Private Investor Panel: What Angels, Sponsors and Family Offices Want
Private Investor Insights: Hear the top requests, investment mandates, and challenges facing 5 pr...
Founders, sponsors and fund managers who want to understand how angels, family offices and real estate investors think about mandates, risk and deal terms.
Summary
Bo, an angel investor from Miami, looks for technology companies that can reach 8 to 12 times their value in four or five years. He ranks the management team above the deal itself. Chris, whose firm owns 47 self-storage facilities, wants investors with a long horizon who like passive income. Richard describes buying into profitable operating businesses and the kinds of return structures he likes to use.
The panel also covers how to react when a founder says a deal has low risk. They suggest asking what the term means and asking questions before pitching. Bo tells the story of Passalong Networks, where an $82 million offer was refused and the company closed six months later. The last part shares examples of how the panelists think about fees and returns, and why the panel is cautious about investing overseas.
The 5 big lessons
- Team matters more than the deal. Bo says a great management team with a good deal will outperform a good team with a great deal. Richard adds that founders should act on this, for example by putting a video of the founder inside the pitch deck.
- Treat low risk claims with caution. The panel says that when a founder says there is no risk or low risk, they ask the founder to define the term. Risk looks different to a real estate developer than to someone who invests in patented technology.
- Ask questions before you pitch. Chris describes sales as learning what the other party wants. The moderator adds that qualifying questions save time and keep the call from sounding salesy.
- Match the structure to the investor. Chris says investors tend to look at whether sponsor fees seem reasonable and whether incentives feel aligned. Richard shares his own preferences on deal structure, and many sponsors talk to a securities attorney about how to structure terms.
- Be systematic and stay close to home. Richard says capital raisers should build a targeted database of investors who already know their niche. The panel says overseas deals work best where the investor has natural ties, and that proximity helps when a CEO must be replaced.
Worth quoting
"a great management team with a good deal will outperform a good management team with a great deal every time."
"We're asking investors to partner with us for five to seven years on most of our typical projects. And I want you to still want to talk to me in seven years."
"ultimately as investors, you want to make sure that our incentives as a sponsor are aligned with yours."
Facts from this talk
- Bo's group made 43 angel investments, put more than $45 million into those companies, and had 13 exits.
- In the Passalong Networks story, the investors put about $2.5 million in at roughly a $12 million valuation, and EMI offered $82 million.
- Chris's firm owns 47 self-storage facilities and has had 21 exits. Richard says the family office clients he works with often pay roughly 2.5 to 5 times EBITDA, though multiples vary by business.
Sources
From Richard C. Wilson's Centimillionaire Strategies YouTube channel: Private Investor Insights: Hear the top requests, investment mandates, and challenges facing 5 pr.... Quotes come from the video captions, lightly edited for readability. Figures are the speakers' own estimates and experience.
General education only. Not legal, tax or investment advice.
Talk to a securities attorney to explore options around fee and profit splits, warrants and royalties and cross-border investing. Do not use AI to write your own legal agreements.
Related questions
- How do I close a funding round?I close a funding round by focusing on investors who fit the opportunity and moving each interested prospect through clear, consistent follow-up.
- What documents do investors request during due diligence?Prepare a clear, organized package covering your operations, investments, compensation, team, and track record.
- How do I raise capital for my business?I raise capital by building a repeatable system for attracting the right investors, establishing credibility, and developing relationships before asking for money.
Questions about this video
What returns does the angel investor on the panel target?
Bo looks for 8 to 12 times in four or five years, or 4 to 6 times in two or three years. He says he is skeptical of 10 to 12 times in two or three years.
What fee and return structures did the panelists describe?
The panelists shared examples from their own deals, and terms vary widely from one deal to the next. Many sponsors talk to a securities attorney about how to structure fees and returns.
Do these investors consider deals outside the US?
Bo prefers to stay within a flight of his team, so most of his portfolio is in the southeast US. Chris has looked at India but has not moved forward. Richard says to pick one to three places where you have natural connections.
Put this into practice with the waterfall calculator. See all investor mandates resources.
