My angel investment mandate

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I recently made myself more visible as an angel investor by adding a couple of startup investments I’d made to my LinkedIn profile.

I’m not entirely new to angel investing (I had already been mentoring startups for a handful of years), but I am still absolutely learning everything.

Though I’m still a small-fry in a very big pond, I’ve become more ‘active’ lately so I figured I might openly share what I’m looking for.

Mandate

I don’t really report to anybody so it’s less of a ‘mandate’ and more a method for maintaining focus, and being strategically intentional.

I currently only invest in startups that are:

  • early-stage (from first cheques until Series A), AND
  • woman-led (at least 30% of available founder stock must be held by a woman), AND
  • focused on; climate-tech (demonstrable CO2 emissions reduction potential), OR edu-tech (solving for talent gap, ie. workforce entering / up-skilling / re-skilling).

These ‘rules’ serve to keep me financially accountable and ensure the impact I want to have in the world while doing what I love — supporting startups!

Reasoning

Why these? Let me explain.

Early-stage — getting more founders and startups into the venture building ‘game’ will make the biggest positive impact on our startup ecosystem and economy. If more money flows to these types of companies, then our economy will shift more toward investment and jobs in these emerging industries. Equally, it is the right ‘risk and reward’ equation for me as an investor. I am limited by the amount of capital I can invest in startups, so the earlier the better. I do take on more downside risk, but I also potentially create more upside reward. Plus my non-financial contribution; in the form of advice, mentoring and network connections would likely be more beneficial early on when this is typically less accessible to new founders.

Woman-led — this is simple, we are not at parity (in 2021, a record year for Australian startup funding, only 22% of capital went to female founders). There is no biological reason why women cannot build, raise venture capital or lead startups to success. Therefore we must change the conditions such that they promote an increase in the number of women founders, and the amount of capital they are attracting to their startups. Arguably this is the most controversial and discriminatory aspect of my approach (yielding some rather uncomfortable conversations with worthy male founders), but it is my goal to maintain this rule until we reach ~50% of female founders getting venture backed. From a financial return perspective, this currently overlooked ‘minority’ group of startups further increases the risk and reward potential for my investments. Put simply, when it works out well, I stand to win more.

Climate-tech — there is no denying we’re in a climate emergency, and fixing it is a gigantic economic opportunity ($4 trillion just for Australia, and more than $100 trillion globally). We need to accelerate our efforts to achieve net zero. This will take a whole lot of technology and business innovation that needs funding to move forward. At worst I am wrong about any commercial opportunity, and while we push to decarbonise our world the outcome is merely a more sustainable place to live. At best, we achieve this and the game changing startups I’ve backed become wildly successful. I’m ok with that.

Edu-tech — the talent gap in tech is an ever growing chasm (there are currently more than 2,000 open roles just across ANZ tech startups), and we’re not patching it nearly quick enough. To accelerate technology toward solving the climate crisis we will need even more skilled people, which means better solutions to the talent crisis are mission critical. Improving access to talent won’t be enough, we literally must bring more talent to market and this is where education comes into play. Solving this ‘skills shortage’ problem is a huge potential investment opportunity for years to come, where positive impacts to society from a more skilled and educated workforce are obvious.

Limitations

When I was in architecture school, I learned that limitations are necessary challenges to produce excellent solutions. I learned to view constraints as opportunities for innovation.

Which site lends itself to more innovative solutions — flat rectangle (left), or steep battle-axe (right)?

It seems counter-intuitive at first, but having a ‘blank canvas’ with virtually limitless possibilities is a huge burden for progress (ask any artist). Conversely, rules and boundaries that are more challenging yield more innovative solutions.

Being a small-time angel investor means that I have limited reach and capital to make investment decisions. Having very firm and clear parameters means I am focused on solving fewer problems, better.

Know exactly what you stand for, and they will come (image source: Matthew Frederick’s excellent book).

The flip-side of being constrained means that automatically I am not the right angel investor for most founders. By default, it means I am only suitable for a small select group of startup founders.

This might seem like a foolish limitation on my ‘pipeline’, but in fact it isn’t. My ‘brand positioning’ means I can very clearly communicate what I represent, and in turn it provides a beacon for founders that are looking for exactly the same thing. While it forces me to be creative and seek further through more networks and regions — it also helps attract the right founders to me. I’d argue this is a strength.

Ask

As you can see, I believe I have very little to lose (other than just money). While potentially I have very much to gain, least of all the positive social & environmental impact.

Now that you know exactly what I’m about and what kind of angel investments I want to make, this is where you come in. Do you agree with me? Do you want to help me create this future together?

If so, please help connect me with founders who fit the bill. I will be incredibly grateful that you increased my reach.