Founder lessons I learned while angel investing
Whilst angel investing the past ten years, I’ve had the privilege of working with some remarkable founders spanning the US, Europe, and Asia. Not every investment was successful, but every founder I’ve worked with taught me much about what it takes to succeed.
Additionally — having spent time as a founder myself — I do my best to bring together the perspectives of both the operator and the investor as part of the team at Beringea.
In this article, I share a few of the lessons that I’ve learned during my time as an angel and operator — I hope these offer some useful advice to founders setting out on their entrepreneurial journey.
If you find these tips interesting and want to dive deeper, then drop me a line on LinkedIn — I’m always up for grabbing a coffee or tea!
It’s not just the product…
I’ve sometimes seen founders pour all their energy into trying to perfect the product. As a result, they often lose their focus on the broader value of user experience.
For many businesses, customer reviews at either extreme — those that are highly positive and those that are intensely negative — frequently stem from the wider user experience, rather than simply the product.
To that end, it’s essential to remember that you’ll tend to be selling the experience of buying from your business, interacting with your team, accessing customer support, and a whole raft of other touch points — it’s not only the product that’ll define success.
Think about hiring a Finance Director early on
Establishing financial oversight and budget controls from the outset will make your life easier down the line.
Appointing a Financial Director is often overlooked by early-stage founders, but the right hire can help dramatically in navigating the financial complexities (and opportunities) of scaling a startup.
You don’t want to wait until the house is on fire — much better to already have someone in place with whom you’ve already spent time working together with. Hopefully, they’ll also help you to identify opportunities for efficiency, growth, and investment — it’s a hire that can both save and make you money!
Keep nurturing early inbound leads
When founders first start a business (particularly those that sell to other businesses), they’ll often have an early boost from inbound sales opportunities. The playbook tells you that you’ll soon have to start thinking about building an outbound sales machine.
In my experience, I’ve often seen founders choosing to shift gears and put all their energy into outbound too soon. I get the temptation, but there’s a risk of making early customers feel neglected.
Maintaining these relationships tend to take more time than one might think, but it’s worth focusing on for longer and then scaling outbound gradually. The last thing you want to do is adopt and scale the wrong sales model.
When hiring, cool heads prevail
When you meet an exciting potential key hire, it can be tempting to want to onboard them as soon as possible. And in the context of a long search, it can be even more so.
However, hiring the wrong person is much more costly than losing a promising hire towards the end of a process.
Better then, to resist any impulsive hiring and taking your time instead. If they truly believe in your mission, you likely have more time than you think.
Embrace the effort (sustainably)
Building a business is kind of like running or cycling. As Tour de France champion Greg LeMond put it, “It never gets easier, you just go faster.”
Having said that, in the same way an athlete develops a sustainable training plan to minimise risk of injury, make sure you look after your mental health to minimise risk of severe burnout — which 36 per cent of founders report feeling at any given time.
Sometimes it feels like there’s no time to waste, but looking after your business also means looking after your wellbeing.
