Frequently they have been coached in the same school of investee company mentoring. There seems to be a fashion currently for starting with the problem the company has set out to solve, before telling you that this company is the first to solve it, with the most innovative solution, never before available to a world where demand for it is demonstrably extensive. Consequently the pitches all seem to promise the same thing, whatever the sector.
So how do you judge them? Do you look at the team and decide which ones you like best, trust most, and believe will succeed? Do you wait for the financial projections and rank them according to the promised revenues, profit and value growth? Or do you try and assess the technology and the nature of the innovation? Or perhaps you focus on the market and its interest in the new company’s invention. Or a combination of all the above?
Last week, Green Angel Syndicate held its second pitch event in London. You are welcome to witness it for yourself, if you care to visit Intelligent Crowd and register. You will find there were four interesting and exciting pitches, from four widely contrasting companies. Green Angel Syndicate has the advantage of specialist knowledge, which means that all four have been scrutinised to a depth not commonly expected at a pitch event of this nature. But that still leaves you wondering how to judge between the different companies.
Watch the final sessions, called “Verdict”, and you will see how the members of the syndicate attending on the night answer these questions. You will hear their comments on the pitches.
What strikes you about them? It is not their consensus or unanimity. Rather the reverse. For every opinion expressed, there is a different framework of judgment. Even when two or more members agree on their preference, they rarely choose the same basis for judgment.
Does this mean they are all inexperienced? Or that angel investment is a random process, without any science? There is little or nothing in the literature of angel investment to suggest that a scientific approach will yield a better result than a more idiosyncratic approach. But on the other hand, it is also clear that there is one particular feature all angels would do well to consider before deciding where to invest their money. How does the company expect them to exit?
This was the subject of an excellent Young Company Finance conference held in Edinburgh shortly after the Green Angel Syndicate pitch event, and the two could not have come together in a more timely fashion. Is it a question you can answer about your own angel investments? If not, feel free to contact Green Angel Syndicate or Young Company Finance to discover more.