Ohio TechAngels Developing Best Practices in Angel Investing and Company Exits

Ohio TechAngels (OTA), the nation’s second largest angel investment group, may not have written the book on angel investing… yet, but they’re getting close.  Over the course of the last few months, OTA has been gaining recognition within the angel investment community for its development of best practices and a more formulaic approach to achieving lucrative exits for the portfolio companies in which they invest. 

OTA’s unique approach to exits began last June when OTA members began to ask how they, as angel investors, could best serve the needs of both their portfolio companies and their investors. 

"This project's goal is to make our OTA director the smartest one in the board room about facilitating and accelerating lucrative exits for all shareholders," says John Huston, manager of OTA. 

To launch the project, 30 of OTA’s 282 members dedicated more than 900 hours to sharing their expertise and experiences while studying research materials, books and industry reports to determine best strategies for better ensuring profitable exits for entrepreneurs and investors.  

OTA came up with eight key initiatives and organized members into teams dedicated to creating the strategies, materials and tools for implementing these initiatives.  Initiatives ranged from making sure that there was a board member on every portfolio company whose expertise included successful exits, to making sure that bookkeeping records, intellectual property and other key business concerns were in proper order so as to streamline and facilitate the acquisition process. 

Resulting from these strategic initiatives was a series of tools, checklists, worksheets and reporting mechanisms to be used in order to make sure that, as Huston puts it, the OTA member is the smartest person in the boardroom when it comes to exits. 

"Our goal is to provide them [OTA directors] a host of tools that make it easier for them to keep the board focused on positioning the company for sale."

Next will be three sessions with OTA's directors to explain the new tools (34 in all). Then portfolio CEOs and directors will brainstorm with Jon Fisher, author of Strategic Entrepreneurism, on his unique approach, which enabled him to sell his company Bharosa to Oracle.  

"The most acquisitive companies in the world must use formulaic processes to buy and integrate so frequently.  An entrepreneur's understanding of these processes increases the chance of a successful exit illuminating a path of least resistance, maximum payoff and lowest risk," Fisher says.

"We didn't do anything that is brilliant,” says Huston. We are simply trying to design an efficient process for the pathway to a lucrative exit."

And as a result of this concentrated effort, perhaps OTA will be able to write the book on best practices in angel investing and exits. 

For more on this story, see Huston’s interview with the Angel Capital Education Foundation.   
http://www.angelcapitaleducation.org/newsletter-detail/289-id.209715360.html