Know Your Ecosystem: Josh Maher On Connecting with Angel Investors

David Moyer

David Moyer covers emerging technology and ethics. A freelance journalist, he has worked for several clients in a writing and consulting capacity. He graduated from the University of North Texas with degrees in Political Science and Religious Studies. In his spare time he enjoys reading, coffee, and passionate debate.

Know Your Ecosystem: Josh Maher On Connecting with Angel Investors

One of the most exciting aspects of the current entrepreneurial ecosystem is the opportunity to showcase your product or service at an event. Just a decade ago, there were few options in terms of events geared toward showcasing startup offerings, and finding a way to showcase your product was a real challenge. Today, so many different events exist that it can be hard for a startup to know which events will best allow them to showcase their product and connect with angel investors.

Josh Maher has some great advice for startups trying to navigate this issue. An angel investor, Maher founded TechCafe in Seattle, and has advised several startups.

(Note: TechCafe’s site seems to have been taken down.)

Says Maher, “There’s a lot of events that people in startups get attracted to.” Many of these events tend to by meet-ups that are tech focused or industry specific. While these types of events can offer some good networking connections, Maher says they aren’t necessarily the best way for startups to find angel investors.

If you do want to  make that connection, Maher says the first step is to look for larger events. Local industry magazines and business journals frequently cover these events and are a good resource for finding them. Larger events tend to draw a broader swath of the entrepreneurial ecosystem, offering the opportunity to forge a wider range of connections.

Beyond this, Maher says that startups should seek out events that are specifically investor focused. The Seattle Angel Conference and similar events in other cities offer startups the chance to directly interact with angel investors. Says Maher, “If you were to show up at that, you would end up meeting 50 to 100 angel investors who are looking for someone to invest in.” While the topics discussed at angel investor events are not necessarily intended to draw in startups, “when you’re looking for an investor, you’re trying to find a topic that attracts the investor so you can go and meet them.”

If you’re looking for investor focused events online, Maher says to look for keywords like “early-stage and angel investing.  You can really look for those key things.” Events like this tend to be most common in areas with a large startup community and won’t necessarily be in all areas. “If you can’t find an investor focused event in your area, the key thing to do when you show up to a pitch event would be to try to connect with the person who is putting on the event.”  These people can be a great resource for connecting with investors, since they are usually already well connected to the people coming to their events.

It’s also important to know how to talk to a potential investor. Personal introductions and connections are crucial. “If I’m not introduced to them through someone I trust, I tend to turn most of those down or point them to an angel investment group.”  Maher says he prefers taking a meeting to just getting an email, and that as an angel investor, he has “a hard time with just the cold e-mail.” While meetings represent a longer time commitment then an email, “entrepreneurs who are respectful of time and can deliver their message, tell me their value, and tell me where they’re at, what the next step is” earn a lot of points.  “It shows me that they are a person who can do that with other investors, with customers. It really starts to demonstrate some of those skills.”

Another key skill for attracting angel investors is understanding the relationships between products and potential customers. A seemingly obvious part of developing a startup is figuring out how to get your product to customers with a reasonable economic model. Says Maher, “A lot of people, for whatever reason, they still miss that.”  Just understanding, “how they’re developing their product in relationship to what their customers might need adds so much credibility to that companies ability to scale well, and scale quickly.”  Maher says this is a great indicator of a startup’s future success.

Lastly, when meeting an angel investor in person at an event, figuring out how to start a conversation can be a challenge. Says Maher, “starting with doing a little homework isn’t too tough. Learning a little bit about what the angel investor has founded in the past, learning what they are currently involved in,” can give you an icebreaker that you can tie back to yourself. A conversation that initially focuses on the investor as opposed to your startup “gives me the impression that you’re interested in my expertise as opposed to just an investment. People in general are more willing to give their time if they think that what they’re going to say and what they’re going to hear back from the person they’re conversing with has some mutual benefit.”

If you’re at an event that is investor focused, investors know they are going to be getting pitches. Sometimes a “cold pitch” is the only opportunity you might have. In situations like this, “the most important element is time focus,” says Maher. “If a company came up to me cold and managed to tell me about themselves in five minutes, I’d be happy.” Spending 15 or 20 minutes on a cold pitch is more likely to turn off an angel investor instead of attracting them.

It’s important for startups to remember that “angel investors aren’t a bank.” They are people, and so relationships, respect, and communication are essential.

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