Getting started
Whether angel investing is your new career or a side hustle, the act of exploring something new begs the question: Where do I begin?
In a burgeoning startup scene like the Twin Cities, there’s an opportunity around every corner. If you simply hang a shingle on your LinkedIn, you’ll hear from an entrepreneur (or 20) who wants your investment. A passive approach like this will produce mostly noise; the real Glengarry deals require more effort.
The best deals are ones that blossom from trusted connections and valued relationships. And for you, that work begins today.
Getting yourself out there
Groove’s most reliable sources of quality deals come from founders, other investors, and entrepreneurial support organizations (accelerators, incubators, etc.), in that order.
To build these relationships, you have to go where these types of people are likely to be.
The Greater MSP metro area offers a ton of events year-round where you can discover up-and-coming companies, connect with other investors, and build out your infrastructure of reliable deal sources; Forge North and Launch Minnesota do a great job of curating the area’s event calendar, in the Twin Cities and beyond.
You may want to start by concentrating your efforts on investor-focused programming, like Demo Days, pitch competitions, the MN Cup, and/or Twin Cities Startup Week. At these events, the host has often pre-screened the startups to ensure a certain level of maturity, though you’ll want to ask if your investment thesis aligns with each program.
As you’re experiencing these events, introduce yourself and be open to exploring the wandering path that may ultimately lead to your best investment. Yes, you’re looking for a hot deal, but always be on the lookout for ways to build deeper inroads to the founders and other investors in attendance.
Who knows? Maybe it’s that one time you volunteered to mentor that entrepreneur a few years ago which ultimately became the relationship that led to your biggest return. You never know, so you should keep planting those seeds if you want a winning portfolio down the road.
Invest alongside other investors
Building a network of fellow investors is a great way to jumpstart your pipeline.
Groove regularly receives quality introductions from fellow investors—they come from other institutional investors, our limited partners, and other angels in the community. In most cases, not only does Groove receive an introduction, but the deal is often accompanied by some level of vetting performed by our fellow investor.
Finding other angel investors is not easy, as many angels often fly under the radar. Outside of the events previously referenced, the highest concentration of your fellow early-stage investors happens at an annual conference called Angel Fest (hosted by Groove in the spring).
As you expand your network of co-investors, you’ll not only start to see your deal flow increase, but you may also enjoy the added benefits of having other subject matter experts check your work and/or expand your coverage on the topics that are less familiar to you.
Keep building
Fast forward a couple of years, and you’re now swimming in a pool of quality investing opportunities. Now what?
The relationships you come to rely on are constantly changing; there’s a new managing director of the accelerator you like, the journalist you follow leaves the publication, that event you always go to no longer exists, etc. It happens. You need to continue your outreach if you want to avoid a stale pipeline.
Ask yourself questions like: Am I seeing the same volume of deals? How’s the quality? Do my investments all look like me? Have I gone out of my way to introduce myself to communities that I am less familiar with? Am I experiencing any blind spots in where I am looking?
You can do it
It sounds like a lot of work, but for the right person, it’s fun!
I enjoy the challenge of learning a lot of new things, honing my business acumen, helping local founders succeed, and investing in something that keeps our region a great place to raise a family. Plus, you just can’t beat the thrill of finding a deal that is off the radar of every other investor.
