Angels: Beware of Some Entrepreneurs
In our line of work we see every type of entrepreneur there is, here’s a few we were able to profile.
Paranoid Entrepreneur. This entrepreneur is scared of their own shadow. They call you over and over to discuss their idea but never tell you what it is. They talk about their best friend whose idea stolen by investors. They tell you that their invention/idea will change the world. They ask you to sign an NDA but never get around to sending you anything.
Harvard Entrepreneur. This entrepreneur has a degree from Harvard, which they value immensely. They are brilliant in their own mind but can’t find the coffee shop that you have met with them at three times previously. They want your money but not your advice and input.
Selling to Google Entrepreneur: This entrepreneur entire business plan is selling their business to Google. They point out that Google has purchase over 800 companies in the last four years. They can’t describe their product or market, just that Google will purchase the business. Be especially careful if their company is a medical device company.
Like Facebook Entrepreneur: This entrepreneur has an idea for a company just like Facebook but for seniors, artist, cowboys, cowgirls, etc. Their business plan consists of membership dues, advertising and product placements. They will attract their customers via viral marketing, but can’t articulate why we need another social media website.
Drinking Their Own Kool-Aid Entrepreneur: This entrepreneur is an advocate for social change via their business model. They live and breathe their product and market. They testify to anyone that will listen. When making an investor pitch they lecture the investors on how smart they are and how dumb the investors are if they don’t do a deal with them.
My IP is Very Valuable Entrepreneur: This entrepreneur believes their idea will change the world and they should be compensated as such. A typical deal proposed by this type of entrepreneur is they own 95% of the company, investors 5%. The IP for the company is held by a separate company owned by the entrepreneur. The company which has been funded by investor money pays a royalty to the entrepreneur owned company. And, the entrepreneur gets paid a salary of $250K. Not many of these deals get done.
Has Been Entrepreneur: This entrepreneur hit it really big 15 years ago. Their last venture backed company blew up big time. They float between technology providers and venture capital funds lending their expertise for a fee. They have lots of deals in the works but can’t raise money for any of them. Of their deals, they don’t have the time or money to move the company forward but they do want an ownership stake and a salary for their efforts. Hangs out with the Has-Been-Angel, and together they are planning world domination. Enjoys a good drink as long as someone else picks up the tab.