Visiting Angels

Three Angels from Robin Hood Ventures led our final Tuesday Night Speakers series-- Larry Brotzge, Tom Olenzak and Coley Brown. While all three are members of the same Philadelphia-based angel group, they represent the broad array of angel perspectives. Coley is from a technology background, having recently joined Robin Hood after retiring from CTB Consulting, a company he founded. He emphasizes the importance of mentoring, something he’s learned starting five companies. Larry, by contrast, comes from more of a financial background. He is a former CPA at a Big Four firm and Controller for a Fortune 500 financial services firm who co-founded Robin Hood Ventures. His interests were always more entrepreneurial and he has been working with start-ups for the past 14 years. Tom is a mix. Experienced entrepreneur, independent Angel, Investment Banker, and Venture Capitalist; running FCG's corporate healthcare venture fund. He also founded Cutting Edge Computer Solutions, Inc. Tom is currently a founding partner of Fountainhead Venture Group and DreamIt Ventures Guru.

The evening opened with introductions and important advice from the three angels. All three agreed that angels are motivated by their own self-interest. While they may be interested in the product and people, they are investors who expect to earn a return on their money. Turn offs included unrealistic value estimates, ludicrous statements (we have no competition), and being unprepared. In an introductory setting, Coley recommended offering a “Reader’s Digest” version of your idea, with the goal being to create an invitation to talk later. Tom emphasized the “Why” element. Having a great idea isn’t enough. You need to explain why it matters and why it is a big idea.

They also spent some time discussing different funding options that might be appropriate depending on where the company was in its growth curve: family & friends in the concept stage, individual Angels when looking for $50-100k, Angel Groups and Venture Capitalists for more significant sources of capital. They also suggested that when seeking individual Angels, look for people in related fields. Identifying someone with expertise in your area will create an opening for dialogue, feedback and ultimately sponsorship.

When creating financial projections, one Innovator queried, “Would you prefer we make our best guess or build something based on the size of the market?” All three agreed that there should be a logical progression through your assumptions. The numbers need to be reasonable, and be built from the bottom up. Financial projections and the model used to build them are the numerical representation of your business plan. Larry added that if you can’t give revenue, at a minimum you needed to outline the steps, timeline and milestones for getting to that point.

Another Innovator asked, “Should you state possible exits options?” Again, all three agreed, especially when dealing with Venture Capitalists and Angel Groups, sharing that Investors will want to know the type of companies that might ultimately find your company attractive.

Our thanks to Larry, Coley and Tom for another helpful evening. Their insights will no doubt be useful as the Innovators prepare for Funding Day, September 4th.