Wearing a Halo – An Interview with an Angel

Wearing a Halo
An interview with an Angel

Little Pond Intro of our Interviewee – Jon Brandt

Jon Brandt is an American success story. He has built numerous businesses from scratch, through classic bootstrapping, and recently sold his latest company (NHA) to Private Equity.  Jon is part of a growing class of active angels, those seeking to provide some funding support (AKA – seed capital) while adding experience and knowledge capital to the table.  He joins the growing number of people that believe there is no solid advocate for the merits of investing in emerging or startup companies.   If Jon has his way, that will change in the next 5-10 years.

Big Pond

What do you enjoy about being an angel investor?

I enjoy assisting young entrepreneurs in developing their company.  Angel activity is an area where you can work with a young entrepreneur, guide them through the mistakes you’ve made in the past and hopefully help them avoid those same mistakes.  It also is an opportunity to look at a prospective business from a more strategic view since you’re not part of the day to day.

What advice would you offer to someone in the Big Pond that wants to get involved?

I think it is a great thing to do.  The investment is very interesting.  You can make a small investment and receive a big return.  I also like the idea of being on the board of a company; you can help without a huge time commitment.  You don’t have to be totally immersed in the company.  It isn’t for everyone but is good for someone that wants some control over their investment.  The risks are definitely there but the payoff can be good.

How much of a time commitment does it require?

I haven’t found it to be a significant time eater.  For Pogby, the company I’m currently working with, I have been involved about 10 hours per week.  I don’t want to be 100% involved in a company I’m investing in.  I like being included where I need to be but I like to work on the business, not in the business.

How much capital do you need to be able to invest?

Anywhere from $25k to $500k is probably the sweet spot for an angel.

What pointers do you have for finding your first angel project?

It is good to look at similarities to what you’ve done in the past, worlds you’ve seen before, familiarity with what the organization does and what its goals are.  It might not be the same industry but an understanding of certain aspects of what the company needs to go through from your own personal experience is helpful.

Any lessons learned?

It is important to be able to trust the CEO and believe that you’ve backed the right guy, idea, and company.  You hope to have a relationship with the CEO where he’ll listen to your ideas and where you can both challenge one another.  It is also nice to have collaborative partners in the due diligence efforts on the company to help make the decision easier.   With the Solidea team helping me go through this process, I know there is good collaboration and a better assessment of the big picture.

Little Pond

How has your experience as an angel investor compared to your expectations beforehand?

The one thing I learned about angel investing is that with pre-revenue companies it doesn’t need to be a huge investment.  Working with Solidea certainly helped to set my expectations so what I expected my involvement would be beforehand was right.

What are the emotions like working with a start-up?

I was an entrepreneur earlier in my career so it is like a walk down memory lane being involved again.  At the same time, I’m involved in the process and feel emotionally tied to the strategy of the company but I am not in the heat of the day to day.   It’s a perfect balance for me…I like the 30,000 foot view.

How could a CEO entice you to get interested in their company?

Through my relationship with Solidea I’ve been able to sit and hear pitches for multiple companies  and get a broader perspective of what is out there. The ones that felt right to me were the ones I wanted to be involved in.  I think angels have a different view from a VC.  To an angel, the character of the CEO and the character of their team is what gets us excited.  With the right team you can do anything.

What are some warning signs that make you not interested in a company?

It again goes back to the feeling you get from the CEO; are they just telling me things that they think I want to hear?  I’ve had pitches where people wanted me to invest in them but they were throwing numbers around that were impossible to achieve.  If they start throwing numbers around before they are able to achieve results or if they are going down a path to impress me rather than tell me what is really going on with a company, I’m not going to be interested.  I’ll sit through a PowerPoint presentation but they have to be short to keep my attention and they need to explain the reality of where the company is now.  Projections of where you want to be are important but you also need to tell me where you are now.

Very few people actually champion the emerging company asset class itself.  What about the asset class do you find exciting?

Getting a return on my investment is definitely one of the goals.  It is an opportunity to make a 30x number happen.  It is also the ability to get involved in the company and be a part of some of the decisions being made.

Jon’s Bio

Jon S Brandt— Strategic Advisor & Angel Investor

Jon is a hard driven, experienced leader and entrepreneur with experience in many different sectors. His most recent venture, National Healthcareer Association (NHA), which he founded and ran as CEO, was recently sold to Providence Equities in June of 2009.  For more information, visit his website: http://momentusventures.com/ His previous successes include:

  • CEO/President – Med Ed Inc, National Career Institute 1998-2004 — Three career schools sold to a strategic buyer.
  • President – Raw Energy, Inc 1988-1993 — Company acquired by a strategic buyer.
  • I apologise, but, in my opinion, you are not right. Write to me in PM.

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