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What goes on in the heads of investors?!

What goes on in the heads of investors?!

As an entrepreneur, do you ever wonder what investors think about and care about? Do you wish you knew what they are looking for?

The graphic above comes from a brainstorming session by a group of investors about what is important to them when deciding what to invest in. Specifically, this is a group of investors that we have convened in a due diligence learning group.

Here are some other takeaways from their meeting:

  When we shift money from Wall Street to Main Street we are shifting a power balance and we are directly impacting our communities for the better. As such, we place importance on the health of the investor, the community impact, the inclusivity of the project, and we look for ways to help entrepreneurs win. We consider the impact of the project on the community and the planet along with the potential return that we might make on the investment.

  We consciously question the traditional structures and processes that have excluded so many from access to capital and opportunity. Perhaps an issuer hasn’t raised money before and doesn’t have a track record of previous exits. Do they have other ways to demonstrate responsibility, tenacity, and a healthy mindset? Consider those instead. Be creative. Be supportive.

Would you like to hear more about what is important to these investors and maybe join them in deploying capital (even if you only have a little bit to invest!)? We invite you to join our FREE Due Diligence Learning Cohort, a series of interactive discussion sessions designed to take the mystery out of direct investing. Angels of Main Street Community Manager Amy Short, a successfully exited entrepreneur and investor, is hosting this six week learning opportunity and we encourage entrepreneurs and investors alike to attend. Throughout this series we will be analyzing an offering by Pacific Northwest Rural Broadband Alliance. Meetings are held on Mondays at 5 PM Pacific/8 PM Eastern from Monday, November 1 – Monday, December 6.

This is a free, open to all, inclusive learning experience. There is no requirement, expectation, or pressure to invest in the Pacific Northwest Rural Broadband Alliance offering, although everyone is welcome to do so if they determine that the investment opportunity is a match for themselves and their own goals.

If you are interested in joining, please reach out to Amy Short at to be added to the group. We have completed three of the six calls of the series, and if you are interested in joining on Monday, November 22nd, we would love to share call recordings and resources from previous calls.

What could possibly go wrong? Using due diligence to make investment decisions

What could possibly go wrong? Using due diligence to make investment decisions

Due diligence, a fancy term for doing reasonable research, is a key component in the process of evaluating any investment opportunity. While there are no set rules for the due diligence process, due diligence is expected to be conducted by investors and can be a wonderful learning experience. It’s common practice for due diligence to include review of issuers’

  • Management Team
  • Financial Projections
  • Product / Service / Technology
  • Market Opportunity
  • Go-to-Market Strategy
  • Competitive Analysis

Although issuers expect potential investors to perform due diligence, the degree to which an issuer is prepared and organized enough to facilitate the process varies widely. Entrepreneurs who are launching or managing businesses and raising money simultaneously are often spread thin with little time to spare. Lucky for investors considering investments through a FINRA approved portal for Regulation Crowdfunding (Reg CF), much of the document collection and anti-fraud verification is already complete!

Among the many benefits of Reg CF raises is the transparency and ease of access to the issuer’s business documents. FINRA approved Reg CF portals like Crowdfund Mainstreet collect the issuer’s pitch deck, executive summary, financial documents, legal documents, term sheet, and projected use of proceeds and post them on the crowdfunding page along with a link to Form C —the Securities and Exchange Commission’s (SEC’s) required disclosure form.  These can all be easily reviewed at any time during the raise. 

Some investors take what is colloquially called the “spray and pray” approach to investing.

What’s more, the SEC relies on Reg CF portals to shoulder anti-fraud responsibilities in the form of background checks and securities enforcement regulatory history checks for each issuer and its officers, directors, and owners of 20% or more of the voting equity in the company. Because the portals have already done the work of document collection and background checks, potential investors in Reg CF raises have a head start in the due diligence process and are able to save time and effort. 

Because Reg CF raises have relatively low minimum investment thresholds, combined with the required checks by the portal, some investors take what is colloquially called the “spray and pray” approach to investing. They make many investments across various opportunities without performing due diligence and hope their investments that have returns do well enough to cover the losses of the other investments and, on the average, they come out on top. While the spray and pray approach is common, I recommend a more empowered approach: performing due diligence to at least a degree that reflects the risk and, even better, teaming up with friends to conduct due diligence together. Not only will you be able to share the workload, everyone will benefit from the diverse perspectives offered by various members of the team.

As the Community Manager for Angels of Main Street, I’ll be coordinating a due diligence team for Traipse: My Local Token, an issuer currently raising funds on the Crowdfund Mainstreet portal. Everyone is welcome to join regardless of interest level in this specific issuer. Everyone has something to offer and due diligence is a team sport.  Contact to be notified of upcoming meetings.  Note:  You do not need to be an Angels of Main Street member to join this due diligence group.