Become Worthy of Angels
Angel investors like their privacy. They don’t want to be bombarded with hundreds of investment requests, and so they are usually pretty low profile people. I know angels that have done dozens of investments and no one has heard of them. They don’t have a web site, a blog, and they don’t write articles in magazines that will bring attention to them and their wealth, and bring with that attention an unwanted rush of entrepreneurs knocking on their door.
So FundingUtah.com protects the privacy of investors.
But we are also figuring out a way to protect their time.
Investors are busy people. Many of them don’t have time to read scores of business plans looking for the real deal. There are so many poor business plans, so many wanna-be entrepreneurs who don’t really have (yet) what it takes to succeed, and so they are just wasting the time of investors by passing around a plan that will never be funded.
Organized angels often assign individuals to screen business plans and to select the best ones to present to the group meetings. But each individual angel will have a unique, subjective view of what qualifies as a good business plan. Some look at the market potential, some look at the entrepreneur’s track record, or the team, or the revenue projections after five years.
The problem is that some good plans, in fact, some of the best plans, might get overlooked entirely if the screening angel doesn’t understand the industry or the product or the strategy. Even VCs often pass on great companies. According to FastCompany, “Hotmail was turned down by a slew of VCs before Draper Fisher Jurvetson latched onto it and made it one of the internet’s killer apps.” I think disruptive companies and innovative ideas are very likely to be missed by angels.
To help angels find good plans and avoid sifting through too many poor ones, FundingUtah.com will be launching an innovative point system that will help entrepreneurs earn points as their company hits milestones which should help them become more worthy of funding.
Plans that are posted without enough “Prep Points” will not be viewed by our 79 angel investors. But as the team is built, as revenue is generated, as partnerships are formed, as technology is developed, and as marketing and sales start to kick in, the entrepreneur will earn enough Prep Points to become visible, first to early stage angels, and then later, to angels who want to invest in the growth phase. Plans that win business plan competitions and receive other awards for innovation will get Prep Points as well.
There are a lot of business plan competitions that use different criteria to weight the quality of a plan. We’ll probably borrow ideas from many of these. But rather than a one-time score, our point system will teach entrepreneurs the milestones they need to achieve in order to earn points over time so that their plan can be elevated to a higher status. As entrepreneurs earn points by actually running their company (and not just writing about it) they will become “worthy” to take the time of angel investors.
Our genius developer is working on this right now. If you have ideas that you’d like to see us incorporate into FundingUtah.com’s Prep Points system, please comment below or email us.