What You ‘Owe’ Your Angel Investors

April 17th, 2007

This is largely stolen from a buddy of mine who led me out of the entrepreneurial gate by several years. It’s the touch stone I’ve used at each step and it was very clarifying and calming. You owe your investors:
1. 100% of your effort. Your absolute everything to make the business work within the boundaries of legality and business ethics.
2. Honesty about the situation and your prospects (this is why you should absolutely put an angel investor representative on your Board of Directors).
From these two cardinal rules, there are a couple of things that I think follow pretty directly, namely that you should hear them out on pretty much any topic and, finally, even more than worrying about making them a billion dollars in the first year (which turns out to be surprisingly hard), you should worry first about protecting their capital by trying to make sure that there is more capital to keep fighting and by building something – a piece of code, a contract – that someone else would want even if they don’t want your company.

Entry Filed under: Life as a Start Up