Good Angels Beat ALL Inexperienced Institutional Money

The problem with consumer brand financing that few discuss openly is that the most mature, decent institutional firms don’t invest in brands selling less than $25M in ARR. Or rarely do, and only if the operating team is legendarily trustworthy (e.g., John Foraker’s Once Upon a Farm). 

But, there are still a whole host of smaller PE and VC firms out there with less wisdom and experience. And they have to spend LP money. Their LPs honestly may not trust their judgment any more than you should as a founder. These inexperienced people tend to cause the most problems because they will turn to their portfolio to pressure results when their inexperience has led to poor investments and poor expectation management of their LPs.

Good Angels are easier to find in part because they a) do not have LPs pressuring them and b) can not write large checks that disrupt your cap table too much, even early on. Also, c) there are hundreds of HNWI CPG operating executives who invest small amounts as a sort of retirement hobby investing strategy. Even HNWI prior founders are investing more and more. 

These folks may have strong opinions, sure, but they don’t have the same bullying power as someone with 2-3 Board seats or a weak General Partner being bullied by LPs who stare only at the firm’s P&L and do not understand growth in consumer brands.

Ideally, you have one angel with a CPG stakeholder network of use to you. Other angels can literally be dumb money that are betting on YOU. 

Yes, there are lots of bullies and weirdos in the angel investing community. But, overall, they can do less damage when you approach them rationally and avoid Shark Tank-like equity giveaways.