The Cautious Backer (Angel Investor)

Cautious Backer

The Cautious Backer venturing type is more commonly referred to as an Angel Investor, usually private, in the traditional culture and lore of entrepreneurship. As a Cautious Backer or Angel, you generally have knowledge of the Entrepreneurial Success Script. As an angel investor you likely have the resources including both money and/or time available in your career to become involved in venturing. Often you may pursue a new venture on a whim, a hunch, because of your competence an Angel.

Although you are confident in your abilities, you are a conservative businessperson in nature. What sets you apart is the presence of resources, general knowledge of specific activities in the venturing world, combined with your belief in the value of an educated guess making you a good angel investor candidate.

Cautious Backer or Angels are leaders by example and because of this you really are a highly desirable venture leader and teammate.

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Example of a famous Cautious Backer

Warren Edward Buffett (born August 30, 1930) is an American investor, businessman, and philanthropist. He is one of the most successful investors in the world and the primary shareholder and CEO of Berkshire Hathaway. Buffett is called the “Oracle of Omaha” or the “Sage of Omaha” and is noted for his adherence to the value investing philosophy, and for his personal frugality despite his immense wealth.

As a child, Buffett sold chewing gum and weekly magazines. Filing his first income tax return in 1944, Buffett took a $35 deduction for the use of his bicycle and watch on his paper route. In high school he owned pinball machines placed in barber shops. When he finished college Buffett had nearly $90,000 (measured in 2009 dollars) in savings. Shares of Berkshire Hathaway, his holding company, have returned 1500 percent since 1990!

Typical of the Cautious Backer entrepreneur, Mr. Buffet has focused on putting himself in the position to be able to be involved in business ventures, but has been reluctant to start them and run them himself. From a young age he seemed aware of the entrepreneurial “success script” or certain way or to start a successful business. And he has specialized in having the financial resources, human resources, and other key ingredients to enable his involvement in new business ventures. But he has preferred to not personally run the business ventures, instead assembling the resources for someone else, and then taking an ownership position for his efforts. In his early days he likely suspected that guesswork was a significant factor in his business decisions, but of course that diminished with experience and success. Even so, he was and remains a Cautious Backer.