Want to be an Angel Investor? Write checks!

Email marketing pioneer Joshua Baer

According to Things Angels Bring To The Table, the typical angel investor is male, with an average age of 48-59 years. He is college educated and, often times, possesses a graduate degree. The majority of angel investors, about 80%, have some form of entrepreneurial and industry experience. They are often successful self-made millionaires, with a net worth between $1 million and $10 million. The typical angel investor can invest from $25,000 to $250,000 per deal; however, the amounts may vary and can be much higher (anywhere from $150,000 to $1.5 million).

Joshua Baer is a younger version of this profile, an entrepreneur who has made approximately fifty tech investments over the past five years.

Joshua is an email marketing pioneer. In 1996, in his college dorm, he founded SKYLIST as one of the first email marketing companies. In 2004, he created UnsubCentral to help email marketers comply with regulatory requirements. And in 2008, he co-founded OtherInbox - which he calls the cure for email overload.

"I love getting involved with email companies," he says with passion and an engaging smile.

If you want to become an Angel investor, his advice is simple and direct. "Start writing checks to startups and not too large in the beginning. It won't take long for other angels and startups to find you." And, Joshua does more than just write checks. He spends his days and evenings expanding his network the old-fashioned way by attending events for investors, speaking on panels and meeting start ups and other angel investors wherever he can.

In addition to networking face to face, Joshua finds the AngelList site started by Naval Ravikant as an incredible resource for investors, startups and connectors, like himself, who brings the two groups together. (We'll share more about AngelList in a future post.)

"I consider myself a super-mentor," Joshua says. He defines that as an angel who brings in a network of many other mentors and investors. He has taken "super mentor" to another level as the founder of Capital Factory.

Capital Factory is an early stage accelerator program for tech startups that provides a small amount of seed capital and weekly mentoring sessions by entrepreneurs who have founded successful companies. "Aspiring entrepreneurs want to talk to other successful entrepreneurs who have been through it before," said Joshua. "Startup companies apply to participate in our 10 week summer program intended to get a startup pointed in the right direction with a clear path to profitability and growth".

While the main focus of the program is one-on-one time with the mentors, Capital Factory and select partners provide the following resources and benefits:

  • Up to $20,000 in cash
  • Weekly group dinners with a speaker
  • Investor introductions
  • Basic IT infrastructure for email, website, version control
  • Office space downtown
  • Company formation and legal documents
  • A logo and corporate identity if needed
  • Service provider introductions
  • Press support

Access to Capital Factory is designed to accelerate a company that would be successful with or without them Joshua says. How it works is five startup companies are selected. There are 20 mentors who provide up to $1000 to each of the five companies. Collectively, the mentors receive a 5% stake in each of the companies.

"We do this because we want to," Joshua points out. "All of the mentors are successful entrepreneurs who have many options about how to spend their time. We mentor startup companies because we enjoy it. Having an equity stake in our companies makes it more fun but our primary motivation is meeting young entrepreneurs, not squeezing as much money out of each deal as we can."

First-time entrepreneurs want to ask questions of successful entrepreneurs. Successful entrepreneurs like investing in young entrepreneurs. Entrepreneurs of all kinds thrive on each others' passion.

If you have been or are a successful entrepreneur and you have the desire, capital, time and expertise to share, there's never been a better time to spread your wings.