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Seed Capital From Angel Investors: Peter Birkeland, RAIN Fund Program Manager, RAIN Source Capital (Part 6)

Posted on Saturday, Jul 3rd 2010

By guest authors Irina Patterson and Candice Arnold

Irina: What level of experience do you require a company’s team to have?

Pete: We’ve invested in people who are in school, out of school, senior executives. I think what they’ve got to have is the ability to concisely present the opportunity that they have and make sure that it can be explained to the investors, most of whom don’t have the domain expertise in the space that maybe the entrepreneur [has]. So, they’ve got to be able to do that. And they also have to be able to show the ability to raise money.

They have to show the ability to really have the passion that they want to grow this, and really be open to being worked with and helped and learning that they’re creating something that’s bigger than themselves.

We look at the background and all that, and that kind of roughs out in due diligence. That’s one of the questions you always ask yourself is, If this person’s never done this before, never been an entrepreneur before, is that a disqualifier? And I would say no, it’s not.

It’s just a question you have to ask and a risk you have to balance. Maybe you can balance that off by bringing through advisory boards or through bringing people onto the team to help build up that weakness.

Irina: Does a company have to come to you with a complete team?

Pete: We know the team isn’t going to be complete. Obviously, we have to figure out who’s going to sell this product and be responsible for doing that, who’s going to make the product, and who’s going raise the money. Those roles are the three critical roles that we look at.

And then we would look to maybe augment that through advisory boards. There are certain things that can be outsourced, such as accounting and financial things, to part-time people. Even other functions that aren’t as critical at this stage of the business, as opposed to those three that I mentioned.

Irina: Are there particular character traits that a founder might have that could clinch the deal?

Pete: What really puts people over the top is somehow they’re are able to make a connection with the investors. So, they have that ability to have the investors believe in them. That’s what we’re doing; we’re investing in that entrepreneur.

More than likely the business plan and the business model are going to evolve and change and as the company meets the market or has setbacks or successes. But that founder’s got to be able make that connection so he or she can make that bond with the investor team or the investor group, so that those investors feel good about investing in that entrepreneur.

This segment is part 6 in the series : Seed Capital From Angel Investors: Peter Birkeland, RAIN Fund Program Manager, RAIN Source Capital
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