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Finding The ‘Right’ Companies to Invest In

This article is written by Clinton James, a Contributor Author at Startup Istanbul.

Asra Nadeem, a Program Director within Draper University, joined us during Startup Istanbul 2017 to deliver an informative workshop concerning Angel Investment. She comes from Pakistan, and two of her companies are created by Tim Draper, and that is how she knew about him. During her workshop, she gave us valuable pieces of information
regarding to investments.

People are scared of sharing good deals, yet that is how the best entrepreneurial ecosystem places like Silicon Valley started. While investing and trying to de-risk yourself, at the same time, you are creating an environment where entrepreneurs strive and earn in the long run, says Asra Nadeem to Startup Istanbul’s congregation as a partner of an Early Stage Fund called Draper University Ventures.

Be focused, when you sometimes don’t not have enough money to buy luxurious things like a yacht but would be willing to invest. Can be scary but work through meeting the entrepreneurs, help them solve the problems and hold their hands, because, while they are building these companies, and you don’t put some of your sweat equity to their success, then the likelihood of the ecosystem and the company succeeding goes down.

Understand the non-proprietary deal flow, whereas there are many other investors you interact with, and realize that by the end of the day the entrepreneur may get a better deal from somebody else. Similarly, acceleration-demo-days are the best ways to meet people when starting off in your fund because you are still building your brand as an investor.

Another important aspect is the proprietary deal flow, deals that never see the light of the day. The entrepreneur goes to the investor from a researched profile and purposes to see that particular investor. There’s need for the investor to have a network of trusted investors to share these kind of deals to quickly close that round for the entrepreneur. This is where you should be working towards in the long run.

How does an investor build his/her brand or become an insider?

There is need for you to join an Angel Syndicate. Which is like a bunch of investors who put in some small amounts of money and becomes an early stage funds to forming one body. The individual with the highest market reputation and brand takes the lead. When an investor joins into an Angel Syndicate, the entire work is done for you. Approve the deals that you have confirmed you would like to invest in and in about two years, have your brand well known. Therefore, you get a jumpstart to build your networks, relationships and money with other investors. And if you don’t like an investor, you may choose not to work with the investor in the future.

How to pick a syndicate?

Be keen to see at least 2 entrepreneurs they have funded, have 4 -5 companies and have a track record. When they give you a deal, look for at least two founders and the product and service that is already in the market. 6 months of continuous growth or at least be able to justify the growth numbers of what they are showing you. Once in the syndicate, beware it’s a team and are not doing you a favor. When you meet others out there, lead and help each other grow in the long term.

14 May 2019

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