Tall, Blond, Smart, and Rich: Views from an Entrepreneur turned Angel Investor
(Tall, Blond, Smart, and Rich)*, Dale Murray founded a business, sold it to a bigger entity, than acted as a CEO and sold that business as well – she is now an angel investor and has invested in various businesses, including women-led businesses. Time to talk with The NextWomen about investing in entrepreneurs.
Q: Entrepreneur or Investor? What's your preference?
DM: To be fair, it depends on the opportunity.
Being an entrepreneur gives you full control over the quality of your product or service and the way in which your business grows, however you never have a day off!
Being an investor can give you more freedom over your time and has the advantage that you are involved in many businesses, however it's not up to you to grow the business - that's the Founder's job and they must be left to get on and do this.'
Q: When do you invest? Based on intuition, personality entrepreneur, financials? Or based on advice of others? Tell us more...
DM: I invest in early-stages - when a business is forming and may even be pre-revenue. I only invest in businesses that have a strong, unique business proposition that is supported by an excellent management team. The product or service must be defensible, the margins must be good and the team must have a sizeable edge over the competition. Finally, there must be a clear exit route for the business.
'Entrepreneurs must invest the time in their business planning, including detailed and thoughtful financial projections; they must be forced to think hard about how they will market their product and how they will build their team.'
Q: How much $$$ ££££ do you invest each time?
DM: Somewhere between £50k - £250k. I complete a lot of due diligence to ensure that the business is right for me,
so anything less than £50k is not worth it.
Q: And when an entrepreneur does not perform as well as you thought, what do you do?
DM: 'I have learned that resourcefulness is a core skill that a good entrepreneur must tap into all the time. I work with my entrepreneurs to see how things might need to be changed, what resources could be applied differently, whether the business model needs to shift, etc. It is rarely as simple as throwing more money at the issue and I would always challenge all aspects of a failing business plan to determine where improvements can be made.
Occasionally, an entrepreneur is not up to the job, and in that scenario serious planning needs to be undertaken to determine how best the business can continue with him/her in a different role or, worst case, out of the business completely.
Q: How many business plans do you read, and how do you read them?
DM: About 10 a month. I focus on the Executive Summary and if the idea has grabbed me by then, I'll read every word of the rest of the plan.
Q: What's your tip for an entrepreneur looking for investment from you?
DM: Make sure that your business is addressing a real opportunity, not just developing an idea. Test that there is a real market for this product or service and that it is not simply "something that I've always wanted to have a go at".
Also, think long and hard about what type of person you are - imagine that everything is going pear-shaped and think about how you would feel in that situation: emboldened, ashamed, determined or upset? If you already have a business and need growth capital, then work hard on your business plan, get as much opinion from as many people as you can and then get out there and meet as many angels as you can!
Q: Where is the learning curve for an entrepreneur seeking investment?
DM: Firstly, in producing high quality business plans (a lot of your competitors for investment capital have MBAs and are well-schooled in producing business plans) and secondly, in delivering the pitch.
The investment presentation is crucial in establishing your charisma and likeability with your audience, and you must also be professional, knowledgeable and convincing.
Q: Do you invest on your own or with co-investors? Why (not)?
DM: Normally with co-investors, in order to ensure that the full amount of investment capital required is obtained by the company.
Q: Any chance you will be entrepreneur again, or manager?
DM: I think it is more likely that I would be an entrepreneur again, rather than a manager. Once you have run your own businesses, there is little appeal in working for someone else.
I thoroughly enjoyed my years as an entrepreneur, despite almost daily challenges and many times thinking that I'd lost all my life's savings and all my reputational credibility...
At the end of it all, there is nothing like building a business from scratch into an organisation that sells a good product or service, to people who want to buy it, for a price that delivers you a profit. That is a fun place to be!
And the final one, where are the other female investors?
There are a small number of committed female investors out there, and we need to find more.
This (business angel investing) is definitely an asset class that all high-net worth individuals should be considering. I would welcome more women of course.
* this is how we think a modern novel would start with Dale Murray as key figure; political incorrect we would say.(ed. TNW)
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