Curious About Angel Investing? Experts Offer Perspective

Opinion

Startup companies are reshaping many parts of our nation—Detroit included. The city is transforming itself into a hub for digital manufacturing, self-driving cars, and automotive software and technologies. External attention on Detroit is ramping up, as organizations like Techstars Mobility raise the region’s profile and events like Steve Case’s Rise of the Rest tour, taking place in Ann Arbor next week, hone in on local business opportunities.

Not surprisingly, local investors observe an ever-increasing interest in the opportunity startups can present to someone looking to diversify their investment portfolio and fuel their region’s economy. This week, some of metro Detroit’s top startup investors will be working with those who are curious about becoming angel investors at the Startup Angels Workshop.

In advance of the workshop, some investors are offering advice on how to approach startup investing. With dozens of private investment deals under their belts, their guidance can help aspiring angels avoid some of the mistakes and pitfalls they might encounter.

Carolyn Cassin, General Partner of BELLE Michigan Fund

“Jump in! The water’s fine! Startup investing isn’t like giving your money to your money manager. It’s a hands on sport and that’s the fun of it. The first investment is the hardest—it gets easier and more fun every time you invest. The fun in investing is how much you will learn about so many things—you’ll be amazed at how much you already know—and how much your experience and past informs the future.”

Lauren Bigelow, CEO at Growth Capital Network

“Before you invest a dollar, develop your own personal investment thesis. Write it out and stick to it. Have it serve as the decision-making guideline for the deals you do or do not invest in.”

Shane Kelly, Executive Director at Wolverine Angels

“One guiding principle that has served our investment strategy exceptionally well is focus. We focus on investing in teams with deep domain knowledge and a proven ability to execute. The team has to understand how to beat known and unknown competitors. From there, we focus on our own capabilities. We ask ourselves, ‘Will we be able to meaningfully support this company post-investment?’ If we don’t have the ability to help a target company, it’s not the right fit for us.”

Paul Riser, Managing Director of Tech-Based Entrepreneurship, TechTown Detroit

“In a startup ecosystem, seek relationships (as opposed to transactions) and invest in people. Be willing to bring more than a check to the table and don’t hesitate to seek advice from more experienced investors. Last, but certainly not least: enter every investment with the exit in mind.”

Leslie Jump, Founder and CEO of Startup Angels

“There are many ways to wade into startup investing—whether that be via an angel group, investing through a fund or accelerator, an online platform like CircleUp, or with a close group of friends. What’s important is finding something that lets you write check sizes you’re comfortable with and has an investment culture you enjoy.”

Ted Serbinski, Managing Director of Techstars Mobility

“The best advice I ever got was from Fred Wilson of Union Square Ventures, and I’ll share that: ‘Do lots of deals.’ Since he told me that, I’ve invested in over 50 startups. I understand the wisdom in that quote. If you’re new to investing, expose yourself and get involved in lots of deals. It’ll teach you more than any book or conference on the subject.”

For those interested in learning more, these investors and others will be participating in the angel workshop on October 4-5 in downtown Detroit.

Mack Kolarich is the co-founder and vice president of product at Startup Angels, an organization that aims to provide best practices, market research, access to funds, and other resources to aspiring startup investors around the world. Follow @MackKolarich

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