There has been some good comments online about business angels to avoid – so it seems that the entrepreneur community is growing up and wise-ing up all at the same time.
As in all walks of life, there are the good, the bad and the ugly; but, for perhaps too long, entrepreneurs have assumed that a business angel was the answer to all their problems and hence, they’ve given the angels too much slack.
However, we are seeing a growing understanding that the solution to nearly all business problems is not money but a person who can solve them!
Okay, that sounds cryptic, what I mean is that the solution to a problem is found by looking for the person best placed to solve that problem – or team building! And, get the team right and the money will be a secondary issue – important, of course – but secondary.
For this reason, entrepreneurs who go dewy eyed at the sight of a cheque book are beginning to mature. Take this post by Marty Zwilling which lists the 8 business angels you want to avoid – with particular criticism of the ‘broker angels’. This follows neatly on from our own piece on the fact that different business angels have different investment strategies that may or may not fit your business goals.
Equally, on this site, we’ve had Bill Morrow of AngelsDen explain how he deals with ‘business angels who try to sell ‘ – “we chuck them out on the night…” and those that aren’t really serious about investing get gently moved aside.
Still, there are too many business angels on LinkedIn who use the greatest excuse in the book ‘I’m not investing at the moment’ or ‘I’ve just had an investment go bad’ who then explain that they ‘know a few people’. This is the classic strategy of the broker in an angel’s cloak.
In a way, it is understandable, brokers need to do business and if entrepreneurs are not able or willing to ask intelligent questions, then they will carrying on masquerading as business angels as it is a quick way to generate leads.
So, it is worth remembering that brokers have an important role to play, it is just better to find out up front before spending to much time discussing your business.
So, what questions should an entrepreneur ask a potential business angel before getting too excited? We’ll cover that in our next article… 7 questions to ask any business angel.