The Loneliness of the Long Distance Angel Investor

In this article I look at the qualities, characteristics and options for the remarkable community of UK business angels who power so much of the early-stage innovation and wealth creation in the country today.

There are few certainties when it comes to angel investing.?You need to see a lot of decks on your journey to be able to expertly pick the winners, or perhaps more accurately, place your bets on who the winners will be. And once those investments are made, you will have to wait typically 4 to 8 years to see a return from each investment. Sadly, the bad news about the failures, will arrive long before the good news and the successes.

So why do it? Why take the risk? Ask most angels and the answer may surprise you that it’s not about the money, it’s about supporting the founders. Many angels in the Stakeholderz community are cashed out entrepreneurs.?They have already gambled on their business ideas, made their mark, and have come out on top.?With this comes a great deal of commercial experience and insight that with their newfound wealth they are keen to offer back as their mentors did to them.

So where to start? For anyone wanting to explore what investments are out there, there are the on-line equity platforms such as Stakeholderz where many aspiring growth successes are turning for their initial seed and early EIS investment.?

These technology-based platforms have in many ways these have come into their ‘hay day’ during the COVID Pandemic.?They allow individual investors to decide at the ‘click of a button’ to invest in ventures that you have come to learn about and meet on-line.?All of this can be done from the comfort and convenience of the home. Platform investing has seen huge numbers of successful investments, however, what stands out for me is the self- contained decision making that goes into this way of investing.?Final decisions often come down to one's own instinct and gut feel. These angel investors are a remarkable community, a type of Special Forces, working courageously at long range and improvising to take wealth affecting decisions with long-term implications.

So what is the alternative? For many angels being able to share their knowledge and at the same time draw on other’s experience is the most successful means of angel investing. This is the heart of the ethos behind syndicate investing!

Syndicates are essentially vehicles to allow investors to co-invest with other successful angels. Many angels can be found in syndicates as lead investors and as high-profile individuals within this asset class. Others like to remain below the radar and away from the glare of publicity. Whatever your ‘style’, there are many obvious benefits to being part of a wider investing eco-system.

There is a remarkable camaraderie and friendship which springs from these groups which coalesce around an organisation, Charter and Syndicate Agreement.?Building on these basics you have the combination of experience; those who have been there, see it and done it and learned valuable lessons along the way. It’s a winning formula to lessen the risk. They can also be a great home to kindred spirits with leisure, lifestyle and other common interests all clustered around the angel investing theme. This a solid foundation of familiarity and trust to underpin everything else. The shared enjoyment of investing in some truly inspiring businesses of the future brings back that element of fun as you see each business and entrepreneur grow and thrive. It often creates stronger relationships between entrepreneur and investor that last beyond exit.

Financially there are also huge benefits. Deal flow is often more forthcoming as members can nominate businesses they feel would be a good fit. And you can reach those deals that have higher minimum commitments that alone an angel could not meet. This in turn gives greater investor rights for that single cheque investment.

The combination of a sense of community, transparent processes, highly screened deals, greater engagement with other angels, as well as greater investor rights makes for a winning combination when taking that next investment decision.

If you are looking to find out more then watch our recorded webinar ‘Is Syndicate Investing Right for You?’ where our Syndicate Chairman and Vice-Chairman go into further detail about the Stakeholderz Syndicate set up, benefits and plans for 2022.