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Forbes Books presents the Startup Science Podcast with Gregory Shepherd,
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brought to you by Startupscience dot Io. Greg is an
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entrepreneur who's built and sold twelve businesses, a recipient of
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four private equity awards, featured ted X speaker and ben
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Bella Publishing and Penguin Random House author. Here's Gregory Sheppard.
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I'm back with Patrick Gouin, the CEO of the Angel
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Capital Association. We've been discussing his journey from aerospace engineering
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to leading an organization that represents over sixteen thousand Angel investors. Patrick,
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let's talk about risk from both perspectives, the investor and
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the entrepreneur. Starting with the investors, how do you think
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about balancing risk and opportunity when evaluating potential investments? Then
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let's shift to the founder side. What are the risks
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for founders when taking money from outside investors?
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Yeah, so there is all kinds of risks, right, I
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don't think anybody would disagree with that. And the further
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along the company goes, the more they should be de risking.
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But also they're taking on new risks as they scale
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up and you know, build the manufacturing facility or whatever
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it may be. So what I think many people don't
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understand is to be successful in the angel space, it
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really is about diversification. You've got to have a certain
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number of portfolio companies. Remember we said earlier that even
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the best are gonna, you know, fail fifty percent of
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the time. So if we take an absolute minimum portfolio
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size of ten companies, right, and we say, okay, five
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of them we're going to write off. But at the start,
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we don't know what five, two or three of them,
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maybe we're going to return our money, but one or
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two is where we're gonna, you know, really make this
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work for us. Uh. If you think about it in
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that little example, that means that each and every one
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of those opportunities has to have at least a ten
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x return, and if it doesn't, you're probably not gonna
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get the overall returns that you need. And so often
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I see entrepreneurs come in with a higher valuation than
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maybe what is realistic for the particular time and part
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in the country, and they say, well, I can get
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you a three x return in three years. It's almost guaranteed.
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I mean, many angels would look at that and say, well,
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that's nice. But you know, again, if I'm gonna, you know,
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value your company at ten million. I got to be
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thinking what's the probability of that getting to one hundred
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million dollar exit in five years? And that's if there's
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no delusion from future rounds. So that's my advice to
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entrepreneurs is always to think about it that you know,
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it's not angels being greedy, it's that they need those
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home runs to make up for all the other investments
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and the losses. And this is what we tell Congress too.
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This is why those incentives such as twelve two are
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so important. You know, if you're on the entrepreneur side
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of that, and you've worked to build up this company
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and after ten years, you know you have a liquidity event.
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You know you've probably taken below market pay, you've probably
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taken below market benefits as as your management team you did.
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Real well, you were lucky enough to get this exit
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after ten years, and now you've got a win fall.
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Well that's your retirement, right, that's what you know you've
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recovered after all of that investment. And I think there
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are some that you know in DC that don't necessarily
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see it that way, and they say, well, this is
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about the rich getting richer, and we're going to tax
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you heavily on that, not understanding that it is a
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perhaps once in a lifetime windfall, but certainly at best,
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you know, once in a decade or so. So you
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can't treat that as ordinary income on an annual basis.
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And this is part of the you know, the message
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that we're trying to advocate for, to communicate so that
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we can keep private dollars flowing into innovative companies to
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build economic growth, you know, throughout the US.
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So let me switch a little bit and talk about advice.
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So if you are sitting in an elevator and you
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have a founder in there, and you're in a good
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mood and you're like, hey, how you doing, And the
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person tells you that they're a founder, you tell them
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who you are, and they ask you for one piece
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of advice. What would that piece of advice be for
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that entrepreneur?
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You know, the first thing I'd have to say is coachable.
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You know, make sure that you are coachable. Don't think
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that you've got all the answers. You know, it's it's
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a team sport. You know. Look to those investors that
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you're going to bring on and they've got a lot
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of experience. Most likely they want to contribute beyond just
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the capital that they provide. We estimate that our sixteen
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thousand members, in addition to again five hundred million to
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a billion that they contribute annually, invest about a million
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hours hours of volunteer work simply working with and coaching
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not only their portfolio companies, but just the local, you know,
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entrepreneurial innovation hubs, so that these entrepreneurs have the network.
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They've got somebody to talk with, who's been there, who's
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done it, who has high level connections in whatever the
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industry may be. So take advantage of all that. But
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it starts with, you know, being coachable and listening.
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Let's put that now on the other side. Let's say
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that you're in an elevator and you have an investor,
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and there are a high net worth individual and they're
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sitting there saying, I've never done this before. Why should
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I go in and invest in the startup ecosystem? How
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does it work? And what advice would you have for me?
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Well, it's a team sport, you know, So I think
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those that have the most fun and are most successful
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do it by building a network. And we have you know,
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angel groups two hundred and fifty different cities across the country,
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just about every place that you might imagine, and they're
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great people. You know. I came into RTP Capital in
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the RTP North Carolina area and was just blown away
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at how well received I was. The talent in the room,
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the breadth of experience, you know, lawyers, doctors, you know,
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whatever it may be. That whenever a company came in,
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you know, we at the time we had about sixty
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five members. We'd say who knows about this? And sure not,
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there was a several handful always went up to said,
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oh we know all about that. You know, here's what
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the opportunity is, here's what the risks are. And so
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as being part of a group, you'll get all that
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for free, right, I mean, it's just part of the
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ongoing monthly conversation when an entrepreneur pitches, so again, I
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would say, none of us are you know, the know
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it alls that have all the answers. We need to
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tap into the networks that exist, the other investors that
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are out there and learn from each other while having
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fun and while growing the local community. Let me give
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you a couple stats here. One of our member groups,
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Desert Angels out in Arizona, did an economic impact study
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and what they found is that over a ten year period,
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for every one hundred thousand dollars that that group invested,
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it led to five point eight direct jobs, It led
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to four hundred and fifty eight thousand in labor and
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two point one million in economic output. So there's a
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twenty one x multiplier on that private investment versus what
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it brought back to the community in Over that same decade,
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that one group put in forty seven point three million dollars,
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So multiply that by twenty one x, you've got a
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billion dollars worth of economic growth in one community that
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was created by the local angels that used their private
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money to reinvest in their community. I think that's pretty,
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you know, pretty inspiring.
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So, speaking about continuous learning and education and coachability and
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all of these things that have to do with that,
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what would you recommend for current emerging entrepreneurs in terms
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of learning, Like where would they go and what do
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you think they should be learning these days?
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You know, there are a lot of great you know,
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incubation centers out there, innovation you know, communities, the accelerators
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programs all across the country. Those are wonderful. There's a
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lot of great university programs, you know, in entrepreneurship that
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have much to offer, and I'm not dismissing any of those,
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but I would add to those opportunities what comes from
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the investor community. And at ACA, we believe we have
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the biggest collection of accredited investors that again over the
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past twenty years, have built this curriculum called Aversity. It
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talks about everything from the fundamentals to valuations, to turn sheets,
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to cap tables, to board of directors, to exit strategies,
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portfolio management, and so forth. What we have found is
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that when the entrepreneurs go through a curriculum such as that,
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they're meeting the investor in their own backyard. And so
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even if they're not ready for a raise, you know,
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let's say it's a year or so later, because they
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went through a local incubator, accelerator or whatever, they built
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some contacts and all that they've gone through this education.
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Now they're finally ready to do that seed round. They
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know what to expect and they know how to get
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inside the mind of the investor. I think that gives
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the entrepreneur a huge leg up, you know, just something
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as simple as that. Understanding. They're looking for a ten
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x return on you know, every investment, and it's not
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because they're be ingreedy. It's because there's going to be
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losses and they need to cover. So it's about you know,
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calibration and mutual expectations setting.
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And when you think about this, you know, if you're
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if you're sitting there and you're having these conversations and
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you're you're at a coffee shop and you think about
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the most innovative startup sectors. So you're sitting there and
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you're talking to somebody at a coffee shop and you're
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just kind of jamming along and somebody asks, what do
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you think are the most innovative? Where are the sectors
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that founders should be focused on right now? If there
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are any merging or what I call inch wide, mile
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deep opportunities, what would be what you see from your perspective.
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Yeah, So we publish annually what we call the Angel
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Funders Report, and this is you know, freely available to
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the world. That is a study on all of the
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investments made by our member groups that report you know,
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their investments to us. And so we look at it
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by region, we look at it by sector. You see
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the similarities, you see the differences. We do it each
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year so you can see it over time. At the moment,
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you know, certain certainly artificial intelligence is the hot market.
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We're seeing premiums there. But there certainly is a lot
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of funding that goes into SaaS companies. You know, fintech.
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An area that we don't see a lot at present
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invested in would be something like aerospace that's very capital intensive.
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Energy is another one that you know quite often, if
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you're talking about a concept that needs hundreds of millions
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of dollars, that's probably not something that's going to be
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of interest to angels. Because most angel groups are putting
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maybe on the order of four or five million a
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year into multiple companies. They might put a couple hundred
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thousand at a time in so they want to make
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sure that they are making a meaningful difference in that
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journey of the entrepreneur in that you know, let's just
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say you've got four groups that put in you know,
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two hundred than fifty thousand apiece, that's a million dollar
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round in the seed stage. Is that going to make
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a difference you know, it's not if you've got one
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hundred million dollar need and ninety nine millions coming from
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you know, vcs or others, the Angels aren't going to
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have any input or say right. So it's kind of
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about finding that right fit. But I would recommend looking
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at the Angel Funders Report for specific statistics on different
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sectors and different parts of the country.
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So closing in on the conversation here, I just have
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two more questions. The first is, you know, there's this
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whole impact you know, inclusion, both impact, social impact and
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environmental impact, which encompasses inclusion and diversity. What is the
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ACA doing in that regard? It seems like it's a
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pretty hop top topic right now.
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This is something that we're very concerned about. We did
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see in over the past couple of year or some
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nice increases. However, in the most recent data, we've seen
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a reversion you know, in kind of the level of
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investment that's going to both female founders, black founders, Hispanic founders,
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and so this is a real concern. We do believe
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that simply because of the way we're organized, meaning two
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hundred and fifty Angel groups and all across the US,
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we're able to move the needle relative to these stats
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more significantly than the VC community. And so one of
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the things that we do is challenge all of our
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angel groups to increase the diversity of their membership, because
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we know if they get more diverse members in there,
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that's going to bring a new network to them, it's
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going to change the deal flow that they see, and
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it will most likely increase the level of funding that
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goes into, you know, those underserved communities. So the job
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is not done, but you know, we do continually talk
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about that and look for ways that we can do that.
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You know, just to give you some specific numbers there,
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in the most recent analysis of the Angel funders report,
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we found that the investment into females was twenty four percent.
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That's actually down from what it was the year before.
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Obviously we'd like to see that up around fifty or so,
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but it's better than it historically has been. If we
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look at black founders that we did see a spike
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up around ten percent or so, that unfortunately is now
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back down to two So we've got some work there
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and relative to Hispanic, about three percent of the deals.
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So these are real concerns. We're trying to work it
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by the group by group level. And also you know
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that syndication helps with this because there are certain regions
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that may be higher in one demographic than the other.
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So if we can take those underserved found and give
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them exposure in other markets where perhaps it's harder to find,
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you know, the deal flow that they're looking for, that
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helps spread the wealth if you will as well. So
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it's an ongoing job. We're not happy with where we're at,
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but we are making some progress.
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So in the last question here, if you could redesign
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the funding model, if you could go back in time
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and say, okay, this is wrong and this is how
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it should be done, what would that look like.
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We've seen some changes over the past couple of years here.
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I think one of the knocks against the angel community was, hey,
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it takes too long for too little of money. And
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so when the BC community was flush with cash and
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looking for deal flow, we saw them kind of come
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down the pipeline and say, hey, you know, we'll make
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a decision and give you more money much quicker. However,
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to do that, you know, if they did not have
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an efficient due diligence process, they had to short change it.
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And what all the stats show is that the more
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due diligence should do, the higher the outcome most likely.
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And so that's what we focus on, is trying to
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standardize that due diligence process so that we've got an
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efficient way to get the information needed to the extent
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possible de risk that investment. And this is another area
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where through trust between groups, through a standardized due diligence process,
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we're able to do some level of fast tracking of
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that by sharing due diligence between groups. Another thing that
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we recently did and launched was a model convertible note document,
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and the idea here is that that was put together
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over about a nine month period by a team of
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lawyers to really look at it from both the investor
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and entrepreneurial perspective. We put it out there. It's freely available,
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and again it's meant to calibrate and be that expectation
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setting document so that a founder doesn't have to go
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get a high priced lawyer. Start at ground zero, take
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this document, modify it for your particular needs, take out
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what you don't like, add in what you want to add.
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Start the conversations there. And so I think these things
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really help with the efficiency of the process that will
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hopefully get more capital into more entrepreneur's hands more quickly
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so that they can stay focused on building their business.
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Patrick, I really appreciate your time and energy on this podcast.
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You're a wealth of knowledge and I really believe that
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people are going to get a lot out of it.
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I appreciate it so much. Thank you, well, thank you.
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It was great to be here. And we believe the
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Angel Capital Association has a whole lot to offer both
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entrepreneurs and investors, and many of it is free of charge.
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So I would encourage all of your listeners to go
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to Angelcapital Association dot org and and browse around and
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take a look at all that's there for them. I'm
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sure they'll find a lot of great value.
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I'm sure they will. And that's it for another episode
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of the Startup Science Podcast. If you can leave a
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five star review on Apple or Spotify, I would really
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appreciate it. And for founders, as a thank you for
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leading the changes in our world, I'm offering free access
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to the Startup Science platform, Visionaries by Gregory Shepherd, and
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00:18:25.160 --> 00:18:27.799
one stop shop for founders. It's got everything from a
311
00:18:27.880 --> 00:18:32.799
startup academy to investor Match, grant Finders, Pitchfinders, and more.
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00:18:32.880 --> 00:18:36.920
Go to Gregory Shepherd dot com, click on visionaries and
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00:18:37.119 --> 00:18:40.839
use the code founders all capitals for access to the platform.
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I'll see you next time and I'm a stay my friends.
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This Startup Science podcast with Gregory Shepherd is brought to
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you by startupscience dot Io. Founders can log on to
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00:18:53.079 --> 00:18:58.079
startupscience dot io and use code thorbes to get free access.
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To connect and find out more about greg Go to
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00:19:01.599 --> 00:19:06.279
Gregory Sheppard dot com. The Startup Science Podcast is a
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00:19:06.359 --> 00:19:08.200
production of Forbes Books.
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00:00:01.520 --> 00:00:06.120
Forbes Books presents the Startup Science Podcast with Gregory Shepherd,
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brought to you by Startupscience dot Io. Greg is an
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entrepreneur who's built and sold twelve businesses, a recipient of
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four private equity awards, featured ted X speaker and ben
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Bella Publishing and Penguin Random House author. Here's Gregory Sheppard.
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I'm back with Patrick Gouin, the CEO of the Angel
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Capital Association. We've been discussing his journey from aerospace engineering
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to leading an organization that represents over sixteen thousand Angel investors. Patrick,
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let's talk about risk from both perspectives, the investor and
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the entrepreneur. Starting with the investors, how do you think
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about balancing risk and opportunity when evaluating potential investments? Then
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let's shift to the founder side. What are the risks
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for founders when taking money from outside investors?
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Yeah, so there is all kinds of risks, right, I
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don't think anybody would disagree with that. And the further
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along the company goes, the more they should be de risking.
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But also they're taking on new risks as they scale
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up and you know, build the manufacturing facility or whatever
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it may be. So what I think many people don't
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understand is to be successful in the angel space, it
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really is about diversification. You've got to have a certain
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number of portfolio companies. Remember we said earlier that even
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the best are gonna, you know, fail fifty percent of
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the time. So if we take an absolute minimum portfolio
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size of ten companies, right, and we say, okay, five
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of them we're going to write off. But at the start,
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we don't know what five, two or three of them,
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maybe we're going to return our money, but one or
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two is where we're gonna, you know, really make this
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work for us. Uh. If you think about it in
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that little example, that means that each and every one
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of those opportunities has to have at least a ten
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x return, and if it doesn't, you're probably not gonna
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get the overall returns that you need. And so often
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I see entrepreneurs come in with a higher valuation than
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maybe what is realistic for the particular time and part
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in the country, and they say, well, I can get
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you a three x return in three years. It's almost guaranteed.
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I mean, many angels would look at that and say, well,
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that's nice. But you know, again, if I'm gonna, you know,
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value your company at ten million. I got to be
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thinking what's the probability of that getting to one hundred
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million dollar exit in five years? And that's if there's
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no delusion from future rounds. So that's my advice to
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entrepreneurs is always to think about it that you know,
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it's not angels being greedy, it's that they need those
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home runs to make up for all the other investments
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and the losses. And this is what we tell Congress too.
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This is why those incentives such as twelve two are
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so important. You know, if you're on the entrepreneur side
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of that, and you've worked to build up this company
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and after ten years, you know you have a liquidity event.
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You know you've probably taken below market pay, you've probably
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taken below market benefits as as your management team you did.
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Real well, you were lucky enough to get this exit
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after ten years, and now you've got a win fall.
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Well that's your retirement, right, that's what you know you've
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recovered after all of that investment. And I think there
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are some that you know in DC that don't necessarily
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see it that way, and they say, well, this is
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about the rich getting richer, and we're going to tax
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you heavily on that, not understanding that it is a
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perhaps once in a lifetime windfall, but certainly at best,
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you know, once in a decade or so. So you
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can't treat that as ordinary income on an annual basis.
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And this is part of the you know, the message
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that we're trying to advocate for, to communicate so that
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we can keep private dollars flowing into innovative companies to
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build economic growth, you know, throughout the US.
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So let me switch a little bit and talk about advice.
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So if you are sitting in an elevator and you
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have a founder in there, and you're in a good
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mood and you're like, hey, how you doing, And the
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person tells you that they're a founder, you tell them
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who you are, and they ask you for one piece
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of advice. What would that piece of advice be for
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that entrepreneur?
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You know, the first thing I'd have to say is coachable.
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You know, make sure that you are coachable. Don't think
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that you've got all the answers. You know, it's it's
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a team sport. You know. Look to those investors that
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you're going to bring on and they've got a lot
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of experience. Most likely they want to contribute beyond just
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the capital that they provide. We estimate that our sixteen
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thousand members, in addition to again five hundred million to
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a billion that they contribute annually, invest about a million
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hours hours of volunteer work simply working with and coaching
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not only their portfolio companies, but just the local, you know,
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entrepreneurial innovation hubs, so that these entrepreneurs have the network.
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They've got somebody to talk with, who's been there, who's
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done it, who has high level connections in whatever the
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industry may be. So take advantage of all that. But
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it starts with, you know, being coachable and listening.
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Let's put that now on the other side. Let's say
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that you're in an elevator and you have an investor,
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and there are a high net worth individual and they're
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sitting there saying, I've never done this before. Why should
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I go in and invest in the startup ecosystem? How
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does it work? And what advice would you have for me?
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Well, it's a team sport, you know, So I think
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those that have the most fun and are most successful
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do it by building a network. And we have you know,
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angel groups two hundred and fifty different cities across the country,
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just about every place that you might imagine, and they're
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great people. You know. I came into RTP Capital in
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the RTP North Carolina area and was just blown away
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at how well received I was. The talent in the room,
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the breadth of experience, you know, lawyers, doctors, you know,
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whatever it may be. That whenever a company came in,
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you know, we at the time we had about sixty
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five members. We'd say who knows about this? And sure not,
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there was a several handful always went up to said,
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oh we know all about that. You know, here's what
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the opportunity is, here's what the risks are. And so
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as being part of a group, you'll get all that
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for free, right, I mean, it's just part of the
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ongoing monthly conversation when an entrepreneur pitches, so again, I
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would say, none of us are you know, the know
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it alls that have all the answers. We need to
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tap into the networks that exist, the other investors that
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are out there and learn from each other while having
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fun and while growing the local community. Let me give
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you a couple stats here. One of our member groups,
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Desert Angels out in Arizona, did an economic impact study
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and what they found is that over a ten year period,
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for every one hundred thousand dollars that that group invested,
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it led to five point eight direct jobs, It led
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to four hundred and fifty eight thousand in labor and
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two point one million in economic output. So there's a
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twenty one x multiplier on that private investment versus what
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it brought back to the community in Over that same decade,
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that one group put in forty seven point three million dollars,
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So multiply that by twenty one x, you've got a
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billion dollars worth of economic growth in one community that
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was created by the local angels that used their private
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money to reinvest in their community. I think that's pretty,
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you know, pretty inspiring.
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So, speaking about continuous learning and education and coachability and
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all of these things that have to do with that,
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what would you recommend for current emerging entrepreneurs in terms
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of learning, Like where would they go and what do
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you think they should be learning these days?
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You know, there are a lot of great you know,
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incubation centers out there, innovation you know, communities, the accelerators
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programs all across the country. Those are wonderful. There's a
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lot of great university programs, you know, in entrepreneurship that
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have much to offer, and I'm not dismissing any of those,
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but I would add to those opportunities what comes from
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the investor community. And at ACA, we believe we have
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the biggest collection of accredited investors that again over the
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past twenty years, have built this curriculum called Aversity. It
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talks about everything from the fundamentals to valuations, to turn sheets,
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to cap tables, to board of directors, to exit strategies,
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portfolio management, and so forth. What we have found is
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that when the entrepreneurs go through a curriculum such as that,
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they're meeting the investor in their own backyard. And so
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even if they're not ready for a raise, you know,
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let's say it's a year or so later, because they
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went through a local incubator, accelerator or whatever, they built
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some contacts and all that they've gone through this education.
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Now they're finally ready to do that seed round. They
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know what to expect and they know how to get
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inside the mind of the investor. I think that gives
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the entrepreneur a huge leg up, you know, just something
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as simple as that. Understanding. They're looking for a ten
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x return on you know, every investment, and it's not
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because they're be ingreedy. It's because there's going to be
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losses and they need to cover. So it's about you know,
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calibration and mutual expectations setting.
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And when you think about this, you know, if you're
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if you're sitting there and you're having these conversations and
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you're you're at a coffee shop and you think about
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the most innovative startup sectors. So you're sitting there and
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you're talking to somebody at a coffee shop and you're
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just kind of jamming along and somebody asks, what do
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you think are the most innovative? Where are the sectors
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that founders should be focused on right now? If there
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are any merging or what I call inch wide, mile
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deep opportunities, what would be what you see from your perspective.
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Yeah, So we publish annually what we call the Angel
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Funders Report, and this is you know, freely available to
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the world. That is a study on all of the
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investments made by our member groups that report you know,
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their investments to us. And so we look at it
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by region, we look at it by sector. You see
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the similarities, you see the differences. We do it each
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year so you can see it over time. At the moment,
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you know, certain certainly artificial intelligence is the hot market.
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We're seeing premiums there. But there certainly is a lot
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of funding that goes into SaaS companies. You know, fintech.
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An area that we don't see a lot at present
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invested in would be something like aerospace that's very capital intensive.
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Energy is another one that you know quite often, if
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you're talking about a concept that needs hundreds of millions
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of dollars, that's probably not something that's going to be
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of interest to angels. Because most angel groups are putting
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maybe on the order of four or five million a
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year into multiple companies. They might put a couple hundred
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thousand at a time in so they want to make
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sure that they are making a meaningful difference in that
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journey of the entrepreneur in that you know, let's just
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say you've got four groups that put in you know,
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two hundred than fifty thousand apiece, that's a million dollar
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round in the seed stage. Is that going to make
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a difference you know, it's not if you've got one
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hundred million dollar need and ninety nine millions coming from
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you know, vcs or others, the Angels aren't going to
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have any input or say right. So it's kind of
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about finding that right fit. But I would recommend looking
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at the Angel Funders Report for specific statistics on different
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sectors and different parts of the country.
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So closing in on the conversation here, I just have
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two more questions. The first is, you know, there's this
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whole impact you know, inclusion, both impact, social impact and
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environmental impact, which encompasses inclusion and diversity. What is the
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ACA doing in that regard? It seems like it's a
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pretty hop top topic right now.
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This is something that we're very concerned about. We did
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see in over the past couple of year or some
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nice increases. However, in the most recent data, we've seen
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a reversion you know, in kind of the level of
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investment that's going to both female founders, black founders, Hispanic founders,
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and so this is a real concern. We do believe
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that simply because of the way we're organized, meaning two
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hundred and fifty Angel groups and all across the US,
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we're able to move the needle relative to these stats
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more significantly than the VC community. And so one of
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the things that we do is challenge all of our
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angel groups to increase the diversity of their membership, because
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we know if they get more diverse members in there,
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that's going to bring a new network to them, it's
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going to change the deal flow that they see, and
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it will most likely increase the level of funding that
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goes into, you know, those underserved communities. So the job
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is not done, but you know, we do continually talk
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about that and look for ways that we can do that.
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You know, just to give you some specific numbers there,
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in the most recent analysis of the Angel funders report,
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we found that the investment into females was twenty four percent.
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That's actually down from what it was the year before.
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Obviously we'd like to see that up around fifty or so,
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but it's better than it historically has been. If we
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look at black founders that we did see a spike
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up around ten percent or so, that unfortunately is now
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back down to two So we've got some work there
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and relative to Hispanic, about three percent of the deals.
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So these are real concerns. We're trying to work it
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by the group by group level. And also you know
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that syndication helps with this because there are certain regions
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that may be higher in one demographic than the other.
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So if we can take those underserved found and give
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them exposure in other markets where perhaps it's harder to find,
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you know, the deal flow that they're looking for, that
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helps spread the wealth if you will as well. So
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it's an ongoing job. We're not happy with where we're at,
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but we are making some progress.
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So in the last question here, if you could redesign
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the funding model, if you could go back in time
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and say, okay, this is wrong and this is how
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it should be done, what would that look like.
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We've seen some changes over the past couple of years here.
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I think one of the knocks against the angel community was, hey,
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it takes too long for too little of money. And
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so when the BC community was flush with cash and
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looking for deal flow, we saw them kind of come
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down the pipeline and say, hey, you know, we'll make
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a decision and give you more money much quicker. However,
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to do that, you know, if they did not have
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an efficient due diligence process, they had to short change it.
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And what all the stats show is that the more
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due diligence should do, the higher the outcome most likely.
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And so that's what we focus on, is trying to
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standardize that due diligence process so that we've got an
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efficient way to get the information needed to the extent
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possible de risk that investment. And this is another area
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where through trust between groups, through a standardized due diligence process,
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we're able to do some level of fast tracking of
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that by sharing due diligence between groups. Another thing that
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we recently did and launched was a model convertible note document,
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and the idea here is that that was put together
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over about a nine month period by a team of
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lawyers to really look at it from both the investor
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and entrepreneurial perspective. We put it out there. It's freely available,
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and again it's meant to calibrate and be that expectation
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setting document so that a founder doesn't have to go
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get a high priced lawyer. Start at ground zero, take
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this document, modify it for your particular needs, take out
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what you don't like, add in what you want to add.
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Start the conversations there. And so I think these things
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really help with the efficiency of the process that will
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hopefully get more capital into more entrepreneur's hands more quickly
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so that they can stay focused on building their business.
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Patrick, I really appreciate your time and energy on this podcast.
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You're a wealth of knowledge and I really believe that
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people are going to get a lot out of it.
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I appreciate it so much. Thank you, well, thank you.
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It was great to be here. And we believe the
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Angel Capital Association has a whole lot to offer both
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entrepreneurs and investors, and many of it is free of charge.
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So I would encourage all of your listeners to go
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to Angelcapital Association dot org and and browse around and
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take a look at all that's there for them. I'm
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sure they'll find a lot of great value.
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I'm sure they will. And that's it for another episode
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of the Startup Science Podcast. If you can leave a
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five star review on Apple or Spotify, I would really
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appreciate it. And for founders, as a thank you for
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leading the changes in our world, I'm offering free access
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00:18:20.359 --> 00:18:25.039
to the Startup Science platform, Visionaries by Gregory Shepherd, and
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00:18:25.160 --> 00:18:27.799
one stop shop for founders. It's got everything from a
311
00:18:27.880 --> 00:18:32.799
startup academy to investor Match, grant Finders, Pitchfinders, and more.
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00:18:32.880 --> 00:18:36.920
Go to Gregory Shepherd dot com, click on visionaries and
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00:18:37.119 --> 00:18:40.839
use the code founders all capitals for access to the platform.
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I'll see you next time and I'm a stay my friends.
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This Startup Science podcast with Gregory Shepherd is brought to
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00:18:48.400 --> 00:18:52.839
you by startupscience dot Io. Founders can log on to
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00:18:53.079 --> 00:18:58.079
startupscience dot io and use code thorbes to get free access.
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00:18:58.400 --> 00:19:01.480
To connect and find out more about greg Go to
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00:19:01.599 --> 00:19:06.279
Gregory Sheppard dot com. The Startup Science Podcast is a
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production of Forbes Books.
