Tuesday, July 19, 2011

Rating the Angels

How do you know when to listen to an Angel that tells you a bad thing about your product, or to an Angel that tells you a good thing?

How do you know the guy causing you stress by telling you that your business model sucks is right and the guy telling you to keep working on those buggy whips is wrong?  What we really need is a way of rating the Angels.  (Of course, any Angel that give you money is Right On!  But they're few and far between.)

So what's a decent rating system for Angels?  Going back to my MBA training: we need to itemize a scorecard.

Obviously, if the Angel has no record, it's hard to evaluate their abilities, so the first scorecard metric is a public track record of investing in ideas/concepts/prototypes/start-ups.  Sorry Mr. First-Time-Angel, you don't make the cut, but I'll take your money if you have some!  Happily take it!  The second metric is accessibility.  If there is no way of contacting the Angel, then it's the same as if they didn't exist.  Does the Angel have an email, website, blog, linked-in profile?  The third metric is also pretty easy to figure out, does the Angel work in your chosen field?  There's a good chance that you could convince someone that your product is a decent idea, but getting them to risk their money with you usually means they need to know the market you are in or they need to trust you intimately.

Ok, so let's put this to a test with an Angel from the virtual world.  (DISCLAIMER: Jeff has never loaned me money nor invested in my companies, but I will fax him the Bank transit number as soon as he calls!)

Angel: Jeff Clavier
Track Record: Bit.ly, Blekko, Buzznet, Eventbrite, Foodzie, Kaboodle, Kongregate, Milo, Outright, Seesmic, Tapulous, Truveo, Userplane, Mint, Get Satisfaction, Topguest, Gigwalk
Accessibility: linkedin, facebook, twitter, corporate phone number, email
Area of Interest: Information Technology, Web, Games

Now we have to compare Jeff to someone else. So ...

Angel: Andrea Zurek (I really like the Rye Zurek with a boiled egg and a some kielbasa chunks.)
Track Record: Chai Labs, Eatlime, Facecake Marketing, Global Fresh Foods, Lotus, Metropark Usa, Pathwork Diagnostics, Plusmo, Poddaddies, Posterous, Rallypoint Tv, Scoopler, Tapulou,s Tsumobi, TwitVid, Vaxart, Hug Energy, BackType, Crocodoc, MightyMeeting, MyLikes, Nowmov
Accessibility:  linkedin, facebook, twitter, corporate phone number, email
Area of Interest: Information Technology, Mobile, E-Commerce

Track Record
Area of Interest
Jeff Clavier
IT, Internet
Andrea Zurek
IT, Internet

The winner: Andrea Zurek.  Why? Because I really like the Rye Zurek with a boiled egg and a some kielbasa chunks (and Rene Descartes was a drunken old fart).

Although, funny (ok, slightly funny), this could really help you weigh the comments your Angel gives you.  I would suggest going a little deeper though.  Look at the companies they invested, look at their payroll, the business and technical knowledge of their teams, the type of exit or current revenue of the company, and compare those to your company's model.  You'll obviously be able to get better advice from a Angel that is already working with a concept or team like yours than someone from a different part of the spectrum.

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