Quinna Sypher and Michael Burke are second year MBA students at Willamette University. In September 2023, they were newbies participating in real life investment decisions with the Pasadena Angels before their year-long course in angel investing had technically even begun. 

With a background in finance, Michael had some preconceived notions about what angel investors would focus on, but the experience has included both confirmations of their academic lessons as well as unexpected revelations. In Michael’s case, he was expecting debates about ARR, CAC and maybe GTM strategies, maybe MVPs and TAMs and SAMs. They heard those, but they also heard a lot of discussion of intangibles, opinions and judgment.

How much can you learn about angel investing in a classroom? I suppose that might depend on what you think angel investing is. Professor Rob Wiltbank has a passion for teaching angel investing to the MBA students at Willamette University, and he’s making a good case that there’s a lot that can be learned from a course, although much of what students learn isn’t technically in the classroom.

For several years, Willamette MBA students have been participating in the Pasadena Angels’ Wednesday breakfast meetings where founders pitch their companies. Up and down the west coast, seven other angel groups entertain different pairs of MBA students at their pitch evaluations. And, the students aren’t just listening. They are evaluating and investing serious money.

They monitor a portfolio of investments and evaluate potential new ones. Each pair of students joins an angel group like Pasadena Angels and participates from September through May. They bring promising opportunities back to their fellow students and pitch them with the hope of making one or two investments during the course of the academic year. 

So, I asked them the obvious question: horse or jockey? They were both wise enough not to be baited into accepting the premise of the question. It’s both, of course, but they had thoughtful insights into the question. Both of them emphasized the importance of effectual thinking. 

Professor Wiltbank is big on the idea. It’s about applying adaptive thinking to problem solving, and there are a number of creatively-named principles involved: the lemonade principle and the crazy quilt principle among them. 

They also described their approach to evaluating pitches. Before you hear the pitch, boil your queries down to two key questions, the answers to which will determine your investment decision. Then, during the pitch, focus on getting those questions answered. Also, evaluate the entrepreneurs themselves and their ability for effectual thinking. How have they adapted and how would they handle a pivot?

Quinna has been able to attend the pre-screen meetings, which has enabled her to see the difference between the pitches before and after a Pasadena Angel liaison has coached the presenters. She has observed rough pitches turn into compelling presentations. She says that just being able to compare those two has been enlightening. Observing the differences in what is emphasized and the order of the information presented reveals what the angel investors value as well as how to communicate effectively to them.

At Willamette, the course in angel investing starts with academics: research, fundamentals, rigorous analysis. Then it proceeds to the more intangible concepts and hands-on experience: evaluating pitches, doing due diligence, following up on their own portfolio, and ultimately pitching each other with the best opportunities and finally closing an investment. At the end of the year, they make a final presentation to the fund’s board of directors.

Can you teach angel investing via a course? If it were only about calculating ARRs, TAMs, etc. and using SAFEs and spreadsheets, then of course. And, the fact that angel networks have implemented training of their own is a testament to the fact that some aspects are amenable to formal learning.

But, those elements of angel investing don’t address the real essence, which lies in the judgment to make the right calls, such as: Are the founders adaptive? Do they have integrity? Will the product resonate with customers? These questions are clearly less amenable to classroom frameworks, but that is not to say that academic concepts have nothing to contribute. Concepts like “effectual thinking” can contribute to how investors think about opportunities, but keen judgment and the ability to apply decades of business experience to help solve a portfolio company’s problems are hard to teach.