- these days most angel fish school in groups
- most states and regions have well advertised (web) ponds,
- the fish have the kindness to spell out in advance what bait they will strike
Tech Coast Angel members invest in southern California companies, only. We look for products and services that can achieve rapid adoption in very large markets. Some of our criteria:
At other ponds the billboards list:
- specific industries (because the fish have expertise in them)
- level of business development (no pre-revenue plans)
So, figure out what business (bait) you have and decide if you stand a chance to catch angel fish. If not, go fish for other species that bite on different bait, presumably the one you have. Here are examples:
Friends and Family: this species bites on you personally and your trust factor with them. Returns are hoped for but often the motivation is to help you along with the world changing idea you shared with them.
Banks: They still have money and do lend it if your business is the right bait for them. You'll need collateral and cash flow to have an chance. Beware of lines of credit that appear to be a strike, but you cannot count on for very long.
Factors and Receivable Discounters: They bite on (and take a good chunk of) invoices you carry as receivables from financially reliable customers (they bite on someone else credit).
There are many more, each specialized in different aspects and needs of your business.
Back to that favorite species: the angel fish. The words that carry value with them (shiners in the fishing parlance) include:
Scalable: 1. the business can grow into a big business, 2. you and your team are capable to grow it
Market size and dominance: "1% of the world" is probably meaningless, "80% of left handed investment bankers with an income over 500k" is a concept one can measure and relate to. Attractive markets have size and allow some level of dominance.
Early Exit: a plan with an Exit is a requirement (remember: angel fish get to eat only at exit time). Early Exit is golden. More on this in a forthcoming post.
Barrier to Entry: the stronger your position, the less spooky the fish will be
Risk: This is the monster from the dark depths that scares angel fish away. They know it is part of the game, but they hate it. To manage their fear, show that you have identified fall back positions and fail safe conditions at every step; be able to simulate the cash flow projections accordingly.
BE BRIEF: this is the most impatient fish in the world
Happy fishing. There is fish in that pond for the right bait. Do not waste time otherwise.