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10 Commandments from Angel and Tech Entrepreneur Sherry Coutu on how Startups should choose and work with great Angels and Investors
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Cambridge angel and tech entrepreneur Sherry Coutu hammered home the importance for startups to harness their ventures to the right mentors and investors from Day One when she addressed a Tech Entrepreneurs Week summit in London.
Business Weekly and its new social network spin-off for startups – CambridgeElevator.com – heard Coutu deliver 10 commandments on how to choose and work with great angels and investors.
Coutu emphasised that it was a big wide world and if startups couldn’t find the most effective advice within the UK they shouldn’t be afraid to cast the net globally.
She urged startups to forge strong relationships with individuals within the angel and VC community rather than entities.
Coutu’s 10 commandments for startups are:-
1. Choose angels/mentors who have an amazing network of contacts in your industry.
2. Choose an individual rather than a ‘firm’. Personal track-record and value-add are critical.
3. Choose an angel/investor AFTER talking to their other investee companies first (thefunded.com).
4. Choose an angel investor who has gone down the path you need to go down (raising money/floating).
5. Choose an angel investor mentor who has RUN a company to chair your board.
6. DO NOT choose an investor who has restrictions which prevent them from investing more in your company.
7. Choose to listen to your investor and make sure they have time available for you.
8. Choose to communicate with your investor(s). Amazing what you can find out!
9. Know that great angels and investors help you with three sets of things: talent, customers and strategy.
10. DO NOT try to delegate the process to someone else!
Expanding on these tablets of wisdom, Coutu said startups had to realise that the choice of mentor/investor was absolutely critical to success. Some alleged gurus were poor quality and it was important to know the difference. LinkedIn acknowledges that it wouldn't be such a success without the quality of the investors it had, she said.
Sectoral experience was also a prime requisite in the choice of backers.
Coutu advised startups to choose angels with an amazing network in the business segment they were operating in.
You need smart people around you – and make sure they have the time to help you, Coutu added. Talk to other people that they've helped before. You want people around you who don't accept barriers. If they've solved problems for others, they'll do it for you.
Coutu urged that if you think your startup has the potential to scale-up, then find someone with experience of scaling-up companies. And don't limit yourself geographically - if you can't find the right mentor in the UK, look elsewhere.
Finding angels or VC backers with deep pockets was also important, Coutu said. So make sure angels and early-stage investors aren't about to run out of money. Basically, if they don't follow on in later rounds you're screwed. And the outside world won’t see it as the investor’s fault because they somehow don’t have the cash to invest – they will think your business is just a dud.
Coutu said that great investors would help startups recruit talent, get customers and help with access to key contacts and information.
“You're in a relationship with them. Communicate with them. Listen to them. They're with you to help you solve any problems that are coming up.”
Arising from the resultant Q & A: Coutu added that networks and universities were good places to find great angels and mentors.
And she emphasised the need to “close the deal. Don't rely on a handshake. A deal will need to be formalised.”
Tech Entrepreneurs Week, billed as Europe’s largest entrepreneur and investor technology event and conference, has been taking place in London all this week.
It has brought together hundreds of entrepreneurs and investors in technology for funding new tech innovation and provided a range of insight and education from industry professionals.
Keynote speakers apart from Coutu include Jimmy Wales, founder of Wikipedia, who also joined the event as the head of jury for an Investment Competition - as well as Alex Macpherson of Octopus Ventures and Seedcamp partner and co-founder Reshma Sohoni.
Tech Entrepreneurs Week founder Martin Wagner said: “Tech Entrepreneurs Week was started with the goal of bringing together the UK and European tech community to highlight and drive innovation.
“By creating a productive space to introduce entrepreneurs and investors, we’re able to make valuable connections that result in ground-breaking technological headway. The conference provides a perfect platform for the community to freely exchange ideas, share knowledge and advocate for entrepreneurism and innovation.”
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