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)