Anyone who has been in business for a time and works with start-ups gets asked the question – Where do I find good investors?
Some may say, find investors among your business contacts or ask personal friends. Some may say, look under any rock! Seriously, it’s not easy to find good investors who have enough humanity, compassion and business smarts to put together a deal that works for both parties.
In this investor/pitcher game someone has to win which means one of the parties is a loser — the loser being the guy who has secured the investment but feels he could have done better, shouldn’t have given away the farm or is in fear of his new working arrangement.
I like Kevin O’Leary from Shark Tank. O’Leary, aka Mr. Wonderful, is a self-described ‘looking out for himself’ guy who is only concerned about making money. Most who go before the Sharks do so with a fear that they will be decimated by O’Leary’s remarks or, worse, will be offered the only deal among the Sharks that includes giving up their first born. I believe O’Leary’s TV persona is an act but woe to anyone who had that type of person as his or her angel investor.
While thinking of the O’Leary’s of the world I’m reminded of Brett Wilson, former Canadian Dragon’s Den member who sat next to O’Leary when O’Leary was a member of the Dragon’s Den. Wilson, the so-called “dragon with a heart,” left CBC’s Dragons’ Den after three years with a challenge, according to the National Post. He called upon the Gemini-award winning show to offer budding businesspeople “constructive criticism as opposed to abuse.”
Wilson was brought into the show initially as a replacement but he was advised that he “wasn’t mean enough.” People love the O’Leary/Simon Cowell type characters because they make good television.
What people loved was seeing Wilson invest in a business because he seemed so genuine with an ‘I want to work with you’ attitude. He often shocked other Dragons by investing in ‘crazy’ ideas because he liked the person pitching.
What I am saying is that not only is it tough to find the right investor but there as many kinds of investors as there are people needing the capital investment. I’m fortunate to be in a position where I have such a large rolodex that I can often choose the perfect match for both investor and start-up founder.
The match must also include the temperament of each party so that expectations, obligations and decision-making flow from one to the other without hostility, aggravation or suspicion. It’s a tough balancing act.
I was introduced to a new start-up by a PR firm in San Marcos, California, ChicExecs Brand Development. The start-up is called RateMyInvestor.com.
Like many founders, Austin Stofer was promised investment by a venture capitalist, only to be left with no cheque in sight. Stofer, the CEO of Sieo (a hybrid agency and business builder that focuses on helping companies start and grow) and RateMyInvestor, was led on for months, reworking financials and jumping through countless hoops. “After sidelining other opportunities to focus on this one investor, we got five minutes to pitch. The investor’s eyes were on his phone the whole time. Three months later, our emails were unreturned and no decision was made,” Stofer explains. “We got burned, and we aren’t alone.” After speaking to other founders, Stofer heard similar stories about the same investor. Thus, RateMyInvestor was born.
It makes perfect sense to me to start a site like this one. There’s one for doctors that I know of and when shopping for a doc it would come in handy. Considering start-ups face due diligence up the wazoo it seems perfectly rational to expect investors to face the same scrutiny. In fact, I often wonder about the veracity of some angels I have met and have them as a resource.
Stofer’s mantra and tagline says it all, “Help Out the Next Entrepreneur and Talk About Your Experience – Leave a Review, Help an Entrepreneur.”
RateMyInvestor, a free online platform where founders review their experiences with investors, places more knowledge in the hands of entrepreneurs. This can help prevent founders from getting burned and enable them to make informed choices, much like Yelp has done for its users. I’m assuming that Stofer’s Sieo success fuels this free site.
Stofer and his team personally vet reviews left by founders. “We have to hold these reviews to very high standards and scrutinize them very carefully,” he says. “This is not a revenge platform, but a place where founders and funders can come together to break down the fundraising barrier.”
RateMyInvestor is comprised of serial entrepreneurs and seasoned advisors with a deep understanding and network in the start-up ecosystem. In November 2018, Stofer acquired Know Your VC, which allows him to “being one step closer to cultivating transparency in the venture world.”
RateMyInvestor also wants to reward investors who practice ethically by featuring those with great ratings. Putting these investors in the limelight will promote their practices and increase their deal flow. This also allows new founders to find the right investors for them. The RateMyInvestor team has high hopes that this new platform can better connect entrepreneurs and investors. As Stofer says, “Founders and funders want to find each other. We’re just providing the place for that to happen.”
I’ve tried it out myself checking on some VC’s I know and they were listed with dead-on accuracy. Some of the features of RateMyInvestor include:
- Leave a Rating of the investor
- Leave Tips on how to deal with the investor
- Find Investors (worked for me in Canada and USA)
- Interviews with start-up founders
- Tips to finding the right investor
It’s satisfying to see founders start a business taken from their own experience. This free platform is like one founder paying it forward for others who follow. This will be a real tool for founders once the platform is more populated. The side benefit of this site is that perhaps ‘investors’ will be less prone to leading founders on thinking there is genuine interest and illuminate the time wasters.
Gary is CEO of Bizzo Management Group Inc. in Vancouver. He has mentored over 1000 business leaders, investors and entrepreneurs. London-based Richtopia placed Bizzo on the Top 100 Global Influencers in the World for 2018.
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