Hot Seat

Chapter 16. Angels and Demons

When Charles and I incorporated Ontela, I knew exactly one angel investor. By the time we closed our seed round, I’d pitched close to a hundred of them. The entire time, I had no idea who I was talking to.

Angel investors are perhaps the most misunderstood participants in the fundraising spectrum. Misconceptions abound, and those misconceptions cause endless frustration to those who would seek their funds.

It was only when I started writing checks myself that I realized just how confused I’d been.

Myth: “Angel Investor” Is a Thing

The fundamental misconception of angel investors is that they fall into some sort of homogenous category. In fact, “angel investor” is sort of like “401(k) investor.” It just means someone did something once. The variations between angels are vast and limitless. The only thing they have in common is some extra income and a fondness for at least one startup. Let’s consider a few examples.

Darby Affeldt was one of the angel investors in Ontela. She’s a former veterinarian, realtor, and Iron Man triathlete. One day, some of her real estate friends convinced her to go to Keiretsu Forum.

I met her at a Forum breakfast in a large public conference room at the base of a sprawling office tower. Donuts and coffee were on hand. It was not your everyday Folgers or even Starbucks—this coffee, I was to learn much later, was from Seattle’s Coffee Equipment Company. The company was a Seattle startup and the purveyor of the Clover $12K ...