The Six Archetypes of Angel Investors

The Six Archetypes of

Startup Investors

@joshmaher | #StartupWealth

Startup Investors

Momentum Value Alternative

Visionary

Virality Business

Impact

Niche

Financial


Startup Investors Momentum

Visionary

“…This idea of vision investing versus metrics investing, if you’re really more comfortable with metrics investing then don’t do angel investing. The early stage really isn’t going to be good for you and you’re going to be driving the entrepreneurs for all the wrong reasons. They don’t have metrics until they’re well into their business. A pure metrics investor should try to participate more in A rounds, or something like that, or syndicate behind people that are vision investors.” – Bob Bozeman



Visionary

Attribute DifferentiatorsBusiness Has a predefined disposition about a

particular industry, technology, or market

Model Focuses on potential value over existing model/economics

Team Focuses on expertise and tenacity

Process Investment pace feels right

Sources Network, Portfolio, No formal groups, expertise or unique access

Terms Flexible – Entrepreneur friendly

Value-add

Capital, leadership, strategy


Virality


“You need the ability to put more money behind your winners. If you don't have the money to put a little more bit behind the three, four, five best things in your portfolio, you shouldn't be an angel investor.”@msuster

“Lean in on the winners. Angels rarely use pro rata.”@gilpenchina


Virality

Attribute DifferentiatorsBusiness Understands market trends and shifts

Model Focuses on potential value over existing model/economics

Team Focuses on expertise and tenacityProcess Investment pace feels rightSources Formal/Informal angel groups, network,

expertise or unique access

Terms Entrepreneur friendlyValue-add

Strategy, Leadership, Capital, Customer, operations



Financial

Startup Investors Value

“Bridge financing. True honest to God bridge financings. Bridge financings that are truly bridges. In other words, you’re building something that is going to get to the other shore. As opposed to what most so-called early-stage bridge financings are. They aren't bridges. They're piers. You're going to end up swimming. Those should never be debt. Those should be equity. Suck it up. Management team, you made some mistakes and you're out of money and you can't do a fully-priced equity round. Gee. Too bad. You shouldn't have screwed up.” – Peter Weiss


Financial


Attribute DifferentiatorsBusiness Deep business fundamentals

Model Heavy focus on micro/macro economics

Team Focus on scalable entrepreneursProcess Fixed allocation, avoid obvious past mistakesSources Formal/informal angel groups, network,

unique access

Terms Investor protectionValue-add

Wasn’t the capital enough?


Business


“… I really thought I shouldn't do it, but the lead investor made several calls to me and said, ‘this is a really good deal.’ I went against my gut on it. I made note of that, just because I wanted to know when I put in the money, ‘What was I thinking?!’ Then I can check back and see whether it was a good move. It turned out to be a terrible move. I lost all the money on that deal. I could have stopped my losses there. That one was pretty clear. Those are the ones that popped in my head as to what happened.” – Andy Liu


Business


Attribute DifferentiatorsBusiness Deep business fundamentals

Model Heavy focus on micro/macro economics

Team Focus on scalable entrepreneursProcess Keeps meticulous records and learns from

mistakesSources Formal/informal angel groups, network,

unique access

Terms Investor/Entrepreneur partnershipValue-add

Product, Operations, People, Customer, Capital


Impact

Startup Investors Alternative

“Every angel investor wants to make money, but some of them also want to make a difference. That difference is the impact. The kind of impact people want to make is very personal. For me, it is supporting innovative technology and business models that will lead to long-term sustainability. – David Bangs


Impact

Attribute Differentiators

Business Triple bottom line for specific areas of impact to society

Model Economics must inherently include desired impact

Team Does the team match the business impact mission

Process Track impact, focus on highest impact

Sources Formal angel groups, network

Terms Investor/Entrepreneur partnership

Value-add

Capital, Strategy



Niche


“I don't know that I can say we were one of the first, but we were certainly very early on in terms of deploying our funds on AngelList. Instead of just taking our $500,000 fund and investing it in $25,000 chunks in a number of companies, we also took a portion of our portfolio and decided to allocate that to investing directly in companies on AngelList. “– Nicholas Wyman



NicheAttribute Differentiators

Business • Focused on industry/market (e.g. oil/gas tech or FinTech for capital markets)

• Or diverse business focus + niche capital allocation strategy

Model varies

Team Execution

Process Keeps meticulous records and learns from mistakes

Sources Sought as experts, online platforms

Terms Investor/Entrepreneur partnership

Value-add

Capital, Customers, Partners, Acquirers


Where to find me?

Follow me on twitter -> @joshmaher

<-- Buy my book @ startupwealth.com “This should be required reading for all new angel

investors. Josh captures the nuances that experienced investors only learn from decades of investing.” –Randy

Williams, Founder & CEO Keiretsu Forum, The World’s Largest Angel Investor Network

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The Six Archetypes of Angel Investors