Angel Manifesto: Principle 3 by Chris Adelsbach, UKBAA Angel of the Year
I was recently in Tel Aviv to support Techstars Managing Director, Hilla Brenner, in her selection committee. She runs the Barclays Techstars Fintech accelerator in Israel. We were joined by Connor Murphy, another Techstars MD, who flew in from Berlin, as well as a number of senior members of Barclays Bank. Our goal for the day was to assess 20 companies (we had already narrowed the field from many hundreds) and agree to invest in 10 companies. It’s a lot to do in a day. It was not an easy task.
“Unlike angel investing, mentoring costs nothing. It can be done face-to-face or over digital media. It can be done locally and abroad. It allows you to train your gut. But it takes practice. Angel investing is the next step, and similar to mentoring, it also takes practice. So try to invest every year!”
As usual, the companies that made it to this stage were very strong. What was striking though, was that “Startup Nation” was clearly attracting international companies rather than just strong domestic companies. Founders from places like India, Canada and Romania saw Israel as a destination to get mentorship, investment and grow their business. This was initially not something that Connor nor I thought was initially remarkable (last year, 10 companies came to Berlin for Connor’s programme he runs with SAP and none were German). Techstars operates in over 150 countries and we tout ourselves as “the worldwide network that helps entrepreneurs succeed”, however, to some of the attendees it was pretty noteworthy. We had reached a tipping point. The Tel Aviv programme had become truly international. It was now drawing on the best founders across much of the world.
My series of blogs is all about becoming a better investor by becoming a better mentor. Being a better mentor involves being open, inclusive, and in this case, international. The best opportunities are often not on our door step; the best investors may be in a different country; and the strongest partners could be on a different continent. When you meet hundreds of founders every year and invest in 15-20 per year, you begin to realise this. This brings me to to my third principle of the Angel Manifesto.
Principle 3: Invest every year. Being a good angel investor takes practice.
Some people seem to be born with rare talent. However, when you dig a little deeper you often learn that behind this ‘rare talent’ is thousands of hours of practice. This is true in sport, art, science, and investing. Angel investors get better by practising. We train our gut. We learn what company and team attributes result in success. Critically, we learn how we, as angels, can help the founders we back be more successful. We can’t do this if we just mentor a few companies and/or make irregular and infrequent investments. It takes at least 20 investments to have a reasonably diversified angel portfolio. It takes even more to start developing pattern matching techniques to become a great angel investor. One thing I’ve learned is that there are few ecosystems, like Tel Aviv, that have such large concentrations of entrepreneurial talent. As mainly UK-based angels, we are fortunate that talent in the UK, especially in areas like Life Sciences, A.I. and FinTech runs so deep. We are also fortunate that places like London are world cities, where the world comes to us (if we continue to welcome them!)
I’ve been busy the last three months meeting hundreds of companies in New York, Toronto, Stockholm, Paris, Lisbon and London. During this time I made five angel investments: fixed-term fund provider Treasury Spring, option trading platform Gatsby, Machine-learning deployment platform Seldon, e-mail management platform Inbotiqa, and insurance provider for foreign drivers Marshmallow. I also announced a further ten investments made by the Barclays Techstars Accelerator London that was written up in City AM. Every single investment started as me acting as a mentor first. The more I mentor, the more confidence and conviction I feel as an angel investor, which has resulted in higher returns. The better my returns, the more I can do to support founders as an angel investor.
Unlike angel investing, mentoring costs nothing. It can be done face-to-face or over digital media. It can be done locally and abroad. It allows you to train your gut. But it takes practice. Angel investing is the next step, and similar to mentoring, it also takes practice. So try to invest every year!