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1Mby1M Virtual Accelerator Investor Forum: With Victoria Pettibone of Astia Angels (Part 4)

Posted on Monday, Feb 5th 2018

Sramana Mitra: In some cases if you can exit your company without needing a Series A, that is not a bad way to mitigate the Series A gap.

Victoria Pettibone: Yes. Your angels are going to be happy for the most part. Even though it’s a short turnaround time, they will not have been diluted.

Sramana Mitra: So far, we’ve been talking about companies that operate in a more capital efficient mode. The other side of the coin is this unicorn mania, where there’s so much capital flowing into companies.

These are typically the hot companies that attract this level of capital. If you are a seed investor in a very hot company and there’s a lot of capital chasing, how do you mitigate from being buried under later-stage liquidation preferences? There are cases where a fund comes in and gives liquidity to the entrepreneur and the angel investors are sitting around not getting liquidity.

Victoria Pettibone: That’s a tough one for sure. I think that a lot of the companies that angels are interested in are not necessarily trying to go the unicorn route. I think the investors that are attracted to Astia Angels do believe in missions. They’re investors. They do want to see profit. They’re not doing this for non-profit reasons. Why Astia Angels versus another angel group? I think they believe in the mission.

Sramana Mitra: Of supporting women entrepreneurs.

Victoria Pettibone: Yes and the larger mission of making the world a better place – equity, equality, and inclusion. Because of that, a lot of the companies that they end up being interested in are quite visionary companies, but less so of the next Facebook. Because of that, some of those unicorn opportunities that might go down that path may not attract as much interest.

Sramana Mitra: A good segue into what you’re saying is, lots of stuff have already been built. Salesforce was possible to start in 1999. Nowadays, there aren’t so many wide open opportunities to build these gigantic companies.

But there are many niche opportunities. Some of these businesses need to be built for small amounts of capital – maybe $1 million and sold for $10 million. In some cases, they can be built for $250,000, get enough validation, and then maybe sold for $5 million. It seems like in your community, there’s appetite for these kind of investments.

Victoria Pettibone: There are some. There’s still some middle ground where they are still looking at opportunities that are quite large. They’re going to be businesses and not just a single thing. They’re looking at growing real businesses.

Sramana Mitra: In B2B, there’re a lot of opportunities like these. B2C is a bit more of an all or nothing game. What I’m talking about is more prevalent in enterprise software where you build a product that covers a certain niche that hasn’t been served yet and could exit into a larger portfolio of enterprise software product. Anything else that you want to add to our discussion that would help our entrepreneurs get to know Astia Angels?

Victoria Pettibone: We never consider things as a closed door. If you do apply to Astia and you don’t pass one of the screens, we encourage our entrepreneurs to come back and apply again. It’s never a flat-out no. We believe in relationships. Some of our investments are in companies that we’ve known for a long time whether they came in too early or they came in and we got to know them under one company.

Maybe that company failed and this is their second iteration. This time is the time that it all gels. I alway say, “Keep the door open and remember it’s always about the relationships. Take advantage of the advisors you meet along the way.”

Sramana Mitra: Great. It was very nice talking to you.

This segment is part 4 in the series : 1Mby1M Virtual Accelerator Investor Forum: With Victoria Pettibone of Astia Angels
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