The issues of angel investments were discussed during special panel discussion at the Moscow International Forum for Innovative Development Open Innovations. One project, presented from the audience without any preparation, attracted the attention of angel investors.
Participants of the panel discussion Business Angels for Russia: just what the doctor ordered? presented to the audience their own understanding of venture capital investment at early stages based on personal experience, they also shared concrete practical recipes and tips that will let venture capitalists avoid mistakes when attracting initial venture capital and interacting with business angels.
Vadim Osadov discribed a framework which most business angels operate in: investing from $10K-$20K to $500K in projects with interesting ideas. However, most IT-software projects require financing from business angels in the range of $50K. It is necessary for projects of $50K to $150K to attract well-known business angels who are ready to take the risk; major projects require the involvement of business angels who are ready for co-financing and risks' sharing.
Alexander Galitsky, drew attention to the experience of WikiMart project which founders attracted five major business angels, who invested the money first and made it possible to gather a large group of investors. According to Alexander Galitsky, the desire to attract major funding from one angel is typical for the Russian market today and it is a mistake since the angels are only the rich people who are willing not only to quietly lose their money, but are also interested in what they invest their money. At the same time, business angels do not only provide financing but also help to make fewer mistakes and use the capital in appropriate way.
Andrei Golovin touched upon the human factor in the activity of business angels. From his point of view, the choice of business angels is like choosing a partner for life, the second half or spouse. You should not regard a business angel as a purse. The communication of entrepreneur with a business angel should not be limited to project-money relations. According to Andrey Golovin, business angel is a guide for life of the project, who is extremely important during the startup period. This view was confirmed by Alexander Galitsky, citing the example of Almaz Capital Partners fund which is attentive not only to the project but also to its business angels.
The speakers of the panel discussion focused not only on how to involve business angels in the project, but also on the need to establish the criteria and conditions of business angels' withdrawal from the project.
The audience of the panel discussion had an opportunity to present a project which could attract the attention of business angels. Despite such surprising proposal, the project presented by an online store aggregator of direct and indirect psychological training services attracted the interest of business angels and the discussion ended with a statement of interest in investments. I am happy to consider this company since there is some money just for educational projects - Konstantin Fokin promised.