As a charter member of the Golden Triangle Angel Network, Diane Wolfenden is a well-respected and visible member of the local investment community. We sat down with Wolfenden to get her thoughts on how the startup landscape has changed over the last several years, and how she approaches a deal.
Changes in the angel landscape
Wolfenden became a GTAN angel shortly after the 2008 financial crisis because she says GTAN offered her an opportunity to diversify her investments and give back to local startups and help them grow. Most venture capital had dried up and angels were stepping in to help fund early-stage companies.
“I knew small- to mid-size companies are responsible for most job creation and I wanted to support this vital sector and give back to our community. I wanted to share the knowledge and skills that I’ve developed to help startups grow and I was drawn to GTAN because it provides a structured venue in which to make investment decisions, alongside individuals who bring differing skills, experiences and interests to the decision-making process.”
Wolfenden says things have changed since then.
“It's far more competitive in the investment space now. VCs are increasingly interested in the early-stage startup space, which is great for the founders, and as a result, we're seeing higher rounds of investment coming from angels as more and more VCs step in.”
Another big change for Wolfenden has been her approach to investments.
“In the past, I focused on intellectual property (IP) and the product and less on the founder and team they've built around them,” she says.
Her focus has flipped as a result of working with the China Canada Angels Alliance. “The angels operating in the Chinese markets have a more global perspective. They laugh at the North American emphasis on IP because, based on their experience, someone is inevitably going to come along and scoop that idea.”
Wolfenden says companies should acknowledge that they will have direct competition and their focus should always be on developing the 2.0 and 3.0 versions of their product. This is why the team and the founder have become some of the most important factors for her when making an investment. She tries to find teams that have the drive and stamina to compete in an increasingly competitive global marketplace and encourages her companies always to be working on the next version of their product to stay competitive.
Founder and team
Investing in early-stage companies means their revenue projections are often “coming out of thin air.” Wolfenden says that's why she doesn’t focus on the numbers to make her decision on where she'll invest.
When evaluating a company seeking investment, she asks herself a couple of important questions: “Where was the idea seeded? Do the founder and team have the passion and dedication, endurance and perseverance to build the company? Are all the members equally engaged? Can one person drive this?”
Wolfenden also looks at whether the founder is open to coaching from investors. Angels are entrepreneurs who have experience that can be invaluable to a founder; angels have typically been in the space and they know how to be successful.
When evaluating companies, Wolfenden wants to see the founder think like a customer. “How much knowledge does the founder have? Is your product solving a problem? Who has this problem does the company have a solid strategy to reach them?”
Which leads to her most important advice for founders pitching for angel funding.
Wolfenden has made a series of successful investments in a diversified portfolio ranging from SaaS to medtech to apps. She isn’t choosy about the vertical but holds true to one statement: Go big or go home.
“I am interested in companies where they have identified a real problem that needs to be solved and where someone is going to pay money for that solution. I like companies with a billion-dollar potential.”
Wolfenden meets with GTAN members for their monthly investment meeting on the third Tuesday of each month. Three companies deliver pitches and the angels choose which companies interest them enough to follow through on due diligence.
If you are interested in pitching the GTAN angels, please apply here to the selection committee.