Sramana Mitra: Let’s discuss stage. The early stage investment has become quite complex. It used to be seed and Series A. Now it’s pre-seed, seed, post-seed, and pre-Series A.
Victoria Pettibone: It’s true. There are no rules anymore. Like everything we do, we invest at every stage. However, most of the investments end up at late seed or Series A – certainly past the friends and family round. We do convertible notes. It could be that first round before the first equity raise.
Sramana Mitra: What metrics are you looking for? Are you looking for revenues? Are you looking for customer validation but not necessarily revenue?
Victoria Pettibone: I wouldn’t say there is a specific metric. Where one runs a fund, they can have fairly clear parameters. When you’re dealing with a group of individuals, all with their own ideas, I often say that my job is herding cats towards the investment. It makes it less defined. I think what our angels look for is real proof of concept and some traction. It might be sales. It might be some other forms of real traction.
Sramana Mitra: Are pilots considered acceptable?
Victoria Pettibone: It’s helpful to be through the pilot and have the results. Companies that haven’t done pilots, usually it will feel a bit too early for their comfort zones. We do have a company that we invested in from the very beginning. There was just an entrepreneur and an idea. She had a long history with Astia. She was a serial entrepreneur. She has not only been on the entrepreneurial side. She has been on the venture side. She had a team ready to sign on as soon as she received her first funding.
We jumped in on that. No pilot, no anything had been done because of other factors. At the end of the day, it’s all risk and reward. They’re looking at the calculation of how much risk they are willing to take. For an angel, it’s their personal money. They have to be thoughtful about it. It’s going to be tied up for a long time.
Sramana Mitra: Is there a fee for companies that apply?
Victoria Pettibone: No fees. You just apply. You get your materials up on the platform. The first step is, the executive team looks at the company and we make sure that they fit the basic criteria. We do a criteria check. It goes through industry screen, which means that industry experts within this broader Astia community take a look at a very select amount of the materials and they answer questions about the company.
We aggregate those results and pretty much mathematically move the company forward or not. If we don’t, we provide feedback. I’ve been told time and again that the feedback is some of the most honest and helpful feedbacks. If a company makes it through, they go through our operations screen. It is a virtual presentation to our C-suit committee, which is made up of people who have C-level experience, whether they serial venture-backed entrepreneurs or C-level in corporates.
There’s a Q&A after the presentation so they can dive in a bit. It’s this interesting multi-tiered process that the company goes through. There’s an investor screen at the end. Any company that makes it through is highlighted to the angel group but also along the way, we’ve been asking people, “Are there any investors you would introduce this company to?” We are really interested in helping companies access capital whether it’s through Astia Angels or somewhere else.
We’re just about to relaunch our venture showcase series, which is an opportunity for companies to present to VCs. We used to do that in person. Now we’re doing a virtual format of it. Again, just creating a lot of access points for entrepreneurs to receive feedback and receive access to investors. Even if they don’t get an investment from Astia Angels, hopefully there’s some value add in going through the process.