Angel’s Gate: Good or Bad?

First some background: Angel’s Gate is a reality show about entrepreneurs and investors. The entrepreneurs will pitch to four investors and the deal is made on the spot, like in a matter of minutes. In short, Angel’s Gate is the Southeast Asia version of Dragon’s Den. If you’re still confused, you can scroll below for some videos.

I’m hearing mixed reviews about Angel’s Gate, and recently some people have asked me for my thoughts on it. In short, I like it because it’s entertaining to watch. As a reality show, it succeeded in capturing the audience’s attention. I believe many will agree that it is indeed fun.

But its benefits are very much debatable if you look at it from an entrepreneur’s perspective. Let me list two points which I personally find a little wtf:

1. A deal in minutes

The four angels are credible people, yes. They have the money to invest, yes. But what is it like working with them? Is there chemistry between the entrepreneurs and investors that could lead to a meaningful partnership? What details can they offer help to the startups?

My friend, Guyi Shen from LobangClub gave away ten percent of equity in exchange for 12 months of mentorship from two of the angels. Plus, another five percent cut on the money he raised in the future. That’s sad in my opinion (sorry Guyi). Plus, he came in hoping to raise $400,000 but now he has $0. He looks nervous in the video and I believe that the pressure has gotten to him.

Was that a good decision? We will only know after some time has passed. But personally, I find it hard to swallow that one has to make a yes or no decision in a matter of minutes, especially on deals of this magnitude. An incorrect decision will potentially kill the business. There’s no harm giving a day or two for the entrepreneurs to settle down and think about what’s best for themselves. Investment isn’t just about money but also the relationship. There’s no point working with an investor if there’s no chemistry and bond.

2. Plotting

Often, you will see investors plotting against the entrepreneurs to achieve a better deal. That is, to put in as little money as possible and get as much equity as possible. That kinda sucks especially when they are branded as angels. If the purpose is to help the entrepreneurs, then give a fair deal. There shouldn’t be any plotting involved. If you like the entrepreneur and the product, invest. If not, don’t.

But it’s tough, you see. It’s hard to really gauge the personality and the quality of the entrepreneurs if you only spend minutes with them. It takes lots of meetings and discussions to build a relationship. How can I trust my investors if they are plotting against me even before we start working together? It’s a little disturbing and perhaps VC’s Gates would be a more apt name for the show. Catch the “Good cop, bad cop” tactic the angels employ here.

Have fun, no stress

While there are points I don’t like about the show, I believe it is nonetheless a good experience for the entrepreneurs, especially if you play the game right. After all, the startups are the ones who applied to pitch at Angel’s Gate. No one forced them to do it. The way the show is run is explained to them and they all have accepted it.