As an entrepreneur himself, Joe Beverly prioritizes value proposition when it comes to reviewing startups he’s looking to invest in.
“I have to understand what value that company is going to provide their customers in return for the cash that they’re going to get from the customers,” says Beverly, who was recently named the new president of the Atlanta Technology Angels. “And if I can get to a relatively quick understanding of that and buy into that, then that’s what gets my interest and that’s what make me say, ‘Okay, yeah, I’m willing to investigate this a lot further.'”
The ATA is one of the country’s top angel investing networks; it connects angel investors like Beverly with early-stage, high-growth businesses. His main goals are to streamline the process, provide resources for founders to more easily identify that value proposition, and effectively help them find the investment to scale.
Currently, following an initial screening session, a company only has about 10 days before presenting to the full membership.
After the entrepreneur presents to the full membership, due diligence begins in earnest if members are interested in the company. Doing full due diligence on a company can take weeks or even months since many ATA members have full-time jobs. The delayed due diligence period can be cumbersome for the members as well as the entrepreneurs who are waiting for an answer.
“In the past, I’ve seen it fall apart there, or you get into some significant delays where it just takes a long time,” says Beverly. “One of the goals is to screen them a month before. That’s going to give us time to do more due diligence and by the time they present to the membership, we’ll have a pretty good feel that this is a good solid company. Hopefully the company will be more likely to get funded as well.”
Following the meeting with membership, it often takes about three months for the members to make an investment decision. “That’s frustrating to the entrepreneur,” says Beverly. “They don’t know if they need to keep putting effort into the fundraising from other sources, or are these guys going to come through for me and I’ll be able to raise all the money I need?”
To solve this issue and streamline the investment process, Beverly wants to use an investment management company to help move along the due diligence process as well as lighten the administrative burden to speed up the timeline.
Beverly’s past experience with his own payroll services company will help him steer the angel group in the right direction. After a few summers working at IBM in college, Beverly went into computer sales, working both in Atlanta and Germany. In 1984, he started his own company selling PCs to small businesses, eventually pivoting to payroll software in 1991.
In 2013, he jumped into angel investment.
As a primarily software-focused entrepreneur, Beverly invests in what he knows best — B2B startups that are making waves, with a focus on Health IT. His advice to founders is to do their research on specific interests before reaching out to investors.
“I’m not an average consumer,” says Beverly. “I have a tough time trying to figure out what consumers like or want. If it’s a consumer-oriented business, I’ll certainly listen to what they have to say. I’m not saying I would never invest in a B2C business, but it’s just tougher for me to wrap my hands around.”
Another characteristic that he looks for in founders during meetings is signs of absolute integrity. “It doesn’t take but one small untruth to send me running for the doors,” says Beverly. “Any entrepreneur that thinks I can tell this little white lie and nobody will know or they won’t figure it out, or if they do it won’t be a big deal, that’s not true.”
He also adds to that knowing your audience when preparing your presentation, as he recalls a medical device company’s pitch where they included cadavers and pig studies in the slide presentation. “It might be fine making that presentation to a doctor who’s going to use the product,” says Beverly. He cautions that an investor is not a client.
Up next, Beverly hopes to move forward with making processes more effective within the ATA as well as make strides on forming a fund within the group to make more strategic investments.