Acclaimed angel investor Peter Read – who has helped fund startups such as Moviepilot, Songkick and Readmill among many others – led a talk entitled “Are you the kind of entrepreneur that angel investors want?” at the Heureka conference 2013. He shed light on what he looks for, how he wants to impress you and why a mindful approach to entrepreneurship can be useful…
“The very title of this talk implies the conventional logic flow that you, as entrepreneurs, impress me, and I give you money. But the reality is very much the other way as well – I have to earn the right to be able to invest in your business and be a fellow traveller in your entrepreneurial journey,” he began. “Whether you’re in a very early stage – or later, you should expect the investor to try to impress you.”
How to talk to angel investors
Read closes about ten deals a year in the £10-£20k bracket. “There’s a couple of things I’m looking for, but bear in mind that, for me, it’s less about the answers you’re giving and more about the way you answer – and the passion you have,” he emphasised.
When thinking about business and economics, Read revealed that he uses the “old” McKinsey Framework. “I would expect from a first conversation with an entrepreneur, to discuss typical demand side stuff – such as who the customers are, their needs, willingness to pay, product-market fit, market size and market growth – as well as supply side – so competitors, source of sustainable competitive advantage, unique technology, talent and strategic partnerships,” he explained.
Additionally, for early-stage startups, you should have a rough approximation of your business model and vague idea about the exit. Read said this means, “Are you expecting it to eventually IPO? Is this a sale to a European media company? Or are you going to sell it to Google, Apple or Facebook?”
And how would he try to impress you? “Mainly, it would be introducing you to talented people, which could be other cofounders, employees, investors, strategic partners, board members or advisors,” said Read, who has worked in London, Los Angeles and Silicon Valley.
“The best entrepreneurs I know are mindful”
Building a startup isn’t easy and is often accompanied with an unpredictable mix of emotional ups and downs. While there are many events and workshops targeted at enhancing entrepreneurial hard skills such as coding, UX and finance, few of them focus on developing soft skills such as tolerance for ambiguity, resilience and maintaining creativity, which are just as critical to startup success.
Read has been learning about the importance of these soft skills for about four years now and spent a lot of time with “top neuroscientists in the world” exploring the area, including author and Oxford University Professor Mark Williams. Read said there is increasing scientific evidence that shows the brain can be reshaped to develop these psychological and emotional qualities with mindfulness – a concept rooted in Buddhism.
“It’s the ability to focus your attention and awareness on the present moment. Not wondering about what happened in the past and not being anxious about what might happen in the future – just being present right here, right now,” he explained.
It’s not everyday that you hear an investor bring a philosophical concept to the startup stage, but Read addresses an important aspect of entrepreneurship that is rarely discussed. He feels strongly that entrepreneurs can reduce stress and increase creativity from practicing mindfulness and has even introduced Williams to UK pre-accelerator programme Entrepreneur First. Williams is scheduled to deliver a talk on these neuroscience-based techniques this June.
Peter Read images via Heureka Facebook page
For related posts, check out:
Investor Spotlight: Peter Read on why Berlin “floats his boat”
99 Problems but a pitch ain’t one – top VCs and investors on the secrets of a perfect pitch
VIDEO: Peter Read – “I’d love to find another 5-10 companies in Berlin over the next year or so”