Seed Capital From Angel Investors: Christina Brodbeck, Silicon Valley (Part 2)

By guest authors Irina Patterson and Candice Arnold

Irina: When you see a promising pitch, what is your next step?

Christina: It’s two ways. If I just read about something that I like, or hear from somebody, I’ll usually reach out to [the entrepreneur], and say, “Hey, I’m really interested. Let’s sit down and grab coffee and talk about it.” Or if somebody sends it to me and I really like it, the same thing. I’ll follow up by saying, “Hey, let’s meet and talk about it more in depth.”

Irina: When you review a company, what factors are most important for you?

Christina: The team, of course, is very important. In terms of being an angel investor – at least for me – it’s more about, do I have a personal connection to the product? Will I use the product or does it resonate with me personally? Is it solving a problem that I have, or is it an area that I’m specifically passionate about?

Irina: Do you conduct your own due diligence?

Christina: For me, it’s more immediate gut feeling. If I really like the product and I really like the team and the founders, then I know, most of the time, within the course of the meeting. Even sometimes before meeting with them, if I reach out to them [I know] if I’m going to invest or not. I’m usually pretty quick.

Irina: In the past 12 months, how many investments have you made?

Christina: I’ve been doing this for a little more than a year, and I’ve made seven investments.

Irina: What is the range of your investments?

Christina: For me, it’s not too high. I’d say the average is somewhere between $20,000 and $35,000 each.

Irina: How long did it take for a company to receive funding from you?

Christina: It depends on a lot of things. It depends on them, what stage there are in terms of getting all the investors together. It varies, depending on the company.

On average, I’d say it’s from two to three weeks. That’s if everything is already all set out, everybody is in agreement and stuff like that. If their documentation is ready and such.

Irina: Most of the time, you’re not investing alone, right?

Christina: Right. For most of the companies that I’ve invested in, there are other angels also investing.

Irina: What is the typical valuation of a company you invest in?

Christina: Probably anywhere from $1 million to $3 million.

Irina: What is your typical percentage of  equity?

Christina: It depends on the company. It depends if people are doing equity or convertible notes. I’m pretty flexible.

Irina: What is your preferred type of investment?

Christina: I’ve done a variety, and I’m flexible.

Irina: Do you think about returns when you invest?

Christina: Actually, I don’t. For me it’s more about being passionate about the product – more passionate about the idea. For me, making money is more of an afterthought.

Irina: At what stage of a business’s development do you usually invest?

Christina: Most of them are really early. Some of them haven’t even necessarily had demos.

Irina: So, were some an idea on paper?

Christina: Yeah, some of them were. I think a couple of them have been launched, but a lot of the companies I’ve invested in either just came up with a demo, or they might not even have their demos yet.

Irina: Have you ever invested in a company all by yourself?

Christina: I have invested in a company where I was the first investor. And then, later on, I referred a friend who invested.

Irina: Do you think in terms of total available market when you evaluate a company?

Christina: Yes, definitely. That’s one of the things that’s very important. Is the market for this a large market? And for me, it’s not necessarily a number. It’s more of, do I see this as a potential large market or not?

Irina: Say somebody comes to you and their target market is a niche market, like $20 million  – a small size, tightly defined, an interesting niche  market, would you invest?

Christina: Yeah. It’s definitely possible because I think at that point, it’s more about if they can win over that market very well. And can they do it in a way where users are completely engaged and they keep coming back again and again and keep spending long periods of time with the service?

This segment is part 2 in the series : Seed Capital From Angel Investors: Christina Brodbeck, Silicon Valley
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