Dan Somers: From Serial Entrepreneur To Turning The Tables On Traditional Models Of Angel Funding
You Want Money? Management First, Please!
By Modwenna Rees-Mogg, Founder & CEO of AngelNews
How throwing out the angel funding rule book can boost entrepreneurs’ success rates and investor returns alike.
Many of you might have come across Dan Somers. From a career in management consultancy he became a serial entrepreneur before turning to angel investing. Today, based on his experiences of how challenging pre-venture capital funding can be (from both an entrepreneur’s and an investor’s perspective), he has decided to turn the tables on the traditional models of angel funding. What he is doing is fascinating, not least because, whilst it’s early days,...
...it appears to be working.
You may be familiar first-hand with the typical world of angel funding: ‘Dragon’s Den’ style meetings or events with a motley of entrepreneurs from all kinds of sectors, and with a wide range of experiences and capabilities. From an angel’s perspective the challenge is sifting through the ‘world’s worst ideas’ and flaky also-rans to the quality investments and unpolished diamonds. From the entrepreneurs perspective, the challenge is to try to rise above the noise, and strike a chord with one or more angels who ‘get it’.
Eventually there is an offer. A round of meetings commences, intermingled with a bit of due diligence. Term sheets or offers appear on a table somewhere, at some point; terms are negotiated, lawyers get involved, the angels write a cheque and get something resembling a share certificate and a shareholders’ agreement in return, possibly accompanied by some paperwork to do with EIS (Enterprise Investment Scheme). Some champagne might flow. But the end result is that the angel is now an investor and the entrepreneur can buy a new pair of socks. Hurray!
Of course, this is where the real challenge starts, not ends. Give me an angel who has never seen... continued on page two >