All products featured on WIRED are independently selected by our editors. However, we may receive compensation from retailers and/or from purchases of products through these links.
This article was taken from the May 2012 issue of Wired magazine. Be the first to read Wired's articles in print before they're posted online, and get your hands on loads of additional content by subscribing online.
Angels fill the gap between cash spotted by friends and family and the investment of venture capitalists. Tom Hulme, entrepreneur, design director at Ideo and investor in firms such as Smarkets and Wonga, explains how to get his backing.
Get in touch
Sites such as Angel List and LinkedIn are a good way to find angels who invest in your sector. Once you're inside a group such as the Cambridge Angels, the network effect is powerful. "The bulk of work I do is through referral," says Hulme. "You get referred into that network, and then you can pitch to all the angels. And that process of referral means there's social equity on the table."
Answer the questions
When you meet an angel, you may be bombarded with questions. "You'll think, 'All that Tom cares about is the idea'," says Hulme. "But actually I'm doing it to find out about you -- how flexible you are, how open-minded, how ambitious, whether you've got a team with a complementary skill set."
Build a team
"I never invest before the team is in place," says Hulme. "And I stress test the relationships. Does everyone defer to one person?
If you challenge one of them, do the others support?" And he's he's unlikely to invest in lone entrepreneurs: "Individuals aren't as motivated."
Earn your stripes
Hulme prefers to invest in serial entrepreneurs, no matter how well or badly their first business went. "We live in a time where there's no excuse for not actually trying something. If you or I were at university again and decided that we wanted to be entrepreneurs, it would be unforgivable after that not to try something entrepreneurial."
Image: Shutterstock.com
This article was originally published by WIRED UK
