Join Jeff Barnes and me while we look at the powerful effects of understanding the psyche and psychology of investors. Need help getting in front of investors and raising capital? Jeff Barnes has been bringing entrepreneurs together with angels and sharks for over two decades! Most important, he knows how to deal with their unique way of thinking and feeling, which is something you can learn too.
We identify secret strategies and tools that help entrepreneurs score the funding they deserve. Watch, listen and grab the insights. Your business success may depend on it.
Robert Steven Kramarz:
Hi everybody, this is Robert Steven Kramarz of Intelliversity. And this is your vision master podcast. And today, I’m happy to present Jeff Barnes, CEO of Angel Investors Network. Jeff is a featured presenter and exhibitor here at the Freedom Fest in Las Vegas. It’s a privilege to interview you, even though we only have about 15 minutes.
Jeff Barnes:
Sure.
Robert Steven Kramarz:
So, tell our distinguished audience of vision masters, who are entrepreneurs striving to be excellent at running companies, what AIN does?
Jeff Barnes:
Sure. Well, first off, thanks for having me here, Robert.
Robert Steven Kramarz:
Yeah.
Jeff Barnes:
So, Angel Investors Network has been around since 1997. And what we are is a network of investors nationwide and many international investors as well, whose focus is helping entrepreneurs raise capital and scale their businesses. And our network of investors is designed to come together to look at incredible opportunities that you can’t find anywhere else. So entrepreneurs come to us that need help getting in front of more investors, and we get them ready to raise capital. And then when they’re ready and they’ve proven that they’re ready, we put them on a stage just like we saw this morning at freedom fest for our sharks and angels live competition. So yeah, we bring all these incredible entrepreneurs together with our incredible angel investors, our VCs, our family offices, and our fund managers who want to look at deals. And we are the matchmakers in between if you will.
Robert Steven Kramarz:
I see. Now you also seem to be doing a bit of training and education for entrepreneurs regarding how to raise capital? Maybe how to improve their growth prospects?
Jeff Barnes:
Absolutely.
Robert Steven Kramarz:
Is that part of your vision?
Jeff Barnes:
It absolutely is.
Jeff Barnes:
So, our vision here at AIN is to democratize angel investing. And what that means is, without going into all the history, angel investing is relatively new in the grand scheme of things, and it was not open to a number of individuals; it was only accredited investors that could actually invest in private companies.
Robert Steven Kramarz:
Right.
Jeff Barnes:
Okay. So we’re on this mission to democratize angel investing. Well, in order to do that, you have to have really good opportunities for people to invest in, right? We don’t want to go back to the pre securities act regulation era where a lot of people just pitch a great idea, they take the money, and then they lose all the money because they didn’t actually know what they were doing, or they just were not trustworthy, right? And that is where the securities acts regulation came from. But our job is to make sure that we bring great deals to our investors.
In order to do that, we have to coach them and we have to train them. We have to make sure they understand the process of pitching, of presenting. And it is a laborious process. It is not easy. Most companies are never able to get in front of investors, or even if they are, they’re not able to raise capital because they don’t know how to do it. And so, we spend a good amount of time working with those folks to get them ready. And, of course, our investors expect a certain pedigree, if you will, of the companies that we bring to them.
Robert Steven Kramarz:
So, if you recall our conversation last night over dinner, there are some secrets for entrepreneurs to know what motivates and demotivates investors.
Jeff Barnes:
Absolutely.
Robert Steven Kramarz:
That is not usually the normal part of an education that an entrepreneur gets.
Jeff Barnes:
Right.
Robert Steven Kramarz:
So, what do you think is the major barrier that an entrepreneur faces when attempting to breach the mentality of an investor? Get into his need system.
Jeff Barnes:
The first and foremost is like you were saying and alluding to understanding what that investor is actually looking for. Investors are looking for a number of different things. And a lot of entrepreneurs think that I’m just going to try and make my investors money. And if that is where you start, and that is where you finish, then that is surface level deep, right? And if you think about diving deeper into the human psyche and what people really want, making money is one thing. But we’re talking about investors, and we’re talking about people that have money.
Robert Steven Kramarz:
Right.
Jeff Barnes:
Right? And so, if you’re talking to somebody who already has money about making more money, sometimes that falls on deaf ears, and it is not the right pitch. Instead, you have to focus on what it is that would really inspire them to take action and work with you. And that is a very different conversation to have.
Robert Steven Kramarz:
So in your opinion, your observation, what does inspire investors nowadays?
Jeff Barnes:
Yeah.
Robert Steven Kramarz:
To put their money in company A instead of company B.
Jeff Barnes:
Absolutely.
Robert Steven Kramarz:
Assuming both look good on paper, financially.
Jeff Barnes:
Yeah. Assuming both look good and they’re both really good opportunities, there is a number of things that will prevent somebody from investing in a versus B or B versus A. And sometimes that comes down to just comfort level, right? So, if I’m really knowledgeable and say the internet of things, and somebody gives me an internet of things, investment opportunity, and another person gives me a crypto investment opportunity, and I don’t know enough. I won’t feel comfortable making a decision. And as a result, I’ll probably go with the AOT route because I feel more knowledgeable about that, right?
And here is the funny thing about that, is that when somebody is knowledgeable in an area, and they get to do something that other people don’t, they get bragging rights, right? And so, those bragging rights can carry over to the golf course of the country club, sitting in the salon, the ladies can talk about it, and they get these bragging rights. Now, here is the thing about bragging rights, it doesn’t do you any good if you don’t know what you’re talking about, right? If somebody can poke a hole in your argument within a minute, then you have not really propped yourself up properly.
Robert Steven Kramarz:
Which is one of the reasons why you’ll tend to invest, or I would attend to invest in companies I know something about so that I can defend my bragging rights.
Jeff Barnes:
Exactly. Right. Exactly. Right. Imagine if you could go to your friends who, again, birds of a feather flock together, right?
Robert Steven Kramarz:
Right.
Jeff Barnes:
So, these people will hang out with each other. And imagine if you went to your friends, say, “Guess what? I just invested in this really cool company called Google, and they’re going to go IPO. And they’re a multibillion-dollar company.” How cool does that make you sound? Now, if you can’t talk about what in the world Google is in the first place, well, you just sound like an idiot, right?
Robert Steven Kramarz:
Right.
Jeff Barnes:
We don’t want that.
Robert Steven Kramarz:
Right.
Jeff Barnes:
So we have to educate our clients on what to say to help people with that decision. And the funny thing about that is that most entrepreneurs want to sell their products. They can’t sell their vision properly. And if they can’t sell their vision about where their business is going and what they’re doing, and the impact they’re making in the world, then it is very difficult to get an investor excited about their opportunity.
Robert Steven Kramarz:
So how do you coach a company, a CEO, to sell his vision or her vision? So that investors, assuming they want the bragging rights, are now excited about this particular company.
Jeff Barnes:
Yeah. That is the challenge, right? So, a lot of entrepreneurs will come to us with these grandiose plans. I’m going to build a billion-dollar company. Or now the latest thing is I’m going to build a trillion-dollar company. It is not a unicorn anymore; it is a Pegasus, right?
Robert Steven Kramarz:
Right.
Jeff Barnes:
So we get all these different things that are coming to us. And as a result, we have to help them understand that it is great to have a really big vision, but it also has to be somewhat believable, right? And making it believable while also making it grandiose is challenging. You got to get them there.
Robert Steven Kramarz:
You do!
Jeff Barnes:
It is definitely a balancing act. And so we walk them through the process of what does it look like 5-10 years from now, assuming your company succeeds? What does the world look like? What is different about the world? Not just about you, not just about your business, not even just about your investors. What is different about the world that we’re living in?
So, for example, one of the companies that have come to us is trying to change the future of energy production. Okay. They’re literally trying to upend the situation with oil crises and the exorbitant gas price that people are paying. So it is relevant; it is in the minds of the consumer right now, which means it is also in the minds of the investor. And so talking about what the future of this maybe energy-independent world could look like is important. And if you build that story. We talked about using the hero’s journey and all these different story art things that you can put into there. If you do that properly, then you get engagement from your audience, your intended audience, which in this case is investors. They can start to see the vision with you. And if you can’t do that, if you can’t get them to see it as well, you’re never going to get by in.
Robert Steven Kramarz:
So it sounds to me like you’re going to be a big fan of our story pitching.
Jeff Barnes:
Absolutely.
Robert Steven Kramarz:
Concept. Well, let’s wrap this up by telling our vision masters how they can reach out to the angel investors network? How can they make a connection? And pitch you on their vision? And maybe there is a relationship that can happen. How do they get over to you?
Jeff Barnes:
Yeah, absolutely. So the easiest thing is going to just angelinvestorsnetwork.com. And on our site, we have a way for entrepreneurs who want to apply to come to our competitions; they’re able to do that. We have a way for investors who want to join our memberships so they can see the deals can get access to all the resources. And the way our membership is structured is that we bring investors and business owners, and entrepreneurs together. So we can essentially mastermind and collaborate on these ideas and help them come to fruition and actually scale up these businesses and make a meaningful impact in the world.
Robert Steven Kramarz:
What a trip it is to meet you, Jeff.
Jeff Barnes:
Yeah. Robert, it has been a pleasure. I really appreciate you having me here.
Robert Steven Kramarz:
And I want our audience to know that story pitching is actually a method that we teach at Intelliversity. And if you want to know more about story pitching, make sure you go to Intelliversity.org. You can speak to me personally @ inteluniversity.org/connect. So we’re looking forward to hearing from you too. But above all, make yourself known to Jeff and Angel Investors Network. It is probably a good idea.
Jeff Barnes:
Awesome. Thanks, Robert. I really appreciate it.