The X Factor: How To Invest In The Right People

When Angel Kings invests in startups, we look to the founders first.   Our team looks for that future icon: the next Steve Jobs, Bill Gates, or Elon Musk.  Those names are pretty big shoes to fill.  We want someone who will swing for a homerun every chance he or she gets; someone who creates a new industry or platform to solve a problem; someone with an all–in mentality from day one until the day we meet him or her. And just to be clear: We meet the founders behind every potential investment them before we write a check.  And you should, too. 

The “People” factor accounts for a large percentage of our investment formula.  We’re disclosing this not because we want some sycophantic founder to pitch us and tell us how “passionate” and “dedicated” he or she is; in fact, to the contrary. 

The investment formula is about selecting the right people, and informing and educating them so that they don’t bother pitching us unless they fit our proprietary “PASS” Formula. 

Here are Angel Kingsfour must have personality factors before we make an investment in an idea from a founder or founders.  We call this the “Angel Kings’ Personality Profile” model:

1.     Passionate, but with a purpose

2.     All–in to their endeavor

3.     Shows no fear of failure

4.     Surrounded by equals or those greater

 These four personality traits are hard to define objectively.  After all, how do you define passion?  What does it mean to be “all–in?”  How can you tell if someone has no fear of failure?  How do you know if a founder has people on her team just as good as she is?  And does this matter?  Let's start answering these questions by further discussing #1 in our "PASS" Formula.

Passionate, But With A Purpose

It is vital for every founder to be passionate, since passion is what fuels a startup to success.  Think of a startup as a car, and every founder as the driver.  That driver’s passion is what fuels that car.  It’s the gasoline that keeps the car running through every bump on the road; every storm it has to weather; every passenger it has to carry.  We’ve been pitched countless times, and 99% of the time, the founder will say how passionate or dedicated he or she is about an endeavor.  However, if passion fuels a startup to success, it is purpose that will guarantee that a startup remains headed in the right direction.  Every founder that has had tremendous success has had both passion and purpose embedded in their companies.    

Take a look at Elon Musk.  Having founded some of the most successful companies in modern times – PayPal, Tesla, and SpaceX –Musk perfectly fits each of the Angel Kings’ personality traits.

usk starts each new company with a fundamental question: will my idea completely revolutionize an age–old industry for the betterment of the people?  Most startups see a personal pain point and decide to fix it for themselves.  However, Musk sees fundamental stagnation in an industry, and delves head first into solving a problem that will change commerce.  Musk begins to answer his own question by building a product he would use personally, which is important, but he then tests immediately whether others would use it too by asking if they would pay for it… and invariably they do – in droves.

PayPal, Tesla and now SpaceX have changed the financial and transportation industries to the point that traditionally embedded players, like banks and NASA, are forced to rewrite how they can compete within the market they used to dominate.   Musk will remain an icon of the VC and angel investors industries because he persists in challenging the classic players with innovative ideas.  His passion is complemented by a real desire to purposefully drive change and to produce new solutions to existing problems.

Passion is important as the basic trait, but a better marker of a future icon or success is whether there is a genuine purpose behind an idea.  Passion, purpose and money aren’t mutually exclusive, either.  What we’re saying is that you are more likely to make money investing in someone if he or she has passion and purpose combined.

If you'd like to learn about startup investing, or if you want to see if you're an accredited investor, apply here. Angel Kings are the angel investing and venture capital experts.

Ross Blankenship is an expert on startup funding,  angel investing and venture capital.

Ross Blankenship is also the Founder and CEO of AngelKings.com.  Angel Kings is an investing platform that provides accredited angel investors the opportunity to invest in top startups and companies in sectors like cyber security, biotech, mobile, data and financial services.  Angel Kings provides both venture capital funds for startup investing as well as private equity funding for early and middle-stage investments.