You know that feeling after a great first date? That mix of emotions – excitement, childlike giddiness, anticipation, nervousness… That spark can feel like pure magic.
Once the excitement wears off, the questions start to roll in. “Do they feel the same way?” “Will they text me back?” “Will there be an equally awesome second date?” “Is their mind racing to the future- marriage, kids, a happy life together – too?”
What’s striking is the similarities between dating and angel investing. Change the above context from “great first date” to “great first meeting with a startup,” – and the magic, the questions remain. Both involve taking risks, making connections, and ultimately finding the perfect match. Let’s explore why angel investing is just like dating.
“Love’s a (Numbers) Game, Wanna Play?”
‘You have to kiss a lot of frogs to find your prince.” “There are plenty of fish in the sea.”
Dating and angel investing share similarities as numbers games due to the inherent uncertainties and statistical probabilities involved in both endeavors. In dating, individuals often go through numerous interactions and dates before finding a compatible partner. Similarly, angel investors evaluate many startup opportunities, knowing that only a fraction will yield successful outcomes. Both activities require a willingness to take calculated risks, engage in iterative learning, and manage expectations. Just as in dating, where individuals must navigate various personalities and preferences to find a compatible match, angel investors must sift through many startups to identify those with the highest potential for success.
Just My Type
You have a “type” (tall, dark, and handsome, perhaps?) And you should have an angel investment thesis. Having a defined investment thesis can make you a more focused investor. A thesis is a carefully crafted framework that outlines one’s investment philosophy, preferences, and objectives. A well-defined thesis serves as a roadmap, helping angel investors navigate the myriad of opportunities by focusing on specific industries, stages of growth, or geographic regions that align with their expertise and interests.
In angel investing and dating, compatibility and alignment of goals are paramount. Investors look for startups whose mission and vision resonate with their values and objectives. Similarly, individuals in dating seek partners who share their values, interests, and long-term aspirations. The alignment of goals ensures a harmonious relationship and increases the likelihood of success, whether in business or romance.
Love at First Sight
Do you believe in love at first sight? It’s easy to get caught up in the excitement of a new relationship- but is it the real thing or just a fling?
The same goes for that amazing deck that just arrived in your inbox. Is it all flash and no substance? What really matters is the people, the product, and the proof behind it.
Angel investors typically want to meet founders in person before committing. The quality time spent together before the cheque is handed over is essential for both angel investors and founders. An angel investment is a long-term commitment- there is a real possibility that this relationship will last 7-10 years!
Founders and investors should spend quality time, work together, and have challenging discussions. Make sure you “vibe” with one another. Whether you are a founder or investor, you have the ability to say no. In some situations, you have to trust your gut. That’s why you wouldn’t sign a cheque after the first meeting. After all, you wouldn’t propose after a first date.
TLC (Tender Loving Care)
Relationships – whether romantic or business- take hard work. Relationships can’t thrive without some hard work, labor, and a bit of tender loving care.
Angel investors provide ongoing support, guidance, and resources to help the startup grow and succeed. Likewise, in dating, couples must invest time, effort, and emotional energy into nurturing their relationship in dating. Both require patience, commitment, and a willingness to adapt and evolve together.
“It’s not you, it’s me…”
“It’s not you, it’s my strategy.” This adaptation of the classic breakup line reflects the reality for angel investors when they choose not to invest in a startup. Rather than reflecting the startup’s potential or the entrepreneur’s abilities, it often comes down to the investor’s specific investment thesis, preferences, and strategic focus. Just as individuals in relationships may part ways due to differences in goals or compatibility, angel investors may pass on opportunities because they don’t align with their investment criteria or portfolio objectives. By emphasizing that the decision is rooted in their strategy rather than any shortcomings of the startup or entrepreneur, investors aim to maintain respectful and transparent relationships while staying true to their investment principles.
For founders, it is essential to remember that a “no” doesn’t mean your company won’t be successful. There are many ways to succeed, and sometimes investors are wrong. There is, in fact, always the one that got away. 😉
Risk-y Business
Angel investing, like dating, involves a degree of risk. Investors must assess the potential risks and rewards of investing in a startup. Similarly, individuals in dating navigate the uncertainties of relationships, recognizing that not every connection will lead to a lasting partnership. Managing risk requires a combination of intuition, research, and a willingness to take calculated chances.
“Til Exit Do Us Part”
It’s a long-running joke that an angel investment is like a marriage. It is an investment with a long time horizon, after all.
The relationship doesn’t end after the cheque is signed. It is quite the contrary. That cheque is the start of a beautiful friendship. Many angel investors are active investors- taking on a more advisory role in the company. The average time horizon for an angel investment is about 7-10 years, so it is “for better, for worse, for richer, for poorer, in sickness and in health til exit us do part.”
At first glance, Angel investing and dating may seem like unrelated concepts, but the parallels become evident upon closer inspection. Both involve taking risks, making connections, and finding the perfect match. After all, whether in business or love, finding the ideal match is a journey worth taking. Happy Valentine’s Day!
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