As an angel investor and an individual who possesses a serious entrepreneurial streak I sit through atleast 150-200 business pitches in a month. As a fellow entrepreneur I am in awe of all entrepreneurs as they should be complimented and encouraged for having the guts to plunge into what is – the scariest and the most thrilling roller coaster ride of one’s life.
Their energy and belief don’t make it easy for us “angels” investors (who came up with that adjective?) but an entrepreneur should know that it is quite difficult to point out the flaws your business plan and to balance the criticism with an equal amount of positivity and encouragement so as to ensure that the entrepreneur is motivated to go back to the drawing board instead of jumping off a cliff (metaphorically!)
What I find particularly unnerving and confusing is how to deal with an entrepreneur once you have entrusted him/her with your hard earned money? You have placed your trust in the team and the idea but are you planting the seed in a greenhouse, where it requires your care and attention (and a pep talk)? Or in the forest where it has to fend for itself?
On the one you have a school of thought that suggests that angel investors take an activist role in the running of the company, revamping all procedures and plans and replacing them with the experience that they have collectively gained through running businesses of their own. The other school of thought suggests playing the role of mentor or even a helpline operator, giving the entrepreneur their own space and focussing on problem solving by focussing on the results instead of the methods employed to get there.
But which one is right? Whilst grappling with this conundrum I came across the following poem from Sabine Baring-Gould. The message conveyed in the poem is self-explanatory and it definitely inspires me to be a more open minded investor.
In my honest opinion, what got me to invest into the idea was the energy, zeal and the uniqueness of the entrepreneur and his/her idea – so why kill all of that by bringing my (or the lead investor’s) own company running methodology? I am not promoting giving the entrepreneur free reign and let the cattle run wild – but it does make me conclude that an angel investor(s) should decide with the entrepreneur on the KPIs/metrics that they want to track and then actively and periodically track those metrics and any statutory compliances. The investor should get involved in two scenarios – one when a metric starts to move away from the desirable range that was previously agreed to and second if the entrepreneur specifically reaches out for help.
But meanwhile if the entrepreneur is performing and meeting all his/her metrics and he/she wants to have a lasertag game at the office and start an incentive program that offers a cold beer to the staff on Monday evenings – I say go right ahead!
The Olive Tree
Said an ancient hermit bending
Half in prayer upon his knee,
‘Oil I need for midnight watching,
I desire an olive tree.’
Then he took a tender sapling,
Planted it before his cave,
Spread his trembling hands above it,
As his benison he gave.
But he thought, the rain it needeth,
That the root may drink and swell;
‘God! I pray Thee send Thy showers!’
So a gentle shower fell.
‘Lord! I ask for beams of summer
Cherishing this little child.”
Then the dripping clouds divided,
And the sun looked down and smiled.
‘Send it frost to brace its tissues,
O my God!’ the hermit cried.
Then the plant was bright and hoary,
But at evensong it died.
Went the hermit to a brother
Sitting in his rocky cell:
‘Thou an olive tree possessest;
How is this, my brother tell?’
‘I have planted one and prayed,
Now for sunshine, now for rain;
God hath granted each petition,
Yet my olive tree hath slain!’
Said the other, ‘I entrusted
To its God my little tree;
He who made knew what it needed
Better than a man like me.
Laid I on Him no conditions,
Fixed no ways and means; so I
Wonder not my olive thriveth,
Whilst thy olive tree did die.’
– Sabine Baring-Gould-