Part 3 in this series focuses on Charlie’s upcoming launch of the New York chapter of The Open Angel Forum and gives a key piece of advice to anyone thinking about starting a company.
Sean: Tell me a little bit about the [Open] Angle Forum I know you’re bringing it to New York soon so interesting to hear about it.
Charlie: So the Open Angel Forum that started a few months ago. I actually posted something a little before Jason [Calacanis], but Jason kind of has this much bigger megaphone than I do. So I think there are a lot of folks that basically make money-brokering introductions between startups and angel investors, which isn’t necessarily a bad thing I just don’t think it needs to exist. I think this is something that the community should be able to get together and do, you know, on its own without necessarily charging the entrepreneur, who by the way has the shallowest pocket out of the whole bunch. And so I think we realized that…and at the same time these weren’t necessarily the folks who had the best connections to angels and sort of financing too, you know. I don’t necessarily get my best deals by going to a conference where somebody paid a thousand dollars to go. In fact, I don’t necessarily want to find an entrepreneur who decided it was a good use of their own personal capital to spend a thousand dollars to get to me. I’m pretty accessible, and I think most investors generally are. We may have overstuffed inboxes that may take a couple times to get through, but we’re paid to find good deals and we have to look at a lot of deals. So, you know, the open angel forum basically, you know, it’s set up a as a dinner, you know really sort of relaxed, sort of intimate setting, smaller. We’ll take six or seven companies and, you know, introduce them to about a dozen angels. We’ll have some sponsors there, you know, who basically, you know, pay for the whole thing. But a much better way, I think, to interact in a small setting basis, and this is something we hope to do, you know, a couple times a year. I think the day is April 8th. I should know that off the top of my head we just moved it. But we’ll take applications up until about, I think a week or two beforehand. So I think it’s definitely worth applying if you’re going through angel financing, and so far it’s been a success. They’ve done it in L.A. and Boulder, and companies definitely have gotten financing from it.
Sean: The model is, so you have sponsors to help pay for the event but also the angel investors pay [to attend] as well?
Charlie: No
Sean: It’s the sponsors?
Charlie: Yea…so there’s you know whether it’s a lawyer or a recruiter or somebody, you know, along those lines, but no the angel investors don’t get charged either. So both sides that need and want to connect [are] as seamlessly as possible, there’s no barriers to them necessarily participating.
Sean: So you posted a week ago in your blog, any takers yet?
Charlie: A bunch. Yea. No I very quickly looked at the spreadsheet and it was like very overwhelming. So, I know I don’t have to think about it, you know, until we sort of make the decisions later on. But there’s a lot of interested folks.
Sean: How do you pick?
Charlie: It’s tough, you know. I think one thing we definitely are counting on is a little bit of diversity. So there’s a couple folks that I talked to that I thought had interesting models that would make for a nice mix. You know we didn’t want necessarily six or ten people doing the same type of thing. I think, you know, different judges may have their criteria, but I would love to see somebody who had a really great idea, might not otherwise be as tapped in as some other folks to this community. You know, probably, maybe less likely to pick somebody who would have gotten to these people otherwise.
Sean: And can you say who the angels are?
Charlie: We’re still trying to figure that out actually. There’s a whole bunch of people, and in fact, I think one of the big questions is who’s an angel? Right? You know look at somebody like Rodger Aaronberg who [has starting his own fund], and will still make angel size investments. There’s a number of VCs who want to come who want to make angel size investments. And that’s, it’s kind of a tough call. I think, you know, a piece of feedback, and I’ve had a debate with a lot of folks about this, is you should try and get people whose main job and main routine it is to make these kinds of investments. Where you’re finding somebody who does this by exception, I think it’s tougher for you to get that kind of time. They’re not as used to dealing with companies at this sort of stage. So, you know, were looking for people who are active, can write checks. And that’s the worst part about some of these forums where you pay money. Half the people I know haven’t written a check in two years and the entrepreneur sort of feels like it’s a waste. So there are a bunch of active people in New York that will get invites, and will all be a matter of sort of scheduling.
Sean: If you were to give some advice…so it sounds like we both agree New York’s a great place to start a company, plenty of money, plenty of customers here. You don’t need to be on the left coast. You don’t need to have a Stanford MBA or degree. Anything else you would suggest to someone thinking about starting a company?
Charlie: I think, really, one important thing to keep in mind is…I think VCs and angels are seen as people who take risk, and actually I think if you really want to get an investment taking as much risk off the table to think about…There’s a couple of things. I think you know we look at team, we look at product, and you know, you look at market. And product…you’re never gonna have all three of those things. But, you know, if you have the most experienced team ever, a product that’s already in the market and getting traction, and a huge market, well that’s a real and concern, that’s a late stage investment. On an early stage for a seed you might have an unproved team, with an interesting product, and a big market. And you sort of have to pick and choose, you know which, which missing piece you’re basically gonna have your bet on. The more of those pieces that are question marks the tougher it is to kind of get there. So if you know you’re missing key motors of your team and you don’t have the right product, but it’s a big market, you know, what can you do to take some of those pieces of risk off the table? Can you bootstrap your way to an interesting product? Can you validate the market with a customer, you know, a couple of customers who are willing to buy it or even invest in the product? You know, try to take as much risk off the table as possible, you know, I think is a key piece of advice.
