“Your plan will evolve, but it’s important to have one.”
START-UP SPOTLIGHT from the Invested Investor, published in partnership with AngelNews
In partnership with AngelNews this month’s Start-up Spotlight focuses on Sarah Turner a technologist, entrepreneur and angel investor. She's spent most of her career working in and around digital technology in the UK, Europe, US and Asia. Sarah works as both an advisor and connector for start-ups as well as corporates. In 2014 she co-founded the award-winning angel network, Angel Academe.
Angel Academe invests in women founded and co-founded technology start-ups with high growth potential. Investments include: Provenance, which uses the blockchain to provide food supply chain transparency, Raremark which uses AI to help patients with rare diseases make informed choices about care, and Fiskl, a fintech for micro-businesses.
Angel Academe investors are mainly, but not only women. Some of them are entrepreneurs, others are senior professionals, some have portfolio careers or are on career breaks. They pool funds and resources to evaluate investment opportunities, make investments and then support the entrepreneurs they back.
1. Why/How did you become an investor?
It was a natural progression. I’ve had a career in tech and consulting, much of it working with start-ups and have been lucky enough to make a decent living along the way. I wanted to do more than just give advice. Investing means having “skin in the game” with entrepreneurs you believe in and are recommending to others.
2. What do you invest in and at what stage?
Most of my investments have been in women-founded tech companies. Women, because I think they’re great entrepreneurs, yet still face additional barriers when raising investment, and tech, because that’s where the potential returns are. I prefer businesses that are addressing problems I can relate to, usually B2B, and started by people with relevant experience. I like to see some commercial traction before investing.
3. What are the challenges faced when you become an investor?
There are lots of myths about what you need to be an angel which I think put a lot of people off, including me initially. That you need to be an exited entrepreneur yourself, have technical expertise to invest in tech, be super-wealthy or have a lot of time on your hands. The reality is that most people invest as part of a network, so you can lean on other investors’ experience and expertise in say technology if your background is finance or HR or marketing and vice versa. It’s much less risky as part of a group and a lot more fun!
4. How do you characterise success?
It’s important to aim for financial return. My funds are finite, so of course I want to see my hard-earned money deployed productively. But the financial returns can take a long time to materialise and many of the businesses I’ve invested in won’t be as successful as I had hoped, despite all our careful due diligence and support. So it’s important to love the journey too. It’s a real buzz to work alongside smart investors to understand each business and see investment rounds come together. It’s also soul-enriching to help founders think about the different aspects of their business, from talent and strategy, to cash flow and operations and to support them through the most critical stages of growth and capital raising. I've learnt a huge amount and met some amazing people along the way, all of which have helped me both professionally and personally. And finally, success for me is, helping to decide which new technologies get to market and potentially shape the future.
5. Please give top three factors that influence your decision to invest.
Everyone says this, but first and foremost is team. Do the founders have the right combination of skills and experience to make this work at scale? Are they adaptable and self-aware enough to overcome the inevitably huge challenges ahead? Are they tough and tenacious enough to last the course? Do they behave with integrity?
The problem the business is addressing also needs to be big, interesting and lucrative and in a sector that’s ripe for disruption.
Finally, what progress have they made so far in winning customers and convincing experts in their field to join as investors and advisors?
6. If you could offer an early investor one piece of business advice, what would it be?
Your plan will evolve, but it’s important to have one. Will you be doing a small number of investments each year, out of income or do you have a lump sum to deploy? You’ll need to invest in several businesses and be prepared to follow-on with the ones doing well in order to maximize your chances of a good return.
Finally, find an angel network you like with experienced but welcoming members, with high quality deal-flow in sectors you’re interested in and good processes for filtering opportunities and investing.
Woops, that’s 2 pieces of advice!