“The right people and the right idea” – you may be surprised to learn that these are key elements that angel investors look for in a scale up.
I chatted to Jackie Waring this week. She’s the founder and CEO of Investing Women, a serial entrepreneur in her own right who now champions women-led businesses. If anyone knows how to prepare your company for investment, she does, but the flexibility of her approach surprised me.
“We start conversations at a very early stage,” she told me. “Often businesses can’t afford to employ people, so we try to connect them with the right advisors. Having people from the industry who are genuinely part of the team, perhaps in a mentoring capacity, mitigates the risk for investors. It can also really speed up the route to market – and often these mentors end up making more commitment, as a non-exec director or as an advisor.”
Obviously Jackie speaks companies with a business model that allows for the type of scale that appeals to investors, but angel investors in particular are very interested in the company’s people.
“I think as a board of all women, we’re very tuned in to the type of entrepreneur we see in front of us,” she said. “A red flag goes up if they’re not willing to listen!”
She places a high value on “coachability” – an openness to advice and a willingness to seek feedback.
“The best entrepreneurs are clear on their strengths and admit where the gaps are, even to their potential investors,” she said. “They shouldn’t feel pressured to know everything, because no one does!”
She talks about ‘patient capital’, particularly in industries like biotech, where the time to take a product to market can be very long. The right mentors or advisors can advise on licensing technology, for example, to shorten the time it takes to generate revenue and mitigate the risk for investors.
“We provide training called a Day with the Angels, where we address everything to get the company investment-ready, because it’s in everyone’s interests for them to be prepared at the pitch,” she added.
One company which has benefited from Investing Women’s expertise and backing is Scottish Bioenergy. The company has just received over £500,000 of investment – look out for the story in a future column.