How I got into angel investing? – Part 2

How I got into angel investing? – Part 2
Opening the Pandora’s box

After I got into Superfly, as an exciting little angel, the first I did was to add that onto my LinkedIn profile. Listing myself as an “angel investor” was fun – a title I literally just bought for tens of thousand of dollars!

I also saw that there’s a website named AngelList, a site widely used by entrepreneurs and investors as a communication channel and almost a “marketplace” and “shopping cart”. I linked my profile to LinkedIn as well as filled in the rest of the details. So now I have two channels to communicate with startups – my existing LinkedIn profile as well as the newly created AngelList profile.

LinkedIn as a channel
Man oh man! I started receiving messages from entrepreneurs globally on LinkedIn (granted, mostly UK and US). On average, I received (and still do) roughly 10-15 investment opportunities per month via LinkedIn, and I turned down all of them (except one where I did do some due diligence but turned down in the end).

LinkedIn wasn’t really designed for that purpose. For an entrepreneur to reach out to an angel investor is not intuitive on LinkedIn, and it’s harder to send messages (you need to send an unprompted add request with a lead message / elevator pitch, followed by a full pitch and a deck. Not the most straightforward way to do so.

AngelList as a much better channel
AngelList on the other hand is a much easier one. They have a list of featured startups, and another list of trending ones depending on followers and who’s listed as investors / advisors. So immediately there’s some vetting of portfolio behind it. If there are startups I like, I can hit the “Get an intro” button (I might have used this a little too often admittedly) to get access to the management directly. It was great. Angel investors can also list the number of investments they make a year, and on average how much they invest per deal. Startups can then pick and choose who they wishes to reach out to. I receive, on average, another 20-25 requests a month (a little less these days considering I have done 6 deals thus far)

My Porftolio
Since I made Superfly investment, I moved on to make 5 others, 4 of each are direct investments with the startups and one was via SecondMarket.

  • Superfly – An online travel metasearch engine. Other investors include Bill Smith and Jeff Clarke
  • Centzy – A company which allows price comparison on local services, and aggregate offline data and make available which aren’t available anywhere else. The round that I participated in have other investors including Cowboy Ventures, Founder Collective, Lightbank, ff Venture Capital
  • CrowdMob – Mobile RTB, per per performance advertising platform.
  • Bang With Friends – Facebook and mobile app allowing “hook-up” with your friends anonymously. Other investors include Tim Draper
  • NetPlenish – Browser extension price comparison search engine. Investors include Dave McClure, Scout Ventures, Ludlow Ventures and an undisclosed strategic investor.

I did my investment of via SecondMarket, broker of the “Invest Online” function on AngelList. I hated that function. It gives you all the documents which you can read through online, and will give you access to a watermarked version of the company deck for review as well. It doesn’t give you access to the management and you make your due diligence research only on 3rd party resources. To me, angel investment is about getting direct access to the management and see if you share their vision, and whether you think there’s something you can contribute to the company. This was not what I got when investing through SecondMarket. All in all, it’s low quality money with no value-add to it. They also charge quite a hefty commission when raising the money from them. I’d strongly suggest against it to all future startups and investors.

Next time, I’ll walk through some of the philosophies I have when I examine investment opportunities, and what I’ve learnt from doing this.

… To be Continued


Posted on September 28, 2013, in Angel investments and tagged , , , , , , , . Bookmark the permalink. Leave a comment.

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