Seed Capital From Angel Investors: Mike Maples, Founder And Managing Partner, Floodgate (Part 14)

By guest authors Irina Patterson and Candice Arnold

Irina: Do any of those have a particularly interesting story?

Mike: I guess a couple of them. This is why I like to joke about people who think they know everything. So, Twitter, I actually invested in the prior company, Odeo, which is a podcasting company. And Apple decided to give podcasting away on iTunes. So, I’m like, Oh, my gosh, we don’t have a business here. >>>

Seed Capital From Angel Investors: Mike Maples, Founder And Managing Partner, Floodgate (Part 13)

By guest authors Irina Patterson and Candice Arnold

Irina: Do you think about exit strategy at all when you’re investing?

Mike: Not really. We think, Who might buy this company someday? Could it be public someday? But the thing that we’ve learned is that exit’s going to be so far away that what you believe is true today about exits will be fundamentally different in the future. >>>

Seed Capital From Angel Investors: Mike Maples, Founder And Managing Partner, Floodgate (Part 12)

By guest authors Irina Patterson and Candice Arnold

Irina: So, it’s not necessary that the company had on the team, previous CEO experience, or any senior executive experience?

Mike: I think it’s good to have, but sometimes I find that to be overrated.

Irina: What do you do with the deals that you don’t invest in or refer to anybody else?

Mike: It’s really hard because what a lot of people say is, Can you make some referrals? Usually, that doesn’t work because what happens is they say, Well, are you going to invest? And I say, Well, no, but I think that this team would like to meet with you. And they say, Why are you referring me a deal and you’re not interested in it? >>>

Seed Capital From Angel Investors: Mike Maples, Founder And Managing Partner, Floodgate (Part 11)

By guest authors Irina Patterson and Candice Arnold

Irina: So, you really don’t have a lot of interest in the niche markets?

Mike: This is another view that we have that’s a little bit subtle, but we don’t talk in terms of available markets. The reason is when I can analyze the total available market, the market’s too obvious, and if the market’s obvious, then big companies are probably already going after it. >>>

Seed Capital From Angel Investors: Mike Maples, Founder And Managing Partner, Floodgate (Part 10)

By guest authors Irina Patterson and Candice Arnold

Irina: At what stage of a company’s development do you usually invest? Would you invest in a company that was just an idea on paper?

Mike: It varies quite a bit. We’ve funded PowerPoint pitches before, but generally speaking we don’t do that. Our basic belief is that if you consider the fact that the costs to go to market have gone way down, and the costs to experiment have collapsed to near zero, an entrepreneur should be able to demonstrate a series of experiments that they’ve already run. If it doesn’t cost anything to experiment, there’s no point in showing up to an investor with just an idea. >>>

Seed Capital From Angel Investors: Mike Maples, Founder And Managing Partner, Floodgate (Part 9)

By guest authors Irina Patterson and Candice Arnold

Irina: How many deals do you think you’ll be making over the next 12 months?

Mike: We’ll probably do somewhere between ten and fifteen investments.

Irina: How much do you anticipate you will invest per deal?

Mike: That’s good question. Typically, we invest between $250,000 and $1 million. It varies . . . very situational and dependent on the circumstances. >>>

Seed Capital From Angel Investors: Mike Maples, Founder And Managing Partner, Floodgate (Part 8)

By guest authors Irina Patterson and Candice Arnold

Irina: How do you conduct your due diligence?

Mike: That’s the hard part because Ann and I are little bit emotional in our investing styles. We believe that the greatest outcomes tend to be controversial when they’re funded. For example, Twitter was very controversial when it was funded because it didn’t have a revenue model. People were saying, You’ve got to be kidding me . . . 140 characters or fewer, no road map, no business model, they can’t keep the site up, what are you thinking? >>>

Seed Capital From Angel Investors: Mike Maples, Founder And Managing Partner, Floodgate (Part 7)

By guest authors Irina Patterson and Candice Arnold

Irina: Are there any other meetings that you have for entrepreneurs?

Mike: Sometimes we’ll introduce the entrepreneur to other people in our network, both to try to help the entrepreneur but also to assess the opportunity. But for the most part, if the phone call goes really well and we do a face-to-face meeting, forty-five minutes into the meeting, Ann and I will say, Hey can we just talk for a second?

And we’ll go into the other room and we’ll talk and we’ll either come back and say, This is great, we’re interested but we’re not ready to invest at this time, or we’ll say, We are ready to invest at this time. What needs to happen for us to figure out if there’s a deal to be done here? >>>