The Six Archetypes of Angel Investors

Archetypes of
Startup
Investors

Startup Investors
Momentum
Valu
e
Alternative
Visionary
Virality Business
Impact
Niche
Financial
@joshmaher | #StartupWealth

Startup Investors Momentum
Visionary
“…This idea of vision investing versus
metrics investing, if you’re really more
comfortable with metrics investing then
don’t do angel investing. The early stage
really isn’t going to be good for you and
you’re going to be driving the entrepreneurs
for all the wrong reasons. They don’t have
metrics until they’re well into their business.
A pure metrics investor should try to
participate more in A rounds, or something
like that, or syndicate behind people that
are vision investors.” – Bob Bozeman

Visionary
Attribute Differentiators
Business Has a predefined disposition about a
particular industry, technology, or market
Model Focuses on potential value over existing
model/economics
Team Focuses on expertise and tenacity
Process Investment pace feels right
Sources Network, Portfolio, No formal groups,
expertise or unique access
Terms Flexible – Entrepreneur friendly
Value-add Capital, leadership, strategy

Virality
“You need the ability to put
more money behind your
winners. If you don't have
the money to put a little
more bit behind the three,
four, five best things in your
portfolio, you shouldn't be
an angel
investor.”@msuster
“Lean in on the
winners. Angels
rarely use pro rata.”
@gilpenchina

Virality
Business Understands market trends and shifts
Model Focuses on potential value over existing
model/economics
Team Focuses on expertise and tenacity
Process Investment pace feels right
Sources Formal/Informal angel groups, network,
expertise or unique access
Terms Entrepreneur friendly
Value-add Strategy, Leadership, Capital, Customer,
operations

Financial
Startup Investors Value
“Bridge financing. True honest to God bridge
financings. Bridge financings that are truly bridges.
In other words, you’re building something that is
going to get to the other shore. As opposed to what
most so-called early-stage bridge financings are.
They aren't bridges. They're piers. You're going to
end up swimming. Those should never be debt.
Those should be equity. Suck it up. Management
team, you made some mistakes and you're out of
money and you can't do a fully-priced equity round.
Gee. Too bad. You shouldn't have screwed up.” –
Peter Weiss

Financial
Business Deep business fundamentals
Model Heavy focus on micro/macro economics
Team Focus on scalable entrepreneurs
Process Fixed allocation, avoid obvious past
mistakes
Sources Formal/informal angel groups, network,
unique access
Terms Investor protection
Value-add Wasn’t the capital enough?

Business
“… I really thought I shouldn't do it, but the lead
investor made several calls to me and said, ‘this is
a really good deal.’ I went against my gut on it. I
made note of that, just because I wanted to know
when I put in the money, ‘What was I thinking?!’
Then I can check back and see whether it was a
good move. It turned out to be a terrible move. I
lost all the money on that deal. I could have
stopped my losses there. That one was pretty
clear. Those are the ones that popped in my head
as to what happened.
” – Andy Liu

Business
Business Deep business fundamentals
Model Heavy focus on micro/macro economics
Team Focus on scalable entrepreneurs
Process Keeps meticulous records and learns from
mistakes
Sources Formal/informal angel groups, network,
unique access
Terms Investor/Entrepreneur partnership
Value-add Product, Operations, People, Customer,
Capital

Impact
Startup Investors Alternative
“Every angel investor wants to
make money, but some of them
also want to make a difference.
That difference is the impact. The
kind of impact people want to
make is very personal. For me, it
is supporting innovative
technology and business models
that will lead to long-term
sustainability. – David Bangs

Impact
Business Triple bottom line for specific areas of
impact to society
Model Economics must inherently include desired
impact
Team Does the team match the business impact
mission
Process Track impact, focus on highest impact
Sources Formal angel groups, network
Value-add Capital, Strategy

Niche
“I don't know that I can say we were
one of the first, but we were certainly
very early on in terms of deploying our
funds on AngelList. Instead of just
taking our $500,000 fund and investing
it in $25,000 chunks in a number of
companies, we also took a portion of
our portfolio and decided to allocate
that to investing directly in companies
on AngelList. “– Nicholas Wyman

Niche
Business • Focused on industry/market (e.g. oil/gas
tech or FinTech for capital markets)
• Or diverse business focus + niche capital
allocation strategy
Model varies
Team Execution
Process Keeps meticulous records and learns from
mistakes
Sources Sought as experts, online platforms
Value-add Capital, Customers, Partners, Acquirers

Where to find me?
Follow me on twitter -> @joshmaher
<-- Buy my book @ startupwealth.com
“This should be required reading for all new angel
investors. Josh captures the nuances that experienced
investors only learn from decades of investing.” –Randy
Williams, Founder & CEO Keiretsu Forum, The
World’s Largest Angel Investor Network
Subscribe to my newsletter for updates
/
http://joshmaher.net

The Six Archetypes of Angel Investors

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