“What we want to do is create an educational platform for professional development,” he said. “Everything from writing term sheets and doing due diligence to good governance and using technology to track investments.”
But the startups aren’t always so eager to take their money.
If angel investors don’t have a background in the tech startup world, they often end up doing more harm than good, said Debow, wearing a hoodie in a crowd of mostly middle-aged investors dressed in suits at the NACO conference.
Sharing Knowledge
Angel investors who aren’t comfortable with technology often try to minimize their risk by asking for expensive deal terms or demanding guarantees about the future of the business that aren’t realistic, Debow said. Overzealous angels can end up taking too much of a founder’s time, distracting them from running the startup, he said.
Debow is part of a growing group of Canadian tech entrepreneurs-turned investors, including PlentyOfFish Media Inc. founder Markus Frind and Hootsuite Media Inc. CEO Ryan Holmes, that are building their own network of angels modeled after Silicon Valley’s close-knit community.
The most promising startup investments are getting scooped up by professional tech investors -- often from the U.S. -- before inexperienced angels even hear about them, said Debow, who’s also an angel investor.
“Don’t think you’re so clever if you’ve got this deal where there’s no competition, it’s a good signal that it’s probably not a great deal,” he said.
There’s still room for angels who don’t know a lot about tech, but bring other business experience, said Karen Grant, executive director of the Angel One Investor Network. By banding together and sharing knowledge and networks, inexperienced angel investors can make up for their disadvantages, she said in an interview at the conference.
Come Together