if you can make that business model work.”   The presenter handled that with a good explanation and a reminder of his credentials.  It did, however, make me want to have a Nobel Prize visual somewhere in my next slide deck in case I ever get that question myself.  “See, here’s what I won!”

A few dozen students will finish today’s classes and quizzes and be up all night polishing up their demo day presentations, and I’m sure the results will be great on Thursday.  Hopefully they’ll all have fewer typos that I’m sure I have left somewhere in this post.

If you’re a college football fan who is following the BCS rankings, you’ve heard the term “style points” quite a lot in recent big games involving LSU or Bama.  Hence the illustration you see above.

<Image from Fox Sports>

Apart from all the personal blessings we recount at this time of year, I thought it might be good on this day to take note of the blessings related to being a technology entrepreneur.  Here are some of the things for which I am particularly grateful:

… those many of you who call me, Tweet me, ReTweet me, message me on Facebook, or email me with comments, questions, criticisms, and kind words about TechDrawl content.  It’s gratifying to know that people are reading and responding to what I write.

… the prospective investors, partners, and customers who have respond with a quick yes, or even a quick no.  Either is preferable to remaining in limbo.

… any day that passes when I don’t have to reboot at least one of my many workflow devices, including the cable box, modem, router, phones, camera, iPad, MacBook, or even the iRon (small joke there), or update a handful of apps, or download and restart to install software, OS, and firmware fixes.  Heck, even my Dodge Ram Hemi required a software update during its first scheduled service.

… the fascinating complexity of many of the aforementioned gadgets, normally accompanied by a UI or a full-auto setting that keeps that complexity hidden unless you have a personal interest in it.  I’ve noticed, for example, that the print books on the shelves at B&N that explain all the features of the newer digital cameras are generally bigger than the cameras themselves.

… the circularity of the universe of computing.  I was musing last week with someone who shares my advanced youth about the fact that computing power went from time shared access to a remote mainframe to fully distributed desktops and is now right back in the Cloud.  Instead of a 75-pound Teletype for access we have 1-pound pocket-able smart phones. 

…  the year of the pivot.   I have since my early career always noted that every one of my startups (excluding banks) ended up in somewhat different businesses than originally envisioned.  Peachtree Software grew out of a retail computer store and was made possible a bit later by the proliferation of Microsoft BASIC and CP/M standards, the former enabled by a contract abrogation when MITS (Altair) was sold and lost its exclusive on that all-important programming language.    Pivot became the term of 2011 as so many lean startups were able to fatten up by redirecting their energies or combining with others in a sea of incalculable competitors.

… role models.  I’m in the midst of reading the Steve Jobs biography, and I had the pleasure last week of hearing Michael Dell in a small setting in connection with the 1SS class at the University of Texas.  Their life trajectories could hardly have been more different, but they both just show how much impact one smart, determined person can have even in a complex, competitive, and fast changing technology world.

… resources for tech entrepreneurs.   Having started in an era when there were none, and I mean none, it’s amazing to see the attention being given to this by universities, angel groups, VC’s, incubators, and more.   We’ve gone from 100% OJT to plenty of help, thanks in large measure to successful entrepreneurs who have chosen to deploy some of their wealth and talent back into the arenas which rewarded them.

… big insurance companies.   I have made changes in health plans and life plans this year, and dealing with big insurance companies makes me realize that a large part of corporate America is still trying to function on 70’s era computing.  There’s still plenty of straightforward IT opportunity out there, remarkably so in anything related to health care and/or muddled by government interference.

… college football.  If anything has more ups and downs than the tech industry, college football can claim that title.  This has been a particularly interesting season with so many thrilling games and major upsets as the season draws to a close.  At least my two favorites GT and UT are faring better this year than last.  This has nothing to do with the technology topic, but what would Thanksgiving be without football?

<photo from Harvard Sports Analysis Collective attributed to Baltimore Sun, yes it’s the Thanksgiving pro game, not college>

Some months ago when I arrived in Austin I wrote about the importance of the Formula 1 venue to this city.  The Circuit of the Americas (COTA) was then commencing construction on a massive facility to accommodate F1, MotoGP, and V8 Supercar races.  And, its buildings and spectator areas could be easily adapted for all manner of other large gatherings as well.  Now comes word that the contract for the F1 race was held by promoter Tavo Hellmund and not by the principal backers Bobby Epstein and Red McCombs.  This group now appears not to be in synch.  F1 supreme chief Bernie Ecclestone reportedly has cancelled the contract, although there is some chance of reconciliation before the 2012 schedule is set on December 7.   Meanwhile, plans for a street race across the Hudson from NYC in 2013 and consideration of a race in Mexico City have created new competition for COTA.  Recall that this sport petered out in Indianapolis in 2007 after an 8 year run, all but one attended by yours truly, so there is some reason to doubt it marketability in North America beyond the well established annual date at Montreal.

Pivot is an overused word in the startup world, but Circuit of the Americas is facing this problem in spades.  From the picture above you can see the massive amount of earth moving that has already taken place, and that work is a feature landmark when you have a window seat headed east out of ABIA.  The major building construction has yet to commence, so if you had to make the call on this project, what would you do from here?  There’s no other racing circuit than can draw enough fans to justify completion of the track – NASCAR has a home in Fort Worth and IndyCar is teetering.  Do you leave the dirt where it is and have it serve as a perpetual reminder of this misadventure?  Do you sculpt it into some sort of iconic art, like a cowboy hat, and make it part of Texas legend?

At any rate, one nice thing about working in tech startups is that your creation doesn’t become a permanent part of the landscape.   I’m working with some companies that have pivoted multiple times from the PPT stage, where no real money has been spent and no backtracking is required.   Several others on my plate are being redirected by serendipitous opportunities and are adapting quickly to those.

Often there comes the point where one has to accept the fact that the original concept just is not going to work as planned.   You will be lucky if you determine that early enough to avoid getting yourself chained to a zombie company that has just enough customers to keep you from shutting down but not enough to offer you an exit.  What else then can you do?  If you have some cash on hand from a big financing round, perhaps you can buy something that is undercapitalized but is working.  If you have no cash, perhaps you can find someone in a similar business to buy what you have and create some scale.

If you’re stymied by lack of financing but still believe in your concept and yourself, what then?  My recent post “We Are What We Can Finance” dealt with that topic.   The Valley investors are particularly adept at supporting entrepreneurs by matchmaking faltering startups with others that can use the customers, the IP, or the team.   They are blessed with so many deals in their collective geographically compact networks that the odds of matchmaking success are much greater than anywhere else in the country.

One undergraduate student in the 1SS class asked a VC presenter a good question:  “What happens if you just shut down?”  Usually at an early stage that means just stopping, divvying up what’s left to creditors, if you have any, selling your Aeron chairs on eBay (sorry that’s a 90’s joke) and telling your investors they have a write-off.   The legal costs of any formal dissolution, bankruptcy, etc. generally far outweigh any recovery to be made, so startups just quietly become shutdowns.   Their entrepreneurs gain something from the experience, and in the leading tech communities generally get to play the game again.  I had one person tell me he favors investing in people who have some failures under their belt and have shown how they deal with adversity. 

I suppose COTA will not be in the category of just quietly going away.  All those millions of yards of dirt can’t be allowed to sit there and erode.   And, there’s a lot of money at stake and a fair amount of civic pride as well.   Here’s hoping there will be some positive resolution before December 7.  Maybe you have an idea to submit…

<photo from COTA>

A number of early stage presentations I’ve seen personally or read about lately have included companies reinventing a concept that is currently in the market and may have already succeeded or failed.  This problem is particularly acute with respect to apps.   Perhaps there are a million already available, but no one knows how many tens of thousands more are teed up for release next month.  You can Google and search CrunchBase or Angel List all you wish, find nothing comparable to your idea, and then still be surprised as you watch someone else birth your baby.

Many times on first viewing these pitches look vaguely familiar to me, but it often takes some digging to recall where I’ve previously “seen this movie.”  I frequently get queries from investors asking if I recognize a particular company or idea, and I make similar queries to my network.  Everyone wants to show a slide where your company is in the upper right quadrant of your competitive matrix, but just getting a grasp on who belongs in the matrix is no longer easy.    

Identifying competitors involves not only finding the ones that have similar technology underpinnings and market targets but also recognizing potential threats from entirely different solutions that could substitute for your use case.   I can call you, send you an email, Tweet you, message you on Facebook, mail you a letter, text you, or connect with you via a host of other social services.   All of these can be applied to marketing, forming groups, self-promotion, sharing humor, keeping up with the family, etc.  

Putting any new deal in its real context is becoming an ever more difficult challenge.  Gone are the days when we had one or two readily identifiable enemies and could take some comfort in lengthy gestation periods for new foes.   Now it’s like the old game Space Invaders but played from all directions and in multiple dimensions.   So how in this context do you de-risk your investment in new idea?  Following are a few suggestions:

1.   Look for an entrepreneur with deep knowledge in highly focused area.   Commercializing university research where the investigator knows his or her field and who are the players is one example of this.   You may find a bona fide new technology that can solve a big problem, and you may get lucky with some patent filings to go along with that.

2.   As an investor, choose the areas where you can get comfortable with the market positioning of an idea.  If you develop your own deep domain knowledge in a finite number of sectors, that knowledge will serve you well.   If you read about all 10 newly funded deals in TechCrunch every day and try to figure out where they all fit, you own circuits will be overloaded, and you can’t hire enough analysts to cover all the bases.

3.  Don’t sit there; get on the road.  Go to pitch sessions, incubators, university licensing offices, investor gatherings, opinion leaders, and other sources of deal flow in the cities where big things are happening.   You can gain real perspective, get to know the people doing the deals and what they are thinking about next, and basically get some color behind all the funding announcements that flood your screen daily.   You may want to put your dollars to work close to home, which is fine, but you better have more than a passing acquaintance with the important deals that are getting done in the Valley and NYC, for example. 

4.   When you do find a direct competitor to a proposed project, run it to ground.  Find out what made it succeed or fail and make a judgment as to whether your entrepreneur can do it right this time around.  I’m seeing lots of deals based on ideas from a decade ago that weren’t necessarily bad but were clearly well ahead of their time.  Changes in technology are allowing some of these to be resurrected with a better outcome on the restart.  And, many a company has blown its launch strategy, suffered a painful death, and left a territory open for someone else with better marketing chops to jump into the vacuum.  

5.   You can make all the college football predictions you want, but every weekend there are plenty of surprises.   Yes, as the trite saying goes, that’s why they play the game.   You don’t necessarily have to find a completely unoccupied space to create a winning venture.   You may have a team that can aggressively attack a crowded market and produce a winner.  Many times your competitors have had time to make too many mistakes, are hamstrung by old technology with existing customers, or have grown complacent -- and they are vulnerable.  And their existence has paved the way for you by establishing price points, channels, and buying patterns.

Now I just hope I haven’t written this piece before…

<Wikipedia image from Space Invaders game>

Josh Baer of Capital Factory organized a forum at General Assembly in New York on the evening of November 9 to showcase on Broadway a group of 14 promising startups from Austin.   Yours truly was not able to attend, but Kyle Cox of the ATI reported a packed house in the 4^th floor open workspace area of GA. 

The Austin Chamber’s Susan Davenport announced initiatives including the UT-Austin Medical School, Austin Live (a planned space to be announced at SXSWi), Austin as Texas’ first city participating in Startup America, and a special event in conjunction with Austin City Limits Live to kick off the 2012 SXSWi.  This is all very positive news for Austin’s tech scene.  It was also a strong reminder to make your plans now to attend SXSWi in March.

As an aside, the timing of this event spared the attendees last night’s Republican debate in which several of the candidates seemed to have memory lapses.

Here follows an on-the-scene dispatch from Jesse Dyer, CEO of NightRaft, a presenter, and an occasional stringer for TechDrawl:

General Assembly is a Y Combinator with New York style:  sprawling sofas, group work areas, thought cubes, coconut water and spontaneous collaboration packed into a hip downtown loft.  This was my second visit, and it's every bit as happening here as it was back in July.  The New York scene is vibrant.  

Josh Baer (sartorially splendid in one of his trademark T-shirts as always) corralled a big group of New Yorkers to soak in fourteen 5-minute pitches from Austin's start-ups, headlined by his Capital Factory grads.   The setting was fittingly informal and loosely structured: no keynote speakers, suits, display booths, roaming accountants, lawyers, or press.    A great range of Austin companies presented:  OwnLocal probably is the most established, and I'll be the first to confess my start-up NightRaft is definitely the baby of the group (all listed below). 

I think overall Team Austin made a good impression on a tough crowd.  As you know, New York is not a nurturing place.   In total contrast to the friendly atmosphere but formal confines of the recent Venture Atlanta, the fun setting at General Assembly was filled with a typical no-BS New York crowd.   But, thanks to the free beer on hand, things seemed to lighten up as the evening progressed.   I'm sure the majority of the Austinites who made the trip were happy they did.  Many CEOs were still bending the ears of potential investors long after the last presentation.  

How much New York cash actually makes it down to Austin will be interesting to watch over the coming months.  Given the talent and high level of competitiveness in the big city, I imagine the investors on hand came salivating over the potential to snap up deals on the cheap down South.   But, Austin’s own investors are pretty competitive too.   There's not a Foursquare languishing in Austin due to lack of funding.  There are, however, dozens of great start-ups now that deserve capital and will deliver returns.  For New Yorkers who want to invest in Texas I believe those in the room saw some great opportunities:

•   Storymix Media 

•   Groupcharger  

•   Forecast  

•   RecycleMatch 

•   OwnLocal 

•   Greenling 

•   Volunteerspot

•   Ricochet Labs 

•   Rockify 

•   Apptive 

•   Hoot.me 

•   Umbel 

•   Nightraft 

•   Loku

Editor’s Note:  I recall when in about 2003 the ATDC in Atlanta organized a similar mission to the Valley, which I attended.  The net result was the loss of one company to that area, and no one has been interested in testing that idea again.  That is always a risk with these road shows.  Every early stage NY investor I’ve talked with recently wants startups to be close at hand, and that’s understandable.  But, whether a mission like this results in immediate term sheets, it can have many other benefits.  You never know when someone in the crowd will make a connection between your pitch and a potential customer or partner.  Or, in this case, you may find someone who plans to attend SXSWi and now has you on the RADAR.  And, if you were one of the presenters and worked all your connections in NYC around this event, your time was probably quite productive.

<photo above by Jesse Dyer>

<photo below suggested for this post by Jesse Dyer, “Are You Entertained” scene from Gladiator>

We may or may not be the world, but as entrepreneurs we are surely what we can finance.  That line is one I’ve used often when discussing strategy in the start-up or early stage of a company.  A respected founder who has already punched his or her ticket in a successful Valley-based exit of $100M+ can dream big dreams and will probably have little difficulty raising all the money needed to pursue those dreams.   A first-time entrepreneur in Thomasville, GA, will likely have to bootstrap to profitability and relocate to a money center that is relevant to the chosen business (unless it's a quail hunting innovation).

Last week’s 1SS class featured Kip McClanahan of Silverton Partners answering a series of questions covering the gamut of fundraising.   There was discussion about raising as little money as you can in the beginning and allowing your value to grow as you begin to prove your model.  It’s hard to argue that as a general rule, but I can name many successful ventures that took a different approach.  Raising a whole lot of money can create barriers to entry and sheer marketing force when technology alone isn’t the answer (Groupon), can enable one to quietly roll-up all the valuable pieces of a fragmented market (HomeAway), and can allow one to tackle the hard science of major problems that can’t be solved by a weekend’s work on a minimally viable app (Joulex).

Deciding how much to raise in a seed or A round is never easy.   You don’t want to bet against yourself by taking all you can get prematurely when your valuation is likely to go much higher, but, on the other hand, you don’t want to be constantly fundraising as you find yourself jumping from one “fume” stage to the next (Bob Metcalfe term).   I advised one entrepreneur last week that he was raising too little money to be convincing in his chosen market.   Whether he could get the job done with less was overshadowed by the psychological effect of looking like a serious player.  And, investors often find some comfort in knowing that their money is surrounding by enough in the aggregate to give the business more than a fighting chance.

When I left Peachtree Software just a few decades ago (hurts to say that), I was able to attract to Atlanta Pat Welsh of the famous Welsh, Carson, Anderson & Stowe firm from NYC.   On his first visit I showed him a working prototype of one of the earliest interactive multimedia systems, the beginnings of a strong team, and a plan that was convincing enough.  He admitted at the time that he was surprised by how much we had accomplished, and we got a check.  My timing was good on that deal in two ways:  (1) WCAS started in 1979, invested with me in 1984, and then scaled incredibly fast; their investment in that deal, Comsell, became somewhat of a rounding error and would never have made the cut just a couple of years later.  (2) When the stock market crashed in 1987, we had a ready buyer at hand – Rupert Murdoch’s NewsCorp – and WCAS and our other investors were happy to exit the Comsell deal unscathed.   So, the art of the possible depends on catching investors at the right times in their own lifecycles, as in this example when they have dry powder but not so much that your request is irrelevant.

Austin's S3 Ventures website is up front with the questions:  Why you? Why now?  I would add a third to that:  Why here?  What you can finance is a function of all three.   As noted in many previous posts, there are differences in deals that are of interest to investors in Atlanta, Austin, San Francisco, or any other city you may pick.  Each has its own leanings, and the relative amounts of money available vary dramatically.  At a seed or early stage you generally have to be “here” – wherever that is – before you can expect local investors to respond positively.   Sophisticated investors at this level generally want their money deployed close to home, and you have to get to know people, become part of the fabric, and have your business be physically resident in a city to qualify.  Texas money rarely leaves Texas, except occasionally for California opportunities that help keep Texas investors in the mainstream deal flow.  I’m already involved in one venture that we are relocating from the Deep South to Austin because it is a natural fit for this city in many ways – its particular technology focus and the proximity to strategic partners and high-value-add investors.  If this business were taken to California, it might play out a very different strategy than what is appropriate in Austin.   If it stayed in its place of origin, it would have a very difficult time achieving any of its real potential.

So, if you abide by the “we are what we can finance” theory, you have to take into consideration how marketable you are as an entrepreneur, why this is the right moment for your idea, and where you are going to plant your flag.   And, even with all those aspects carefully considered, you’ve still got to find the right match with an investor group that may be thinking “we are what we invest in” and be asking its own tough questions about whether your deal is optimal for its objectives.

<Image from Coca-Cola's original commercial>

The ATI blog reports today that at its Entrepreneurs’ Workshop last week Central Texas Angel Network founder and chairman Jamie Rhodes commented that for every company started by VC’s, 25 are started by angels.  I am either formally or informally advising a number of companies looking for angel funding right now, and I’ve found there are a lot of misconceptions about angel investors.  Unlike VC’s, where partners get management fees to put money to work and are highly motivated to do so, most angels don’t have to do any such thing.   The make investments only when something strikes their fancy and they choose to play.

In that vein, allow me to suggest some angel categories:

1.  Opportunists:  These are the people who know you (as opposed to people you know) and who may choose to invest when asked because they believe in your capabilities and your honesty.  They are betting on you to do your best to take care of their money and give them some return, and they may or may not even understand the business concept.  They will never appear in any organized investor forum or group, and they represent a shadow market of investors outside identified tech angels.  In Atlanta in particular I have seen many deals done in the past by successful real estate developers with cash to spare, although the downturn in that sector has made that quite a bit more unlikely today.

2.  Strivers:  The most likely angel investors in the opportunistic category are those who are still striving in their financial lives.   A $50K investment in your deal has the potential to “move the needle” for them in terms of some retirement goal or a future splurge.   And, they may well want to learn in the process, particularly if they are in corporate career tracks with little exposure to entrepreneurship.   In other words, don’t ask your $Billionaire friend who owns an NFL franchise for a few thousand bucks – except perhaps for your favorite charity.

3.  Execs with Checks:  Very often you will find an angel investor who has enough capital to buy himself a job by investing in your company and coming on board in a key role.  That can be a good thing, but it’s hard to fill out a round if your appeal doesn’t reach beyond that to true arm’s length investors.

4.  Spectators:  Every angel group has plenty of spectators who enjoy the comradery, the intellectual stimulation, and sometimes even a free lunch.  They will even acknowledge that they are not investing in tech deals.  But, they’re part of the scene and may well be connectors or influencers in your favor.

5.  Family Office Managers:  There are a few family office managers who choose to put some of their portfolios into local “alternative investments.”  They are probably working with family wealth that has entrepreneurial origins and have a soft spot for new ventures.   Unless the wealth was derived from technology, the odds are that they will favor more traditional business deals that don’t require any technical specialization to understand.  

6.  Deal Junkies:  I mean this as a flattering term, and there are individuals who have made good money in the tech sector and who have a genuine interest in seeding new deals, helping entrepreneurs, and keeping score by being part of new wins.  It’s very gratifying to be a very early investor in something that becomes big, not just for the money but for the satisfaction of helping build something of significance.  These angels are active check writers in their areas of comfort, but they are more likely to have some defined criteria and to be very selective.  They’ve learned how to say no to things that fall outside their zone.   And, they are not bashful about asking the tough questions.  They also can be very high value-add investors because they usually invest in areas where they have both expertise and connnections.

7.  Super Angels:  This category either has established a small fund or a strong cohort of co-investors that enable them to play well into Series A round fundings.  They generally invest with considerable discipline and also know how to ask the tough questions.  With today’s much lower startup costs for many types of tech businesses, these are the players who are capturing gains in an area that use to be the exclusive province of VC’s. 

Again, the important thing to remember is that angels choose to invest, and no matter how good your proposition may be, the outcome of that choice is always affected by an angel’s mood and life circumstances at any particular moment in time.  I have been in deals supported by many angel investors over the years, for which I am duly grateful, and I acknowledge that they are critical to venture formation.  It’s important for every entrepreneur to have some feel for the angel landscape.

<image from poster of original TV series>