Dec 16

The answer to success or failure… It’s always the same:


The answer to success or failure… It’s always the same:

“It’s always the entrepreneur. Who are the people? To me, that’s the whole thing.”

That’s what Tim Keane said about halfway through our conversation. The first few minutes, he talked about the intricacies of a QSBS exit strategy without having to pay capital gains taxes. You can’t be an LLC, have to be a C Corp, there’s a 10x gain limit and have to hold it 5 years. Certain industries, stock buy backs and acquiring stock from a 3rd party are disqualifiers. Faltering on any of these criteria will end the opportunity quickly.

All this knowledge of complicated strategy for maximum benefit, and it’s all an aside to the main point: the people. It’s not about intricate knowledge and carefully working a strategy based on laws and stats and spreadsheets. It’s the people.

Tim is part of an angel network successfully investing in entrepreneurs for the last 13 years.

He has concluded that the entrepreneur is the pivotal factor.

“It’s what they do 100 hours a week. Who is this person, do they have a reputation for integrity, is what they’re saying true?” he said. “Why they want to do this is important, what their passion is for the business and where the idea came from.”

Honesty and full disclosure go a long way. The passion for the innovation has to be combined with real business skills.

“Can he lead a team, will people follow him? Can he hire talent, is he in it for the long haul, does he have expertise?” he said.

If the answer to all of those questions is yes, the next step is figuring out if it’s a good fit, if Tim’s team can bring meaningful help to have a positive effect.

“We tend to be at $1 million the first go round. We say we’ll be back future rounds,” he said.

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>