Continuing our series of “typical” meetings and individual investment strategies, here is what a typical investment might be aiming for. You can review our site for the basic investment criteria and parameters; but here I’d like to convince you that what we’re actually trying to do is invest in French stand-up comedians. Let me explain.
I was coming home from a meeting at a German Biergarten last Friday night and switched on NPR. It was a typical show where nothing obvious was happening, but what I heard elegantly answered a question I had been asked the previous day about the quality of angel investment opportunities in the Carolinas, and that also helps explain the kinds of investments we are trying to make in VentureSouth groups.
At our Asheville Angels’ new and prospective member orientation on Thursday, I was asked “don’t the really good entrepreneurs just leave the Carolinas and head off to Silicon Valley and raise their angel and VC rounds there?”
On NPR on Friday, I listened to Jerry Seinfeld telling a French stand-up comedian trying to be successful in the US, “You want to be a stand-up comic in America? That’s like you want to make cars and you’re going to Germany. Then you might go to Italy to open a pasta factory. Head over to France and you’re going to make wine. Or maybe to England and you’re going to write plays. America invented stand-up comedy. They are used to the best.”
This was a much more amusing answer than I’d given my interlocutor. Yes, entrepreneurs from the Carolina could (and sometimes do) decamp from the Carolinas to try to raise money in Silicon Valley. But when they’re there, many more become the stereotypical Hollywood actress-in-waitressing, competing against the most highest profile, connected, well-supported entrepreneurs, than become the next unicorn.
Being a stand-up comedian in France is difficult; being one in America is harder. Getting funded as an entrepreneur in Asheville, Aiken or Anderson is difficult; getting funded, against world class competitors, in Palo Alto is harder.
Does that mean we lose the “best of the best” entrepreneurs to Silicon Valley? Perhaps, though we have some truly world class companies and entrepreneurs in our portfolio. But that does not mean we can’t find really talented French stand-up comedians to invest in here in the Carolinas – and that both the entrepreneurs and the investors here can’t build great companies and make great returns here.
As angels, we are not deliberately aiming for the 1000x return and $10 billion IPO – the Jerry Seinfeld. They’re just too rare. We want to invest $500k in a $2 million (pre-money valuation) company in the Carolinas; help it turn its initial traction into a growing, profitable, and attractive business; and help it get acquired for $30 million in the next five years. Something between a mime and Le Dîner de Cons.