How actively involved are angel investors with their portfolio companies?

Sonja Hoel Perkins / May, 2018

Description

Sonja Hoel Perkins, Founder of Broadway Angels explains the different degree of involvement that she has with her 30+ portfolio companies. She also mentions why some entrepreneurs seek out advice from their angel investors before they go to the board.

Video transcript:

How actively involved are angel investors with their portfolio companies?

It depends on the entrepreneur. It depends on the market. It depends on where my skill levels are needed and also where I can add value. For some, I spend a lot of time. I’m on the advisory board of companies like Rocksbox and UrbanSitter. I’m on the board of a company called One28 Technology, which is a company that is fixing a lot of the problems with IP and networking. I know those spaces, and I really like some of these entrepreneurs who have been very open and willing to ask for my advice.

There are some investments that I have made especially the ones that have been referred to me from other angels or maybe I have a conversation once a quarter or get an email or update and things like that, so it really depends. You don’t want to spend too much time with the entrepreneur. They have work to do. It is a delicate balance. Sometimes it’s more and sometimes it’s less. I would say that pretty actively, I talk with at least some of my 30 portfolio companies on a weekly basis.

One of my angel investments who also raised venture capital and had a former board, he said ‘You know, I tell my angels more of my issues than I tell my board.’ As a former venture capitalist of a big fund, I asked the question why? He said, ‘Because my venture capitalist can fire me so I’m not going to ask them for personal questions that maybe I don’t know the right answer to, because they are looking for me to be the CEO, but for my angel investors, I’m more than willing to share all of my issues and concerns because I want to get help.’

Again, it is another interesting balance with venture capitalists and angels because angels can provide a lot of value. In an odd way, they have no control. They can’t hire or fire the CEO, their a small investor compared to the while cap table so they have no control or ability to change other than their own opinions, so they can be even more helpful than the venture capitalists.

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