Seed Capital From Angel Investors: Bob Aholt, Pasadena Angels (Part 10)

By guest authors Irina Patterson and Candice Arnold

Irina: And what do you think angels could do to be more successful?

Bob: There’s a couple of things – fantastic question, thank you for asking that. One of the things I think that we can do better is not filter out the companies that we invest in based on presentations and slickness and the ability to have a great presentation, but more on content and substance of the companies. That’s much easier said than done. We need to get to companies that are really good, that may or may not have a good presentation. And sometimes I think we get sold on a slick presentation. Another thing that, I think, has to happen is after the investment, I think that the angels need to provide more value downstream. And that’s one of the things that’s a competitive advantage for the Pasadena Angels. Our tagline is: More than money, we’re going to provide capital and guidance to a company. So if we can open our Rolodex and give a company a contact that it wouldn’t normally have, if we can stay close to the company and give it that benefit of 35 years of running a consulting firm, those are the things that are going to make a company more successful than others.

Irina: Now, let’s turn to angel-backed companies. What do they need to do to increase their chances of successful exits?

Bob: I think Harvard did a study that said that companies that have angel investments tend to do better. So, what I think happens is just the opposite of what I said about what we need to do. The entrepreneurs who listen going in and realize that they don’t have all the answers going in and are leveraging that incredible resource of angels and working different avenues, and looking at the pivot points of customers, and when it works and when it doesn’t, and being agile up front in generating revenue, relying on the expertise of the angels to say, “Hey, have you thought about this?” or “What are you going to do about that?” Those are the ones who are more successful.

I think everybody acknowledges that most of the economic upturn comes from entrepreneurial companies, small companies. And if we focus on that, I think that we can make a huge dent in the issues that have happened over the past 24 months.

Irina: Exactly. And, as you know, our 1M1M Global Initiative has a very specific goal to help 1 million entrepreneurs worldwide to reach their first $1 million in revenue though consistent and structured feedback.

Bob: Yes, and one of the things we struggle with is, being 100 individual people – and some of us are busier than others – it’s hard to give the amount of feedback that entrepreneurs need. In fact, we’re trying to increase the breadth of our feedback channel, so when we’re talking to an entrepreneur we can tell him  or her more specifics like, You have to think about this, or You don’t have this, or Have you thought about competition? If we can send them to groups like yours [Global 1M/1M Initiative] for feedback and then they will be able to act on that feedback, I think it would be a win-win situation all the way around.

Irina: Thank you, Bob. Great conversation.

This segment is part 10 in the series : Seed Capital From Angel Investors: Bob Aholt, Pasadena Angels
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