Casablanca, Morocco – As an early stage start up in Morocco, it is challenging to get the capital needed to scale one’s enterprise. Banks require a great deal of collateral, venture capitalist are increasingly going up-stream to larger more established businesses, and other types of capital are just not available. This gap in capital is often addressed by angel investors in the U.S., but as John May and Jim Hunt of “The Angel Resource Institute” outlined, the solution is not to get angels in the U.S. to look at Morocco, it’s about forming local angel groups to meet this demand.
Jim and John met with 15 aspirational angel investors in Casablanca, December 2-6 to discuss angel investing best practices in the U.S CEED facilitated the workshops and ended the week with 9 pitches from CEED Go-To-Market entrepreneurs. Topics included: due diligence check list, valuation process and negotiation, how to address local challenges and the value of angel groups vs. doing it alone. The top three pieces of advice from John May were:
1. Invest in what you know;
2. The more due diligence you do, the higher your returns will be;
3. Post investment engagement with entrepreneurs also increases returns.
The bottom line with angel groups is that investing as a group is all about trust. Trust between the angels and the entrepreneur but also trust between angels. Without this trust, entrepreneurs will continue to struggle to get capital to grow their businesses. According to Jim, “CEED can be the conduit to create this trust. The CEED network vets entrepreneurs for investors but also creates a community of mentors who can become future angels.” We at CEED agree and hope to explore this idea further with the help of the Angel Resource Institute.