John Ason have been an angel investor for over 21 years. He has invested in over 80 companies. Johns portfolio has 20 female founders, 12 international companies, 30 of those companies are currently active in his portfolio. The sum total of the sale prices for 5 of his biggest companies exceeds $4 billion.
In the following interview John shares some of his insights into angel investing.
What made you decide to be an angel investor?
I was at AT&T Bell Labs and worked on bleeding edge technology projects. I was fortunate to make money in the stock market so I retired. After about a year I got bored and found the startup world an interesting place.
What kind of companies do you invest in?
I only accept one page executive summaries that are aesthetically pleasing – this indicates vision, structure and effort. The next thing is an explicit statement of what the company does. I want you to describe why this market is big enough in your own words. A simple forecast and how much money you are looking for and at what valuation. And a little about yourself and any accomplishments. If this is acceptable to me I will request a meeting. Please note I do not evaluate the product or service as this is for later due diligence.
Looking back, what did you learn and what would you have done differently?
I would not do anything differently as the mistakes were great learning experiences. In my first 10 years I had a 90% failure rate – currently it is about 25%. I initially focused on great products/services and would accept mediocre people – now I focus on great people and decent product/service.
How does someone get you excited and willing to commit?
A beautiful one page executive summary with a founder who is smarter than me.
What are the red flags for an angel investor?
Incoherent presentation, unable to describe what the company does, completely focused on features of product, inability to make decisions etc.
What startups currently raising money should contact you?
I only do early seed stage companies. I will do international companies but only of an angel/VC group is local who can support me.
The entrepreneur/investor relationship is quite complex. What should an entrepreneur look for in an angel investor?
The entrepreneur should look for investors who can make meaningful introductions and who can share some previous experiences. Where things fall apart is when the investor has management or operational responsibilities. Remember this is your company and you should find investors to help you.
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