Before I was a millionaire angel investor, I was a confused angel investor!
It’s what set me on the path to build real, generational wealth for my family.
My journey was way harder than it had to be.
But at the time, I didn’t have the network, or access to information—to make a splash as an investor.
That’s why I don’t hold back when it comes to sharing my knowledge in this space.
In this short video, I’m joined by my investing partner and founder of XPO Logistics, Allan Marshall to share the 7 Secrets of Millionaire Investors.
For the most part, when you’re analyzing a startup, there aren’t many numbers to look at.
It’s growth may be slow, the company could be burning through cash, or just in its very infant stages.
What do you do?
You analyze the leadership, and you make a bet on the people behind the startup.
What is it that the Boardroom looks for in a founder, and how do we know we’ve found the right leadership to put our hard-earned money behind?
The answer to those questions and more are about to be addressed.
Teaming up with a strong founder is the first step towards angel investing success. I always say angels invest in people, not products.
It can be difficult to find the right founder, there are countless factors to consider. Did you know that around 60% of startup failures are a result of founder conflict? This goes to show — a founder can make or break your investment.
When I was starting as an angel investor, I struggled to win on my investments. And let me tell you, it wasn’t for lack of trying. The real reason? There just weren’t good resources and info available to me.
Now that I have climbed up the ladder (the hard way), I want to share with you the secrets I’ve learned along the way, starting with what to look for in a startup founder.
Founders Hold the Best Opportunities in the Pandemic Economy
In my free, 7 Secrets of Millionaire Investors video, we cram together my best jewels of wisdom from a full career of investing and entrepreneurship. One of the most relevant today is that angel investing doesn’t care what the markets are doing! It never has, and never will.
Now isn’t the time to wallow in inactivity. Even now, there are spectacular startups breaking ground in their industry, especially in essential ones.
More importantly, we know the economy is going to get better. When the recovery starts — the boom after the bust — the startup world will skyrocket. This is why you can’t stop planting seeds for long-term growth. Don’t let this be a dry spell in your portfolio.
Angel investing is the door to unlocking generational wealth, even in a crisis — and good founders are the key.
What to Look for in a Founder
So, to let you in on one of my most invaluable lessons as an angel investor, I’m going to share the essential components of any startup founder. Any team you invest in needs to have someone with these qualities running the show.
Possibly the most important trait any founder can have is experience.
In early-stage investing, we are investing more in the founder than the product, and the best way you can gauge a founder is through their resume.
You should give major points to anyone who has founded a successful company before. Second-time founders are battle-tested and have already learned the hard lessons and the secrets to success.
If they haven’t founded before, the next best thing is expertise in their field.
Don’t count out inexperienced founders, but be sure that they make up for their lack of experience by being exceptional in other areas.
A founder who is excited and passionate about their idea is ten times more likely to succeed.
Passion shows that they believe in their business. They wake up early to get working on it. They go to sleep at night thinking about it. They know the ins and outs of their team and their market.
People are just better at doing the things they love.
Passion also ties into a founder’s motivation. Passionate founders don’t give up so easily when confronted with a problem. Their dreams are on the line, so they will show grit and push forward to succeed.
Any founder you consider working with should display clear leadership qualities. A founder is the captain of the ship — the whole crew relies on them.
A good leader encourages and motivates their team and leads by example. They know how to select talented people and then bring out the best in them. When a weakness in the company is revealed, a good leader works to strengthen it.
Founders should be the voice of the team, speaking up, selling the idea, and networking. Try to ensure your prospective founder is a confident, fearless, and empathetic leader.
A part of leadership — and something essential to all success — is humility.
Those who can recognize and accept their weaknesses are more likely to see problems and find solutions.
On the other hand, proud founders will ignore their own shortcomings, ignore the advice of others, ultimately fail, and bring the whole ship down with them.
Find yourself a founder that knows they don’t have all the answers and is comfortable asking questions. Even when opinions come out that clash with their own, a great founder will listen and consider them. Humble founders learn and grow much faster and have a better attitude for success.
To keep it simple — make darn sure that the success of the company is more important than the founder’s ego.
Startups always go through highs and lows and face many challenges. For a founder, being tough and adaptable is the name of the game.
More than anyone on the team, founders need to roll with the punches and find solutions under stress. Markets will fluctuate, funding will be tight, surprises will pop up constantly. They must be able to face adversity and push forward.
The resilient founder sees failure as a vital lesson, one that motivates them to hop back up on the horse and keep riding.
Always invest in someone who seems tenacious, optimistic, and unerring in their quest towards success.
No one needs to be a genius to be successful in startups. However, being an excellent problem solver is essential.
A good founder should learn fast and be quick on their feet. It’s not enough to just muscle through problems, they need to craft thoughtful solutions.
If you’re going to invest your money in someone, they better be able to think outside the box. Someone analytical and creative can connect the dots to surmount almost any problem.
A founder like this can take a failing project, repurpose it into a new vertical, and mold it into a successful one.
You can always rely on a leader that sees things no one else sees, is naturally curious, and loves solving puzzles.
While it’s not black and white, age can play a role in the attitude of a founder. Different generations tend to have different priorities, each with their pros and cons.
Popular culture has glorified the image of the young startup founder. So much so, that it has become a sort of virtue in the eyes of some investors.
It’s important not to fall into this thinking because the average age of founders today is about 45.
These older, more seasoned individuals bring with them life experiences and patience not normally seen in younger founders. Older founders tend to be more calculated in their approach and make decisions with long-term success in mind. They aren’t as focused on getting rich quickly.
On the other hand, founders in their 20s or 30s can bring with them fresh perspectives and youthful optimism. They won’t have the experience of the older founders, but instead are more tuned-in to innovation and more open to diverse skill sets in their team.
Don’t draw any lines in the sand over age, just be aware of your founder’s priorities and personality. Find a founder who agrees with your long-term goals, strategies, and personality.
The Next Step
Seeing the difference between a founder who will make you rich and one that will waste your money is an essential angel investing skill.
But, this is just one of the many things I wish I knew when I was starting out. There are 7 more secrets I want to give you. I know how hard the path can be, but there is no better path to wealth than angel investing
Even now — no, especially now — angel investing is the best way to get huge returns on your investment. Regardless of what the market is doing, a good startup can turn $1,000 into $1,000,000. Succeeding in this field only requires two things — education and access.
Experienced investors, like myself, can teach you invaluable lessons. The education we give you lets you leapfrog forward, avoiding the pitfalls others face.
The next requirement is simple. You need access to the best tips, secrets, and deals. For this, you need some backup. I made this short, information-packed video to bring you into the angel investing circle. It has everything you need to start building wealth today.
Let me know what you think–drop a message in the comments below!