Women In Business

Angel investor of the year’s tips for attracting investment

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Jessica Andrews (Marketing and Communications Coordinator at the Business Funding Show) speaks to UKBAA Angel Investor of the Year, Meganne Houghton-Berry

Meganne Houghton-Berry, an angel investor, NED and startup mentor, was awarded with the title of the UK Business Angels Association’s Angel Investor of the Year for 2017-2018. Originally from New York, she currently sits on the boards of several UK startups and is an active member of several UK- and US-based angel networks. She values having a woman co-founder in companies she invests in and looks to bring her expertise in tech and consumer marketing to startups.

In this interview conducted by The Business Funding Show, we learn about what entrepreneurs should know about angel investors as well as how business women can become angel investors.

1. You opened MHB consulting in 1995. What inclined you to join the consulting industry?

I actually started my career in management consulting, and after years in the computer industry, returned to consulting.  I have always enjoyed working with a range of different businesses which has proven very helpful for angel investing!

2. You were a Finalist for the UK Angel of the Year in 2015 and won the title of UK Angel of the Year in July. What led you to this point?

It was an honour to win, and I hope it is a reflection of my commitment to working in the start-up community, as both a mentor and investor.  I hope I can act as an inspiration for other women looking to become angel investors, and encourage people to take a portfolio approach to angel investing that looks beyond just the ‘next Google’ to include areas such as social impact investing.

3. Your funding criteria show that you prefer investing in early-stage companies. Why is this?

I enjoy working with the founding team as they refine their business model and pursue early traction.  I am happy to take the investment risk at this stage – which not all investors are prepared to do – and I think it is critical to the startup ecosystem to have experienced investors supporting very early stage companies so that we have a good base of potential high growth businesses.

4. What should entrepreneurs focus on in order to attract investments from angels in particular?

Investors want to know that you understand the business you are in, that you have a clear view of how you can make money in that business and what the key metrics you need to monitor and prioritise are for the business.

5. Do entrepreneurs have any unrealistic views about angel investors? If so, what are they?

Some entrepreneurs don’t understand or value the experience and background of their angel investors.  Some just want to cash the cheque and be left to get on with things.  The best angel investors are those that bring knowledge and perspective to support the business, especially in the early stages.   Sometimes it is specific industry knowledge or potential client contacts, sometimes broader business experience that can help founders prioritise and focus on driving the business.

6. How can a startup get you excited and willing to commit to their product, service or idea?

Number one for me is the team – their passion, commitment and integrity.   Moreover, I look for entrepreneurs that are good listeners, but also decisive.  It sounds a bit hackneyed to say it is all about the people, but frankly, there are a lot of good business ideas out there.  Only a small percentage will go on to be great businesses, and it takes a unique founding team that can execute with determination but also flexibility as there will be a lot of roadblocks along the way.

7. What role do you typically take on in companies you have invested in?

I always make myself available as an informal advisor, and in some businesses I will take a more formal Board role.  I always encourage entrepreneurs to keep a good ongoing dialogue with their investors – at least quarterly updates and if possible at least one or two face to face meetings.  If investors know what challenges or opportunities you are facing, they can draw on their contacts and experience to support the business.  And most investors enjoy being part of the journey of the company.

8. Are there differences between how men and women invest in companies?

If I had to make a generalization, I’d say women might be slightly more cautious as investors, particularly when they are first starting out, unless they come from a financial background or are investing in an industry they know about.

9. You told entrepreneurs in Entrepreneur Academe to ‘Stay lean for as long as you can.’ What do you mean by this?

Try to get the business established without spending too much cash until you have proven your model and are getting traction with the business.  Investors look at what milestones you are able to achieve with each round of funding – so maybe early on it is getting your MVP in the market, or signing your first 5 customers.  The more time you have to do this before needing another round of funding, the stronger the business will be for the next fundraising (and then the higher the valuation it can justify).

10. What three tips of advice would you offer females who want to enter the industry as an angel investor?

  • Decide what you hope to get out of angel investing – it is a highly speculative asset class, and you have to go in prepared to lose what you have invested.  So angels do it for more than the potential return.
  • Decide how much time you can devote to your portfolio companies and/or what support you might be able to give them. For example, if you are a digital marketing whiz, you will have loads to contribute to consumer oriented companies, so maybe focus your investments in these areas to start, where you will be able to judge whether their go-to-market approach makes sense or not, and be there to help them plan their marketing approach.
  • Join one or two angel groups – it is a good way to learn from others, and you will see lots of potential businesses that have already passed one form of screening.

Interested in meeting Meganne or finding out more about how you can obtain angel investments for your business? Meganne will be participating in the One-to-One Investment Clinics at the Business Funding Show (BFS) on February 22nd in London. BFS is the only funding exhibition in the U.K. and E.U. and is here to help you understand all your options through meetings with investors, panel talks, an exhibition and an exclusive post-Show networking reception.  Find out more and secure your ticket at BFSexpo.com. Follow the Business Funding Show on Twitter here. Follow Meganne on Twitter here.

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