People fall in love with angel investing for various reasons. Some look to angel investing as an alternative tool to diversify their portfolio with a high risk, high return asset class. Others take this as a passion to support the burgeoning ecosystem and entrepreneurs while keeping up-to-date about business models and applied technologies. However, would you have imagined if one claimed to be pulled into angel investing by accident? Sounds hard to believe, but that was actually how one of our partners got absorbed into this activity! Calling himself “The Accidental Angel”, he shares with us several key insights that he has learnt as a veteran angel investor.
Q: First of all, I believe everyone wants to how your interesting nickname came about!
A: (Laughs) After retiring from my corporate job, I started providing pro bono mentorship during my leisure time to support founders who are seeking for advice. When the founders get the problem/solution fit, they then ask my help to raise funds for their startup. Many times, when I contacted my networks to persuade them of a good investment opportunity, the first question that emerges is “Are you investing too?” Definitely, it sounded counterintuitive if I were not part of the investment round, so I wrote several cheques and since then I began my angel investing journey. From being an voluntary mentor to becoming a full-fledged angel investor, I guess that is why I call myself “The Accidental Angel”.
Q: What does your angel investing portfolio comprise of?
Out of the invested start-ups, a majority is 70% of which are still alivedoing well, 1 of them has been acquired and 30% a minority have ceased operations. The start-ups that are still standing doing well include Metro Residences, Homage, SensorFlow, Souschef , Ohanae. One of the startup portfolio company; Rainmaker Labs has been taken over by KPMG. In addition, I had investments in VC funds as well.
Q: What do you look for in a start-up?
A: Quoting American investor and venture capitalist John Doerr, “Ideas are easy. Execution is everything. It takes a team to win.” First and foremost, I consider the founding team, their values systems and their learning agility. As mentioned, the idea will then come next in line. This depends on the opportunity size, defensibility and executional capability of the founders’ plan. Lastly, there are hygiene factors such as the terms of the investment. Essentially, invest only in start-ups that you believe in and founders that you are fond of.
Q: How do you think the relationship between angel investors and start-ups should be?
A: Most importantly, angels should always keep in mind that they merely investors and do not own or operate the entire business. I have observed on various occasions how angels try to manage the start-up even though it goes in conflict with the founder’s goals and it will only spell doom for the company. Let the founder control how he runs the start-up and always be there to provide him with valuable advice, support and the necessary networks when needed. By creating value for the founders, only then will start-ups flourish and produce a better outcome for your angel investment.
Q: What is your advice to angel investors out there?
A: Keep your options open and help founders for free. Do not solely focus on investing in good startups but also remember to provide support for founders / entrepreneurs as a form of paying it forward. Not only does maintaining your reputation as a gracious angel ensure greater deal flow and investment opportunities, it goes a long way in creating a more vibrant start-up ecosystem.
Q: If you were not an angel investor, what would you be?
A: A poor golfer!! (laughs) Although I play poorly, every improvement brings a lot of joy. Seriously, I enjoy mentoring. Mentoring allows me to learn new knowledge and to apply my principles and experience to help the founders. It seems like experiencing the life of a startup without executing personally. Essentially I am more a Mentor than an Angel.
The Accidental Angel is currently a partner and cofounder at AngelCentral, venture partner at Entrepreneur First and the CEO of Xpanasia Pte Ltd. Previously, he has served as CEO of Pacific Internet and the corporate vice president of Motorola Asia Pacific before retirement.
Metro Residences is a Singapore-based start-up incorporated in 2014 offering rental of fully furnished serviced apartments to corporate travelers.
Homage is a Singapore-based start-up founded in 2016 offering personalized home care by combining curated caregivers with smart technology, allowing seniors to age at home with grace, control & dignity.
Sensorflow is a Singapore-based company kickstarted in 2016 providing full-stack energy management solution with special focus on the hospitality industry.
Souschef is a Singapore-based based start-up building modular, plug & play devices for automated beverage dispensing. Their technology enables them to provide digital bartending setups that are fast, consistent and customisable.
Ohanae was founded in 2007 and delivers comprehensive secure document collaboration for enterprise social, file sync and share, making sharing of data and credentials safer, faster and more private.
Rainmaker Labs is a Singapore-headquartered enterprise developer and consultancy focused on mobile applications for businesses.