Start angel investing
You may have dipped a toe into crowdfunding, a stocks and shares ISA, or even selected individual companies to invest in. Angel investing is a (big) next step – building a diversified portfolio, where you invest in founders as much as you invest in their companies and concepts.
Angel investing is a serious business. For one, you could lose money. Second, some entrepreneurs will not only ask you for cash, but may also lean on you for other things: your expertise and advice, and maybe even emotional support. Angel investing can be a time-consuming yet immensely rewarding role, and one that potentially brings big financial returns if you can spot the right opportunities.
Skillset to get started
- It takes time to diversify your portfolio: speak to founders, research companies and do due diligence. Once on board, certain founders may also ask you for introductions, referrals or feedback. You will need to figure out how much time you can regularly dedicate to your portfolio, and be consistent with it.
- Self-branding: Whether via networking events, on social media and other channels, spreading your message about your background, track record and experience are important. Founders want cash, but they also want the right angels on board. The more well-known you are, the more relevant opportunities will come your way.
- Reciprocity: Some founders will want cash very quickly, at early stages of fundraising. You may also ask founders for certain documents or other resources and expect it quickly. It has to go both ways.
- A realistic, can-do attitude: Not everything goes to plan, and some companies will not be successful (hence why a diversified portfolio is so important.) But it’s good to stay positive and encourage founders – the people you’ve invested in – to keep going. And sometimes, to encourage them even in hard times.
- People skills: It is super important to make connections, and keep relationships with founders and fellow investors warm. It drives opportunities for you as an angel, and it can reap rewards in the future, especially in the relatively small ecosystem of angel investing.
- Laser focus: Founders really value working with angels who are clear about what they are looking for, and who are concise and precise with their asks. Plus, many angels only keep aside a small chunk of time to speak to founders e.g. 30 minutes a week. So, it’s a good idea to decide what you need to speak about, and stay on track.
This list of skills aside, building a network of people, opportunities and investments takes time. It certainly doesn’t happen overnight. You will learn from others, and learn about yourself along the way. It’s all part of the journey.