How long have you been doing angel investments and how do you do it?
I started to get involved in angel investments in the last quarter of last year.
How did you get into it?
After spending a bit of time in San Francisco and experiencing the vibrant start-up scene there, I started thinking about the opportunities in Singapore. I realised that the government had decided that they wanted to develop the start-up scene and were throwing a bit of money at it in the form of grants and investments. o From time to time, I like to think about where I’d like to be in the future and what I might regret having not done, knowing what I know now. Considering my background and personality, I figured I’d be disappointed if I didn’t get involved with the angel investment scene if the government was successful in creating an ecosystem here.
What were you doing before?
It’s not like I’ve given up my day job to become an angel as I’m an investor by trade. I look at angel investing as another asset class, as a means to be able to access ideas or themes that I believe have potential and don’t see it as something completely dissimilar to what I’m doing on a daily basis, although the themes vary somewhat.
What sectors do you like?
I am a fan of productivity, communications, commerce platforms, machine learning, big data and ad tech.
What are the key criteria when you look at an opportunity?
There are a number of other things that I’m looking for as well that are more difficult to quantify. I’d say that I have more of an institutional process because of my previous experiences, which I’m trying to dampen somewhat because of the nature of angel investments. I’m still building the quantifiable aspects that I look for but so far I have:
– Unique idea that could change the way we look at things, something that
– Low egos of the founders, with a high level of focus and belief in the mission
– Economies of scale for the product that they’re aiming to create would be obvious in hindsight that they’re trying to accomplish
Where do you find your opportunities?
Talking to people and being involved with angel networks at the moment. As I mentioned above, I’m currently spending a lot of time building out my networks in the hopes that some of the better ideas will be filtered through to me in the future.
What is the main challenge in this activity?
– Changing the way that I think about investments from a more linear process to being exponential.
– Creating different methods to manage the risk inherent in angel investments.
Tell us your memorable experience or success story.
The health food company that I invested in while at the hedge fund in New Zealand went on to realise a 44% IRR when exited after my departure. The outcome was the result of having a reasonably good management team, great product and some favourable timing. We were just lucky that we were able to participate in their good fortune.
What will be your advice for any start-ups that would like to talk to you?
Be honest – About funding requirements and risks with the business. Also be honest with yourself, are you creating something unique that could add value to society that you truly believe in or are you just doing something to pass the time.