Billions With Zero Knowledge

Kara Aaserud wrote an interesting piece in Canadian Business Profit Magazine about the relationship between angel investors and the companies they invest in.

Ben Yoskovitz, Fred Ngo and I are mentioned in the article.

Combine those two interests, and it’s easy to see why angels often want an active role in management and decision-making. Such a high level of engagement makes finding an angel who is aligned with your vision and business goals as crucial a task as perfecting your investment pitch. Austin Hill, a Montreal-based investor and serial entrepreneur, says the most common mistake business owners make is treating private-equity financing as a mere business transaction. “I had one entrepreneur show up at my house on a Saturday morning, shove his product in my face and ask me if I was ready to invest,” says Hill. “Entrepreneurs need to understand it’s a relationship, something they should begin nurturing well before thinking of asking for money.”

For Benjamin Yoskovitz, CEO of Montreal-based Standout Jobs Inc., developing that relationship began with volunteer work for BarCamp Montreal, a conference for the city’s bustling technology-startup community. That exercise led to chance meetings with Fred Ngo, his eventual co-founder and chief technical officer, and Hill, who became one of his investors and chairman of Standout Jobs, which develops Web-based recruiting tools.

There are some additional quotes from both Ben and I where we discuss the importance of aligning common vision and having good communication with your investors.

Getting the right angel investors is one of the most critical decisions an early stage company can make.   It is one of the reasons I’ve criticized the speed dating approach of obtaining investors that is showcased on the CBC show Dragon’s Den. The show is good for entertainment - but it is still just TV.

While the market for angel investing in Canada still has a lot of maturing to do I am very optimistic about the organization of angel investors into funds, networks and the exchange of best practices that is beginning to occur.

On Mon 21 Apr 2008.