Should you take money from an angel with no investment experience?
Investors come in all shape and sizes. While some might have the right interests and motivations at heart, others are only concerned about the bottom line rather than the health of the company as a whole. On Ask Ace, an online Q&A platform for startup-related topics, we get plenty of investment-related queries. Here’s one related to an angel with no relevant experience in the business.
Question:
I have an investment offer from an angel. But I don’t know if I should take it because this investor has no experience in investing and has not worked in my company’s field before. Not very smart money is it? But I need the cash to grow the business.
投資の経験がない個人投資家からの投資を受け入れるべきか？
投資家のタイプや規模は様々だ。興味の対象が的確で本心から正しい動機を持った投資家もいれば、企業全体としての健全性よりも、もっぱら最終的にいくら儲かるかにしか関心がない投資家もいる。オンラインQ&AプラットフォームのAsk Aceは事業のスタートアップに関連した話題を扱っており、投資関連の質問が多数掲載されている。以下に挙げたのは、投資対象の事業に関する経験が皆無の個人投資家についての質問である。
質問：
個人投資家から投資の申し出を受けています。でもその投資家の方は投資未経験で、私の会社が取り扱う事業に携わったこともないので、投資を受けるかどうか迷っています。小さな金額ではありませんし。でも、事業を成長させるためにその現金は必要です。
Answers:
Huang Shao-Ning, co-founder of JobsCentral:
You are lucky to be in this situation. Key questions to ask: investment at what value and at what percentage (so you need to know how to value your business); WHY does this guy want to invest in you/your business; ask yourself are you comfortable with the answers you get and if there are any uncomfortable feelings u may have. There are times you may just have to trust your instincts and gut feelings.
Jeffrey Paine, co-founder of Golden Gate Ventures and Founder Institute Singapore:
If and only if you think your company has reached product market fit and you need money to scale because you have nailed it do you actually need to raise money. Smart money is good but sometimes “value add” is also overrated. If you get along with the angel investor, I would take the money. If you can bootstrap it to profitability, always keep all the equity unless you want to grow fast.
Lim Song Joo, Founder & CEO at BWG Consulting Pte Ltd:
Sometimes, investors (in their various shapes and sizes) see things differently and they have their own KPI and objectives. From your business point where cash is helpful to your company, this is good news. It doesn’t matter if this is from an angel investor or seed money from your Dad, you must take it upon yourself to repay their faith by making sure their investment participation is put to good use, for the benefit of the company. They trust you with their money, and you should too with your own.
Solicit a second opinion on the investment offer (& the deal) to make sure that you do not lose the forest for the trees. Try to delve a bit deeper on the angel investor’s motivation and a due diligence check will give you a better read on who you are taking onboard. When you are satisfied and having done all that, take this step forward and start growing your business.
