Seed Capital From Angel Investors: Chenoa Farnsworth, Executive Director, Hawaii Angels (Part 5)

By guest authors Irina Patterson and Candice Arnold

Irina: What else could angels do to improve their chances of success?

Chenoa: My opinion is that every angel has something to bring to the party, and if they focus some energy and some of their own resources – not just money – with the companies, then they will get better outcomes.

You see better outcomes from the deals where there’s been a lot of involvement from the angels.

It’s personal preference; obviously, I can’t force anybody into it. But I do tell people when they join the club, this is the expectation. If you just want to invest, you should invest through a fund but if you want to get involved, you should join the angels. That is the difference.

Hopefully, at least one of those individuals will go on the board or will be what we call the “deal lead.” And the deal lead becomes the point of communication for everybody else in the deal, passing along information and, more important, helping.

I think entrepreneurs aren’t very good at asking for help. They kind of have this I’ve-got-it-all-covered attitude until suddenly you hear about some kind of disaster like they can’t make payroll this month.

[And we say], “Oh, you should have asked us for help months ago instead of letting it get to this point.” So, again, the closer the angels are to these companies, the less likely that is to happen, with a level of open communication that goes on where we would have a lot more warning about things going wrong.

And [they’d] have a better relationship with regards to getting the assistance that they need, whether that be introductions to funders or introductions to customers. It’s mostly about the relationships and the networking that the various angels can bring to the table.

Irina: How long have you been living in Hawaii?

Chenoa: I’ve been living here, on and off, for 25 years. I like it. I like things about it. Obviously, it’s paradise. It’s beautiful and it’s a nice environment for raising kids. But there are things about it that are frustrating. On the business side of things, it can be frustrating because it’s isolated, and the opportunities are limited as far as what will really be viable as a business here.

Irina: How do you feel about doing things virtually?

Chenoa: People who have experienced it find it to be difficult. For example, several of our companies that started here, their CEOs have since moved to California even though when they started here, they started with the premise that “I can do this business from anywhere. It’s a software company or an Internet company. It doesn’t matter where I am.”

But at a certain point, they all have reached the conclusion that, in fact, it does matter. Again, for networking, for sales, for follow-on funding, they need to be in California.

Irina: Thank you, Chenoa. I enjoyed our talk.

This segment is part 5 in the series : Seed Capital From Angel Investors: Chenoa Farnsworth, Executive Director, Hawaii Angels
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