Most angels who volunteer as mentors cite noble reasons to do so: “paying it forward”, “giving back”, educating the next generation of entrepreneurs, and so on. I love people who help others purely for altruistic reasons, and I hope such motives stay foremost in mentors’ minds. The more favors you do, the more come back your way. At AngelBootCamp on 6/14 in Boston, there’s a great session with Katie Rae (TechStars, Project 11) , David Skok (Matrix), Roy Rodenstein (HackerAngels, just back from mentoring in Russia) and Sean Lindsay (Founder Mentors) entitled “Preaching Words of Wisdom: The Art of Mentoring”. Every panelist is a terrific, experienced mentor.
But besides creating good karma, there is one other big benefit of mentoring at an Accelerator: it’s SMART BUSINESS for an angel investor. One of my first pieces of advice on the opening panel at Angel Boot Camp in Boston this Tuesday will be for any angel, new or old, to affiliate themselves with MassChallenge or any of the other great accelerators now recruiting mentors.
#1 Inside Track to Great Investments in Accelerator’s Startup Cohort
Last year, I remember attending my first TechStars Demo Day and being part of a feeding frenzy of investors looking to be able to get into the oversubscribed round at one of the standout companies. A number of angels—Joe Caruso, Jean Hammond, Will Herman—were already invested, and another, Dharmesh Shah, announced his investment by tweeting (OK, “Marginizing”) live during the demo. All that social proof created a ton of well-deserved excitement, and for most, if you were late, you were out. Then and there I realized that there was a demonstrable financial benefit to getting in at the ground floor with the startups at the best incubators. I was totally smitten with the event, but I also realized that a smooth, well-rehearsed 6 minute pitch was too seductive and too quick to prod for holes. (BTW—the good companies don’t always sell out fast: take the case of Occipital/Red Laser.) Being on the inside as a mentor means that you also can discern when to stay away from what might generally be acclaimed as a hot investment: I can promise you that you’ll never be able to do better due diligence on a startup or gain better insight into the founders than by working side-by-side with them during an accelerator program.
#2 Inside Track to Investments In Other Mentors’ Companies
I’m probably one of the more risk-averse angels, with a strong predilection for backing repeat entrepreneurs. And who better to back than fellow mentors, almost all of whom have started and ran successful startups prior to becoming angels and mentors. Last year at MassChallenge, I backed one of the startups (Pixability) run by an MC judge, and this year I plan to be backing a stealth startup being quietly put together by one of the TechStars mentors. That deal will never see the light of an angel group pitch, and it will be done totally with those angels who the founders know intimately.
#3: Community and Networking with other Mentors
I’m currently finishing up mentoring the Summer 2011 crop of companies at TechStars Boston. When you check out the list of mentors, you can tell that there are fantastic connections to be made. These connections aren’t necessarily mean just local—you might find Brad Feld or David Cohen in from Boulder, several prolific and experienced VCs checking in, or several of the NY mentors stopping by as well. Who better to help evaluate and discuss various investment issues than with your peers (or more often in my case, my superiors?) Just keep a lot of free meal slots available, and bring business cards. For instance, I ended up having dinner with Sean Lindsay (Viximo, Founder Mentors, etc.,) Fred Destin of Atlas Venture, and Harry Briggs from Balderton Capital, one of the leading VCs in Europe. Sean knows web engagement like the back of his hand, I found a slew of Wall St connections with Fred (yes, he used to be on the really Dark Side) and Harry brought a whole different global perspective on internet startups, in addition to stories about cricket, which we don’t normally hear around these parts. It was a great evening. Currently I’m looking to become more integrated into the Montreal startup community, so helping out as a mentor with Founder Fuel will give me an up-close view not just of the local startups, but also the regional angels and VCs. I can’t think of a better way than getting down and dirty with founders to find out from them who in the community is most knowledgeable and helpful to entrepreneurs.
It’s assumed that mentors are the ones dispensing wisdom to mentees. But it’s a two-way street. While one-on-ones are the standard means of mentorship, accelerators also provide terrific opportunities to learn via participation in groups. For instance, last month I sat in as a hot, VC-backed entrepreneur disrupting a big business gave a master class at an accelerator privately showing off the slide deck which he had just used to close a major B round of funding. The speaker fielded questions on what the objections were, what he handled well and where he might have lost points, gave tips on how he successfully managed old investors while bringing in new ones, etc. This was a fabulous, closed-door event where I was able to be the proverbial fly on the wall, just watching, all due to my involvement as a fellow mentor.
Equally important can be the small group meetings, where instead of one-on-ones, a handful of companies within a broad sector will meet. Last year I participated in the life science/healthtech group events, and was amazed at the amount I picked up from the companies. All of the entrepreneurs came with different perspectives into the industry, relevant resources such as lists of the best blogs, and insights as to what is coming down the pike in terms of new developments that hadn’t crossed my radar screen.
So, how to get involved? Contact your local incubators—at this time last year there were more than 100 and the number (and quality) continues to grow. Mass Challenge is about to start, and there are several ways to get involved. Your local incubator probably has something similar.
Here’s an excerpt from a letter I sent out to Massachusetts angel groups looking for angels to volunteer at MassChallenge. (I’m coordinating some of the angel sessions.) With 125 Finalists participating over the next 3 months (or you also can follow them via MassChallenge on AngelList), there’s plenty of opportunities to get involved.
There are four basic ways for angels to participate in MassChallenge:
1. “Open Office Hours”
Entrepreneurs will sign up for sessions to talk about issues facing their companies.
This is a great way to get to know a lot of companies and entrepreneurs in a short period of time.
Contact: firstname.lastname@example.org, (or just reply to this email) and we can start assigning time slots on a first-come, first-served basis.
Angels who want to take a relationship with one or more companies more deeply can apply to be a mentor.
The Chief Mentorship Officer is Karl Buttner
3. Group Meeting/ Event
These will either be arranged either via a business theme or in a pitch setting. Should the angel have some specific business expertise he would like to share e.g. cloud computing or financial technology, we would look to gather companies with an interest in this area to be led by the angel–perhaps a case study of a company you feel would be instructive, straight Q&A, etc.
Contact : email@example.com,
4. Investor Pitch “Master Classes”
This would be a public event open to all companies – to see 3-5 companies pitch to angels and receive feedback. This was done last year by about 40 companies, and was considered one of the most valuable learning experiences of the program.
Next week I’ll write about my latest angel investment, EverTrue. EverTrue is the TechStars company I have been mentoring, and they are raising a $1mm round. Most of that $1mm is already spoken before DemoDay, much of it by mentors. I don’t want to steal any of their fire, but Evertrue is a story of a classic lean startup blessed with brilliant execution. I’ve worked with them, talked to their customers, sat in on a sales call, and seen them successfully recruit talented developers in a tight market. The Evertrue story is due for a good long telling, and I’ll talk about it in the very near future.