What attracted you to exploring angel investing?
Two things. I wanted to diversify my portfolio and I have always been passionate about startups ever since I started working for one right out of college (or perhaps even earlier at my first lemonade stand).
If you’re still angel investing, where do you find most of the companies?
Yes, still active. I've found companies through angel groups and networking.
What are the top three things you look for in companies where you invest?
Team with integrity, ingenuity, credibility and the ability to get things done, followed by a focus on a market they can dominate.
How did you incorporate angel investing into your overall portfolio?
Keeping it as a small part (5-10%)
What have you learned since you started angel investing?
How much I enjoy doing due diligence (DD)! As an engineer, I think it's great, because companies are literally showing you all the details of "how it works." :) Since DD is the key to financial performance of this asset class, it's nice that it is within my control to make happen.
What do you wish you would have known before you started angel investing?
- The importance of developing an investment thesis and sticking to it before writing checks. It's one area where diversification is not a good thing.
- Another is not to get swept up in "a great idea or team" because that is insufficient for a great investment.
- Along the same lines, the purpose of due diligence is to filter out companies. There is no point making an investment if DD raises flags (of any color)!
What space are you most interested to invest in next?
I tend to invest in talented people rather than industry sectors, although there are some I do avoid due to my lack of knowledge (e.g. biotech). It's nice to be able to help the company succeed by making connections or leveraging one's experience or network.
What resources should entrepreneurs and angels use to learn more?
Angel groups are a great way to learn the ropes. Find a mentor to discuss potential deals. One thing I did when I joined a local group was to volunteer to help on DD. I explained to entrepreneurs that I was only doing DD and would not be investing until I'd been through the process a few times.