Seed Capital From Angel Investors: Michael Gruber, Founder and Managing Director, Cornerstone Angels (Part 11)

By guest authors Irina Patterson and Candice Arnold

Irina: What do you think entrepreneurs could do to increase their chances of success?

Michael: One is be incredibly honest and open about everything, both good and bad. You need to establish rapport. After the investment, that’s not the end. That’s the beginning. Typically, a company’s going to need more capital down the road, so you want to be on good terms with your investors.

Frequent communication, letting folks know about what things are, the more likely investors are going to support you if they know what the situation is.

Work brutally hard, and be passionate about what you do. Continue to show that you’re willing to go the extra step to bring a return for investors, and always put investors first in the mind of the activities of the company.

Irina: What are your day-to-day challenges as an angel investor?

Michael: Keeping entrepreneurs and management focused on the key things at hand, not letting them get distracted with other things. More than anything, companies need to be properly capitalized and funded. That’s the biggest reason a lot of companies fail.

If we get involved with a company, we’re very active in trying to syndicate with others. And we’ll syndicate and participate if there are others involved because we want to benefit from any due diligence that others have done because it takes a lot of time, but also because we know that more money is helpful.

You cannot rely on having enough money internally to fund things. You need to have others. I guess the biggest struggle is making sure a company has enough money to succeed [through] the ups and downs. Trying to surround the company with appropriate talent and advisors to get through some of the critical decision making.

Irina: Thank you, Michael. Great insights.

This segment is part 11 in the series : Seed Capital From Angel Investors: Michael Gruber, Founder and Managing Director, Cornerstone Angels
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