What Investor am I

Being on the other side of the table as an Angel Investor has given me a more wholesome understanding of the ?VC game’ as well as the investor-founder-relationship. I had several aha-moments and realisations about what, in my eyes, it means to be a hands-on, ?good“ investor and a ?good“ founder. 

One of my portfolio startups recently told me, I’m like a ?midwife“ and ?mom“ at the same time - helping them to give birth to a company but also caring for the new-born company afterwards. Lol. That got me thinking about how I am in my role as an investor.

As with entrepreneurs, there are 1000 ways of being an investor. No right or wrong. I personally strive to be the kind of investor I would like to have. So I'm writing down my "How" and the industry "Hows" that I came to realise worth mentioning to inspire (aspiring) angels and founders + to get feedback on my approach.

• One of my immediate realisations after my first deal was: Oh wow, there is actually no education or academy, no degree or certification for becoming an investor. You can just write a check and bang, you become one. Still, it took me over a year and 4 deals later to confidently talk about myself as an Angel Investor and add it to my LinkedIn . I'm not sure what I feared, but I think the judgement of "real investors" and that I was intruding "their" terrain? Either way, my deal flow has 10xed since then, so as always, letting the universe know about your manifestations can only lead to magical happenings.
• Your startups, and more so their founders, are like your kids now. You don’t stop loving them if they did something wrong. You don’t shout at them for not meeting their numbers. No kid ever throws the ball into the neighbour’s window on purpose. You can’t and shouldn’t abandon your child (unless they commit a serious crime or so). They will stay in your life for years and years to come. It’s the easiest thing to be there when things are going great. But it’s a real commitment when you’re also and especially supportive when shit hits the fan. If you don’t want that, please buy some Silicon Valley tech stocks, but don’t become an angel investor.
• Cheering and complimenting on successes is important. Founders are working hard to achieve all milestones. But they have no boss, no manager who could give them professional credit. So you are the only one who can give that endorsement. The recognition by family or the press is personally important, but it might not mean as much, because only as an investor you have the full professional and objective picture speaking in numbers and personal performance of the founders. Same goes for criticism.
• Ask personal questions. Like how is your mood, how is your sleep? How many hours are you sleeping? If they tell me it’s bad, I‘m worried!!! Because I know that it will catch up with them long-term. So obviously, I will tell them to prioritise getting their sleep habits in order. They might hear the same from their partner or friends, but not take the advice. If it comes from an investor it almost feels like a permission. A permission to take care of yourself, to take a break. I know it’s terrible, but I know I caught myself thinking that way as a founder. Founders took your money to make it 10x, so they don’t want to admit if they’re struggling mentally. But you gotta know. You gotta know, so you can help, take pressure off, maybe suggest getting a coach for the Management. No one is winning if the founder (metaphorically speaking) drops dead. That’s why you should also encourage them to take vacations. Like actually, ask them, did you take a vacation in the past 12 months? No?! You better get out of here! Working through a whole year is unhealthy and produces uninspired and unproductive leaders (imho). Also, having these non-business talks builds deeper trust.
• It’s not your responsibility to come up with a solution for a problem or to save the company when it looks bad. It’s your job to be available, sit down, analyse what went wrong and help them go into their power. Of course you will help with intros and advice on what to do next and if you still believe in the model, you will put more money into the company, even if no one else wants to right now. But if the founder(s) don’t act like a captain and take full ownership for their ship, you either acted like a helicopter mom/dad for too long or they‘re too lazy to do the job they signed up for when they decided to be a founder.
• Offer your help regularly, don’t expect them to think of you all the time. Writing a random text with ?how can I help“ on a regular basis aside from reports and quarterly calls can bring up a topic or needed intro that would not have happened if you had kept quiet. I also like to have a special WhatsApp group with the founder(s), Daniel (who I do all my Investments with) and maybe one or two other hands-on angels. I call it WhatsApp-War-Room and we use it for spontaneous & uncomplicated updates, sparring and decision-making.
• It makes sense to spend actual operative time with the founders in your DD before you invest. Even if you (think you) know them. I ended up not investing in a company after having spent a significant amount of time with them, seeing how they do things operatively on the ground. Before I was so convinced that this was for sure a brilliant investment case. Short-term I might have wasted time because I didn't end up investing, but long-term it might have saved me energy and money. After all you never know. Of course I learned a lot about the market on the go which might come in handy later. But daring to say no to deals even if you're close to closing is a right you must always reserve and be ready to execute as an investor.
• Ghosting means someone is not excited anymore. As a founder I always found it astonishing how excited and pushy someone can be in the beginning, inpatient AF for the first call and then after 2 calls you hear nothing for 4 weeks despite following up regularly. Now I know, if I ghost someone, or let's say take very long to respond, I'm just not into it. As easy as that. I might get excited about it later again if I read their competitor was just bought and realise I made a wrong market/model assumption, but probably rather not. So, if you realise you're not excited, just say no right away. I know from myself that leading someone into a potential investment-relationship is unfair and bad karma. Goes for investing and dating alike, lol. Sometimes it helps to be pushy and fight for the attention. But if someone is really not feeling it, you also don't want to drag them into it. You deserve investors who are excited from start to end. And Angels should only go for the things that excite them from start to end.
• You‘re entering into a strange ?Schicksalsgemeinschaft“ with your co-investors. Following the parent-kids-metaphor, you are basically co-parents now. You get a pretty good impression of how they think, what advice they give and how they would act in a situation where they have the exact same facts as you. The feeling is hard to describe, but you immediately become closer than usually to new contacts, more committed to considering what they’re saying, prioritising them when they pop up in your inbox, even if it’s not related to the joint investment. I guess having made the same decision to invest in the same company makes you trust this person’s decision-making skills. Which is actually quite arrogant - you think you‘re right , so if they think like you, they must be smart (too). *Ego trap*
• If the company is good and numbers are right, there is always money available and people are willing to push to close the fundraise even if it’s the day before Christmas. Decisions can be made within hours or days. If wanted. That applies to yourself, other angels and VC funds.
• It helps to not be a sole lonely angel. I do all my investments with Daniel Reimann-Dubbers through our investment company LionCorn Capital (we are both zodiac Leo and Corn from Unicorn, you get the idea ????). When we started investing we decided to be industry-agnostic and open to anything. Our tickets range from 10k-150k. We never invest if one of us is not 100% convinced. Luckily, we are excited about the same things. I‘m glad I can discuss everything with him openly, because obviously I couldn’t do that with anyone else without disclosing confidential information . So if you want to start investing, consider setting up an investment company with one or more friends, you‘ll be happy that you‘re not the only one taking care of your investments. I also love the concept of the S21 conglomerate, they always have a ?deal captain‘, who is responsible for the deal and maintaining the relationship with the founder.

You might think it takes much time to be a hands-on angel, but it’s actually easy if you’re well-organised. While others play golf or have real kids, I have my portfolio babies. I have only been in the Angel game for 1 1/2 years (first Investment was 150k into Kingsleague in August 2019) so I might change my approach over time. But for now, I am a happy angel mommy ???? I‘m doing this my way, following my intuition. It takes energy for sure, don’t get me wrong - but time and energy is rarely equal!

Anyway, I hope this article was time well spent for you! If there’s only one thing I’d like you to take away from this, it’s the part about asking personal questions. If you’re an investor, go ahead right away and ask your founders how they‘re doing! Kindness ?????

Looking forward to your feedback, experiences & stories!

L