Start Up Blog

What do investors invest in?

While dropping into Startup Camp in Melbourne last week I started chatting with Jonathon from Melbourne Angel Investors. I asked him just one question:

What is more important in their investments, the team or the concept / product?

His reply was a simple one and here it is:

We’d invest in an A Grade team with a B Grade product, but we wouldn’t invest in an A Grade product with a B Grade team.

Startup blog agrees. Though I did here that he was pretty ‘anti-tech’ as far as their investments go…

But the first piece of advice is worth adhearing  to. Above all things build an A Grade team, be an A Grade entrepreneur.

And so again we hear that the people in your startup are way more important than the secret sauce. It is without irony that A Grade teams more often than not find A Grade ideas too.

2 Responses

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  1. Erik said, on October 7, 2008 at 11:01 am

    Google doesn’t find “Melbourne Angel Investors”. Are they an official organization or just a loose group of individuals? How can I contact them?

  2. Tom Howard said, on October 7, 2008 at 11:29 am

    http://melbourneangels.angelgroups.net/

    They charge $125 just to submit a funding application.

    As a startup founder starting to explore funding options, this seems really arrogant and turns me off approaching them. I’m sure I’m not alone in thinking this, and I’d say they’re quite likely missing some great investment opportunities because of it.

    Startup funding should be a 2-way street: they provide funding, experience, mentorship, etc, you provide the business concept, tech expertise, opportunity for them to make a truckload of money if it goes well. To ask $125 for the privilege of talking to them puts the relationship off balance from the get-go.


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