Brogan Search Partners’ Post

Venture Capitalist, Robert Antoniades reveals the factors he considers when evaluating an investment round and highlights the qualities that set Founders apart in today's competitive business landscape. #LeadershipInsights #VentureCapital #Recruitment #Hiring #TechStartups

The VC landscape has evolved to a strange place where acute decisionmaking or extremely delayed decisionmaking is the norm and this is really bad for everyone involved. Let me explain... When a startup goes to raise money and has both sophisticated founders and a good idea, they can usually get looks from VCs and angel investors. Now most of the time, VCs and angels will say "it's too early for us" which may or may not be true, but is a nice way of not having to tell founders their idea is bad. But once a founder gets an investment offer (especially from a well-known VC), other investors are now forced to do rapid Due Diligence because in order to get in on the deal they have to make an offer that's competitive and quick. This is bad for the ecosystem and as a Yoko Okano once mentioned, "investors can act like lemmings". The lemming behavior leads to lots of offers on pre-product startups that may or may not work out. Acute decisionmaking is the exact opposite of what early stage investing should be. Watching how founders react to adversity and how they adjust their product and GTM strategy can tell you a lot about their ability to build and grow a company. The other thing that occurs is when investors aren't forced to make a decision and instead wait and wait and monitor because there's no pressure. As far as this approach goes, I'm not an advocate for waiting around for 6 months to cut a $25k check into a pre-seed company. The takeaway is that investors need to have principals and stick to them and that FOMO as a reason to invest is a dumb one. You need to be contrarian and right which requires not following the crowd.

Whenever I hear the word "family" to describe a startup culture, I cringe. From an investor's perspective, it is crucial to maintain a clear distinction between the concept of family and the realities of business. Investors are not members of a startup's family; they are financial partners who have invested their money in the company with the expectation of a return on their investment. This means that investors have a fiduciary responsibility to their clients and must make decisions that are in the best interests of the company, even if those decisions go against the wishes of individual employees or founders. Learn more about this topic if you are a high-growth startup wanting to raise venture capital. Alph Keogh Jeff Broz Rikki Wardyn Achaiah P M Ashim Purohit Sudhir Bahl Kumaravel Subramani Manusha Chereddy Akshay Rai Vijayarajan Alagumalai Don Fowler B K Kulkarni Bharat Rao Sudip Nandy Maria O'Connell R. Scott Bennett Vivek Mehrotra Rohan Prabhu https://lnkd.in/eJECcE4x

Some good thoughts on the often not discussed topic of the value of capital from a tier 1 investor!

Equity: Your Stake in the Startup Adventure Imagine a startup as a captivating story, and equity is the golden ticket that grants you a front-row seat to this thrilling tale! Equity represents ownership in a company - a slice of the pie that entitles you to a share of its success, rewards, and potential future growth! What is Equity? Equity is like a magical thread that weaves together the relationship between a startup and its investors. When you invest in a startup, you're essentially buying a piece of its equity - becoming a valued partner on its journey to greatness! Why Equity Matters? Equity is the heartbeat of Angel Investing. As investors, it's our opportunity to join forces with passionate founders, support their vision, and align our interests with theirs. How is Equity Allocated? Equity allocation is a very important process that takes into account the startup's valuation, the investment amount, and the percentage of ownership each investor receives. Potential: Equity is more than just numbers on a balance sheet - it's a symbol of trust, belief, and collaboration. It's like investing not only in the company's financial future but also in its people and the vision that propels them forward! Celebrating Shared Success: Equity represents more than just a piece of ownership - it's a celebration of partnership. When the startup succeeds, we all succeed, and the sense of achievement is shared among investors, founders, and the entire team! Have more questions or want us to explore another Angel Investing term? Share your thoughts in the comments below. #leadangels #beyondangelinvesting #valuecreation #wealthcreation #equity

I’ve angel-invested in around 20+ companies in the last 4 years. 30% of them failed. Here are 3 lessons that I learnt in this journey 👇 1/ 𝐅𝐨𝐮𝐧𝐝𝐢𝐧𝐠 𝐭𝐞𝐚𝐦 𝐢𝐬 𝐚𝐬 𝐢𝐦𝐩𝐨𝐫𝐭𝐚𝐧𝐭 𝐚𝐬 𝐭𝐡𝐞 𝐢𝐝𝐞𝐚 In the initial stages of my investing journey, I overlooked the potential of the founding team and invested solely in the idea. Over time, I realised that the best business idea is equally as important as a strong founding team. A talented and committed founding team can overcome multiple obstacles, while 65% of startups fail due to co-founder disputes. 2/ 𝐍𝐨 𝐞𝐦𝐨𝐭𝐢𝐨𝐧𝐚𝐥 𝐝𝐞𝐜𝐢𝐬𝐢𝐨𝐧 𝐦𝐚𝐤𝐢𝐧𝐠 Previously, I often found myself overwhelmed with information, leading to emotional decision-making. Now, I prioritise confidence in the startup's growth above all else. Here's my approach to evaluating a startup's growth potential before investing: ✅ What is the size of the market for the problem statement? ✅ Can the idea potentially lead to a 20-50x venture outcome? ✅ Is the founding team capable of moving swiftly with both structure and speed? 3/ 𝐁𝐞 𝐢𝐧 𝐭𝐡𝐞 𝐭𝐡𝐢𝐜𝐤 𝐨𝐟 𝐭𝐡𝐢𝐧𝐠𝐬 As an angel investor, create an investment process alongside your investment. This way, you can understand what the founder is up to and how you can add value to their venture. Don't just make investments. Lay the groundwork for a firm-founder relationship. -------- 👉For first-time angel investors, it can be a journey of excitement, uncertainty, and a lot of new learnings. Be ready to learn, adapt, and evolve. Regardless of whether the startup succeeds or not, you’ll see yourself growing! #investment #angelinvestment #investor #angelinvestor

🚨 Avoiding Red Flags in Angel Investor Funding: A Startup's Cautionary Tale 🚨 As entrepreneurs navigating the startup landscape, we recently encountered a few red flags while in talks with angel investors. Sharing these lessons to help fellow founders dodge potential pitfalls in the funding journey: 1 Beware of Partnerships Over Investments After extensive due diligence, some investors pivoted, pushing for a partnership with a board seat rather than a straightforward investment. Founders, stay vigilant about aligning intentions and goals. 2 Investment Experience Matters If your angel investor lacks seasoned investment experience, it could mean endless negotiations and a steep learning curve. Money doesn't always equal expertise; choose investors who understand the startup ecosystem. 3 Demand Past Investment Details Always inquire about an investor's past investments, exits, and overall experience. It's your right to know about their track record with other founders and companies. 4 Conduct a Thorough Background Check Dig deep into your investor's background—industry experience, relevant skills, and potential contributions to your startup. Insights from past connections can be invaluable in making an informed decision. 5 Closely Monitor Intentions in Term Sheets Watch for changes in terms, of persistent control demands, or attempts to involve family and friends excessively. If an investor's intentions seem unclear or controlling, it might be a red flag. 6 More Than Money: Value Beyond Funding Look for investors who bring more to the table than just funds. Can they facilitate client connections? Provide marketing insights? Seek partners who add substantial value beyond financial backing. 7 Insist on Signing Shareholder Agreements Don't compromise on the legalities. Ensure your investor is ready to sign shareholder agreements or convertible notes, reflecting their commitment to your startup's success. 8 Don't Celebrate Until the Money Arrives Investor commitment doesn't guarantee funds. We learned the hard way—don't trust until the funds hit your company account. Keep exploring options and stay cautious until the deal is sealed. 🚀 Founders, let's share experiences and insights to empower each other in this journey! What red flags have you encountered in fundraising? Comment below! #StartupWisdom #AngelInvesting #FoundersJourney 🌐💼

In the dynamic startup landscape, founders frequently overlook the necessity of realistic exit strategies, which can be detrimental to their company's long-term success. Founders must consider crucial questions, such as: What happens in the event of success or failure? What is the financial threshold that would compel them to either persevere or walk away? How much are they willing to continue to pour into a company that is struggling when things get tough? How big of a check will they accept to hand over their blood, sweat, and tears?

Navigating Down Rounds: Strategies for Founders and Investors In the unpredictable world of startups, not every funding round goes as planned. Sometimes, market conditions, business challenges, or other factors can lead to a "down round" – when a company raises capital at a lower valuation than its previous round. Let's dive into what this means and how founders and investors can navigate this tricky situation. 1. Understanding Down Rounds A down round occurs when a startup raises funds at a valuation lower than its previous post-money valuation. This can be a difficult pill to swallow for founders and existing investors, as it implies a decrease in the company's value and can lead to dilution of ownership. 2. Reasons for Down Rounds Down rounds can happen for various reasons, such as: - Challenging market conditions - Missed milestones or slow growth - Increased competition - Unfavorable regulatory changes - Difficulty finding new investors 3. Impact on Stakeholders Down rounds can have significant consequences for all stakeholders: - Founders may face dilution and a loss of control - Existing investors may see their ownership stake diminished - Employees with stock options may find their potential upside reduced - The company's reputation and morale can take a hit 4. Strategies for Founders If faced with a down round, founders should: - Communicate transparently with investors and employees - Focus on business fundamentals and achieving milestones - Consider alternative financing options, such as venture debt or bridge rounds - Negotiate favorable terms, such as anti-dilution provisions or liquidation preferences - Use the down round as an opportunity to reset and restructure the company 5. Strategies for Investors Investors navigating a down round should: - Reevaluate the company's potential and adjust expectations - Provide support and guidance to the founders - Consider participating in the down round to maintain ownership and influence - Work with other investors to structure the round in a way that aligns incentives - Take a long-term view and focus on the company's future prospects 6. Success Stories While down rounds are challenging, many successful companies have overcome them Down rounds are a reality of the startup world, but they don't have to be the end of the road. By focusing on business fundamentals, communicating transparently, and aligning incentives, founders and investors can navigate these challenges and emerge stronger on the other side. 💪 #vc #venturecapital #downrounds #fundraising #investing #angelinvestor

I've raised $250M, and here's what you need to know before accepting venture capital:   1. Implement a no asshole rule. Investors on your board can range from being distractions to actively destroying value. For example, my board member Becky would constantly demand updates, visit unannounced, and engage my team without informing me. These are red flags. You don’t want an investor like Becky.   2. Avoid conflicts of interest. Ensure you are the sole company in your category within their portfolio. If an investor has already backed a competitor, everything you disclose could end up in the hands of your rivals.   3. Always check references by contacting other founders directly, bypassing the investor’s curated list. This direct approach often yields more genuine feedback.   4. Inquire about their history with founders, specifically how often they replace them. This will help you understand their approach to supporting founders versus hiring external CEOs. It’s best to ask this when you have a term sheet and they're about to join your board, not at the first meeting to avoid looking problematic.   5. Two key investor traits are crucial: choose a partner over an associate and someone with operational experience over merely academic qualifications. Startups face volatile situations where a seasoned partner’s clout and experience can be critical. Associates, less proven and under more pressure, might be too overbearing during challenging times.   6. An MBA who has never managed a company might lack the practical wisdom to provide effective support during pivotal moments.   A partner who has previously managed businesses is your ideal investor, combining strategic insight with practical experience.   If you have any questions about finding and working with investors, or about entrepreneurship in general, feel free to leave a comment below.   Check out my latest content on TikTok: [https://lnkd.in/e5Uzqprq). #venturecapital #venturecapitalist #vc #vcs #founder #startup #startuptips