Seed Capital From Angel Investors: Mike Maples, Founder And Managing Partner, Floodgate (Part 6)

By guest authors Irina Patterson and Candice Arnold

Irina: How many pitches do you receive in a month from all your sources?

Mike: We get about 600 pitches.

Irina: Out of all of those pitches, how many deserve a closer look?

Mike: Out of 600, we’ll probably meet with about thirty or forty. And we might fund one of those companies in a month.

Irina: So, your next step of engagement with those whom you prescreened would be a meeting, right?

Mike: Yes, and it depends how we do it. Sometimes it’ll seem interesting but you’re thinking to yourself, I’m not really sure, yet, so let’s do a thirty-minute phone call.

Here’s the other thing I found interesting: Most of the best deals that we’ve done are the ones where we decided the quickest.

And I think the reason for that is that great startups have a simple elegance to them where you just immediately say, That’s a great idea and I think it’s going to work, and I think this entrepreneur can pull it off. Usually, you can figure that out in a thirty-minute phone call.

Increasingly, these days, that first meeting is the thirty-minute phone call. What we say to the entrepreneur is, If you have a clear idea of your business, you should be able to get it across in thirty minutes in a way that excites us. Not only that, it’s good for you as the entrepreneur because I don’t have to make you come all the way out here and set up a meeting. The meeting itself takes time, but your preparation and travel for the meeting takes even more time.

I have this saying in entrepreneurship, let’s go for the know early. If it’s not going to end up that we work together, let’s figure that out fast in a minimal investment of time on your part and my part, rather than go through a bunch of string you along for weeks and weeks and weeks, and then at the end come up with an objection that we could have figured out in fifteen minutes.

Increasingly, we take those upfront calls and if the call is really interesting to us, then we get into heavy diligence mode and decide pretty quickly.

Irina: So, you or Ann Miura-ko will make the call, right?

Mike: Generally, yes. What will happen a lot of times is one of us will do the phone call and we’ll be like, Oh, wow, that’s really interesting. We need to meet this company in person. So, we’ll go meet with the company in person.

Usually, if we’re strongly interested after a phone call, and we go meet with the company, the probabilities that we might invest go up . . .  quite a bit. Ann and I have pretty different styles. I tend to be too optimistic and fall in love too fast with the company, and Ann tends to be a little more skeptical.

This segment is part 6 in the series : Seed Capital From Angel Investors: Mike Maples, Founder And Managing Partner, Floodgate
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