Welcome to Angel Interviews, a series dedicated to debunking the assumption that entrepreneurs need to look outside of Philadelphia for angel and early stage investment. Every so often we’ll interview a local angel and ask him or her about investment criteria and how to get in contact. If you’re an angel investor that deals primarily with technology companies or you have any suggestions about how we can improve this series drop us a line.
Speak to Valerie Gaydos for a few minutes and you’ll see that she is all over the map in more ways than one.
Gaydos has worn multiple hats in her career as a publisher of a venture capital trade publication, the owner of a government relations consultancy in Harrisburg and, most relevant to Technically Philly readers, she serves as director of the Angel Venture Forum.
The forum is an ad-hoc investor group that, instead of holding meetings and investing on a rolling basis, the forum hosts a yearly event where 30 companies pitch to a selected group of angel investors. The Forum was founded in Philadelphia and will be held in Washington D.C. for the first time this year.
“Its taking the network I developed in Philly and expanding it to the DC area and the folks I know there,” says Gaydos.
As a result of her work with the Forum the “semi-retired” Gaydos oversees or is involved in a handful of deals every year in many Mid-Atlantic cities including Philadelphia where Gaydos can often be seen camping out at the Union League.
In this Angel Interview, Gaydos gives one tip for entrepreneurs to find the right angel and shares how she evaluates deals.
What sector do you typically invest in?
I’m in a couple of different places. Mostly technology, mostly software. I have invested in some consumer products. You get a better return with high-tech because it is much more scalable that consumer products.
How many deals do you do a year?
I try and limit it to one a year, though there have been years I’ve done two. That doesn’t mean I’m not involved in other deals where I work with companies as a volunteer until I’m comfortable writing a check. I’m very open to putting in my time and effort first, helping with business development and using my network. I find I’m doing that more and more.
It sounds like you subscribe to the school of thought that angels should be very hands on.
I really think so. The real disappointed investors are often the ones that write checks and walk away and then expect the company to succeed. The nature of a young company is that they are like kids. They can benefit from some guidance.
What do you look for in an investment?
You do look at the jockey, not the horse. You judge the entrepreneur on their personality and their ability to be coached. If they can’t be worked with, it is just not worth the money to invest.
I also like when companies come to me and they have done their research about my areas of expertise and how I can help. That’s how I know a company isn’t looking for a handout, they are looking for smart money.
We’ve heard local entrepreneurs say there are not enough investors in Philadelphia. Investors say there are not enough entrepreneurs. Where do you fall on this spectrum?
Either they’re both wrong or they are both right. I see a lot of really great companies and I see a lot of really talented investors and I think that they are not communicating and I don’t know why.
The nature of the most active angel investors is that they will never call themselves an angel investor. Most investors will talk about the businesses they are running before admitting that. There are probably many investors under the noses of local entrepreneurs but the entrepreneurs aren’t asking the right questions.
What advice to you have to entrepreneurs to close this gap?
When you network look for people who will help your business first.
It’s the old entrepreneurial adage: “Ask for advice and you’ll get money. Ask for money and you’ll get advice.”
Exactly. I think that hits it right on the head.
How can people get in touch with you or the forum if they have a pitch?
Go to AngelVentureForum.com and that has all the contact information for the forum, including mine.
Knowledge is power!
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