I have been focusing a lot on writing about Entrepreneurs, entrepreneurship and what does it take to succeed as a startup. I think one of the key links in the sustainable startup ecosystem is a steady flow of capital into the startup ecosystem. Typically, in other regions an entrepreneur who has an exit invests the money back into the startup ecosystem and I think that is the sustainable way, so how do you do this when there are no successful exits? or if a region is just starting up or has had a collapse like what we have experienced in Iceland? We need a some Angels, who are willing to invest in a team and are willing to work on making that team succeed. I believe that is what Me and my partners did when we first invested in CLARA in late 2009. I met the team when they did not have a product or a market fit and I mentored them to be investment ready. The jury is still out if they will survive the onslaught of the market but I believe we have a great team and a good market that we have found a fit for our product. Now we just need to execute a repeatable business sales model. Anyways, I digress.. the key is to get new investors into the game. How do we do that? Just like we need new teams to jump into the startup bandwagon we need new investors as well. We cannot always rely on the usual suspects, i.e the Angels who have invested before and continue to participate.
New investors jump in only when they trust a system that is conducive for investing and has a clear education and track record, which according to many people is not the case in Iceland. I disagree but then again I have a long term view of the world so I tend to see things in a lot broader horizon than most people. Yes, there are a lot of challenges, the foreign currency control is a drag, the new bureaucracy in a pain, getting access to capital is even harder than it usually is et cetra et cetra et cetra… but I reject all these notions. They are only important if you are speculating in the short to medium term, I think we need to involve a new breed of investors in Iceland who take a long view i.e 10 years or longer and are not afraid of investing in that time horizon. It does not mean you invest, lock the box and throw away the key for that time period. We need active participation of the investor group in the companies that they have invested in making significant progress in the short term, medium term and long term. We need a community of Investors who can share, learn and contribute to improving the investment climate in the region they are part of.
There are a number of examples of how one put this community together. I got connected in Facebook to John Sechrest who has organized many Angel Conferences and formed Angel Investor groups to invest in a startups. I want to organize an event that is focused on Angel investors. There is a lot of debate on whether rise of Angel investing is bad or good for the startups, all this is heresy. I believe there is a role of Angels and VCs and everyone in between to make a sustainable startup ecosystem to function. What do you think? do you have any ideas or suggestions on how we can get new investors to participate in investing in Startups?
- Is crowdfunding good or bad for angel investors? (medcitynews.com)
- 7 Things (startupiceland.com)
- Three Free Things Every New Startup Should Do (nibletz.com)
- How To Find The Right Investors For Your Startup (grasshopper.com)
- European Startups Need To Get A Valley Education, And Fast (techcrunch.com)
It seems to me that there could be some more outreach to investors with money already in the country due to the currency restrictions. I’ve worked with investors who are looking for good ways to invest their money while they wait to see what happens with the capital controls, and they’ve often chosen real estate over anything else. Convincing them to stay for the long-term would be the next hurdle.
Also, what about having a kickstarter for start-ups here?
I am wondering if it might perhaps be difficult for new investors to approach the startup community. Maybe there should be a better flow of information about young startups and about the pros and cons of investing in startups. That might help smaller investors make a decision. I would also be good to have some investors that have exited share their stories.
Yes, you are right… going to work on putting together a Angel Conference much like
http://www.seattleangelconference.com/ right here in Iceland, John whom I referred in the email is the one who organized it. It takes about 6 months to put together but I want to organize this before Startup Iceland next year.
But why not start with a website that connects investors to the start-ups here (presumably ones that have met a certain threshold of due diligence) — it could serve as a platform to introduce specific Icelandic start-ups to the public within a centralized location, and also provide micro and macro financing possibilities.
Startup Reykjavik is the Kickstarter for startups, yes we should meet up for coffee why don’t you email me and we’ll find time.
Yes that is one way and that is what I am also tending towards. Karolinafunds.com is a team I like and see how they take their ideas forward.
Sent from my iPad
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