Sunday, January 28, 2007

We Need Non-Financial Angels, Too

As noted in previous posts, the Pittsburgh Region needs more angel investors in order to help entrepreneurial companies turn innovative ideas into commercially viable products. Angel investors can be active (either as individuals, or through our local angel network, BlueTree Allied Angels) or passive (investing in Pittsburgh Early Growth Partners' angel fund that was just announced by Innovation Works, or the angel fund being developed by BlueTree), but either way, they can reap financial rewards for themselves by helping the economy grow.

What if you don’t have or don’t want to invest the kind of capital needed to be an angel investor? You can still be an “angel” for a startup firm by becoming a customer for its product or service, or by helping them connect to someone else who could be a potential customer. One of the best ways for a startup company to get a new customer is to have an existing satisfied customer. So the biggest challenge is often getting the first customer. As described in a previous post and in a recent article in the Pittsburgh Post-Gazette, some of our largest companies have stepped up to be customers for promising startup companies in the region.

It’s still a significant investment by the customer – an investment of time as well as the price of the product or service – but one that’s a lot more feasible for some individuals and companies to make, and one that can also be extremely valuable to the startup firm.

How can you become a “non-financial angel?”

1. Contact the local entrepreneurial support agencies like Innovation Works, Idea Foundry, the Technology Collaborative, and the Life Sciences Greenhouse and tell them you’re interested in helping a startup company. Ask for a list of the companies they’re working with now and look to see if any of the products and services could even remotely be of interest to you or your business. If so, offer to meet with the company to explore whether a sale or a demo might be feasible.

2. Welcome representatives from local entrepreneurial firms when they come calling on you or your business to pitch their product or service. Set a goal for your purchasing department to buy a product or service from one new local entrepreneur each year.

With enough angels, both traditional investment angels and the non-financial type, we could accelerate the growth of startup firms in the region and the overall regional economy.


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