So my husband is a bit of a foodie, and he loves to cook. (Did I win the husband jackpot or what?) I asked him, how do you decide what pot to use when you are cooking? His answer: It depends on what you’re cooking.
Yes, given the title of this blog post, I’m about to create a metaphor for artists seeking angel investors using pots and kettles. You, the artist, are an entrepreneur. It is time to start thinking of yourself that way, because calling yourself a delicate teapot is significantly different from being a black kettle. For one, a teapot could never do the heavy work a black kettle does. When an angel investor evaluates you and your idea for funding, he is going to test your mettle. You need to be tough enough to do your job, and able to withstand a long and heated journey. And secondly, perhaps a delicate teapot does not need an angel investor. Delicate teapots tend to come from money.
Creative entrepreneurs need money. It takes time, resources, and even technology to create a body of work. And before you think I’m finished with my metaphor, I’d like to point out that when an angel is looking to invest in a creative entrepreneur, he will be looking for an idea that has both scope and scale. In other words, angel investments depend on what you’re cooking. The lone artist trying to get funding to paint a mural on a dilapidated building is not likely going to find an angel investor. There isn’t any return on investment in small ideas. The pot is only half-full. However, a lone artist who has a vision to paint ten murals on a selection of inner city buildings, while teaching neighborhood kids how to paint just might attract an angel for their project. This is a pot full of possibility, able to feed many people. And before you think this stands in the realm of non-profit funding, think about how much exposure is created by that kind of project! A creative entrepreneur can solidify their standing as an artist, build up their personal brand, and sell more artwork in the future. That doesn’t mean your ideas always have to be grand, but they do have to offer a way for the angel investor to profit from their investment.
Angel investors evaluate and consider many other aspects of your business idea. As you have agreed to call yourself an entrepreneur from here on out (or you must stop reading…), you must consider the professional framework angel investors often use for evaluating an investment opportunity. The Harvard Framework takes in to consideration four aspects of an endeavor: the people, the deal, the business opportunity and the context of the endeavor in world at large.
So, when your black kettle is cooking with a great idea, there are a few questions to ask yourself.
Who is on your team? Include yourself in this evaluation, since you must bear the weight of the proposed project. Consider your stakeholders and who will support you in your endeavor.
What are you offering your angel investor? Consider the price and structure of the deal.
What is the opportunity created by cooking this idea? Consider timing, the customer, scope and scalability of the idea, and the business model you will use.
And finally, is the world ready for your idea? Consider your great idea in the context of the world at large. Think economy, technology, regulations, competition, customer need.
Some angel investors only look for creative projects. They are looking for your kind of black kettle, and if you’re good at combining quality ingredients, then an angel investor might just like what you’re cooking!
This post was inspired by the book Winning Angels: The 7 Fundamentals of Early Stage Investing by David Amis & Howard Stevenson.