There are not enough angels in the local startup scene and that needs to change
If she could, our Gabey would become ‘the most kick-ass angel investor ever’
IT’S a new year, and thus perhaps fitting to start off with a little dash of optimism sprinkled on top of a whimsy sundae.
So dear reader, allow me to present my humble-yet-grandiose and fanciful tale of what I’d do if I won the lottery.
For the sake of today’s exercise, let’s just say the payout is in the range of a few hundred million.
Talking about what one would do after winning the lottery is a popular ‘what if’ discussion for any group of friends, and most people would already have a game plan.
My own involves doing the sensible stuff first. Meaning I pay off all my debts, take care of my family (and the two blasted cats), buy some property and build up a decent stock portfolio.
Then I’ll buy myself first-class plane ticket, travel the world for a few months and whatever’s left after that becomes ‘money to burn.’
In older versions of this game plan, options for spending that final chunk of cash included rebuilding my sibling-destroyed collection of graphic novels, throwing the biggest party known to man, and creating an African safari in my backyard, complete with miniature elephant.
But recently I’ve decided to revise that last bit to ‘Become the most kick-ass angel investor ever.’
Why? Because every once in a while, I come across a startup that sparks an instant ‘shut up and take my money’ moment, making me wish I truly had the funds to throw at them.
(Of course, as a journalist, it is not ethical to have a stake in the companies you write about. Besides, we barely make enough to invest in ourselves, let alone others, but that’s just natty little details that get in the way of fiction and dreams.)
If I were an angel investor, my investment philosophy would be to be bold and eclectic. From enterprise solutions and high-tech innovations to consumer products and services, I’d embrace all categories, including the plain weird or interesting stuff.
I’ll fund the talented underdogs, the dreamers, the calculators, the passionate and the determined.
If I were an angel investor, I’d find a role I can play unique to each and every one of my investee companies to help them in their journey, beyond just writing that cheque.
If I were an angel investor I would be honest, I will be blunt, I would not micro-manage, and I will set the bar high. I will commit to being their biggest advocate and critic.
My only criteria would be that the startup has to move me. The product needs to inspire and excite, and the team must, of course, be up to the task.
Over and over, you hear people say that ideas are cheap and that the best indicator of success lies in looking at the people behind the venture.
If I were an angel investor, I would not just look at fancy degrees or pedigree, but dig deep into the psyche of the person standing in front of me with nothing more than an idea and hope.
Tell me about how you and your brother started a side business at school selling Magic the Gathering cards to naïve juniors. Tell me about how you helped out at your father’s restaurant during the holidays or about your first startup and how it flew or crashed.
Experience of all shapes and colours count. And it tells me something about the way you look at the world and handle problems.
If I were an angel investor, I’d tell my startups that they should never give up but I’m okay with the possibility of them failing.
I’d tell them, it’s okay that they burnt my money trying to make their dreams come true. (After all in this scenario, I already have my stock portfolio and properties, so they won’t be bankrupting me.)
I’d tell them that failure would be the price of their education, and that it’s only a true failure if they don’t learn from it, pick themselves up and move on to the next venture.
And of course, if I were an angel investor, I’d make sure I have access to a crack team of private investigators, forensic accountants, corporate lawyers and professional managers.
Why? Allow me to break it down for you:
Private investigators to vet prospective investees to look for red flags and make sure there are not too many skeletons in the closet.
Professional managers to call upon to help startups transition and better manage their growth.
Forensic accountants to track the money, how it’s spent, on what, and if there’s any missing.
Corporate lawyers to draft up contracts and ensure that my overly trusting angel investor ass is covered.
What? This may be a wistful work of fiction but I’m not a complete sucker.
I write this in the vague hope that someone out there with an extra pile of money sitting in a corner will read it and seriously consider becoming an angel.
There are not enough angels in the scene and that needs to change. Startups can’t always rely on government sources for funding, with their labyrinth of paperwork and unique conditions.
And in my honest opinion, that route should be considered a last resort.
Becoming an angel investor also means that you have looked deep inside yourself and are ready and willing to take on the highest of risks in the business game – to have faith in things unseen and in your fellow human being.
Here’s to 2014 being a great year!
This column originally appeared in the Metro Biz section of The Star and is reprinted here with its kind permission.
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