Getting into Impact – How to Become an Angel Investor
One of my colleagues recently pointed me towards a brilliant flowchart, exploring how you know if you’re ready to angel invest. Mike and I thought about what it might look like in the impact investing space, but it is true that there is no simple route into angel investing with a social impact lens.
We all know there is no one kind of angel investor, and there is certainly no one kind of angel focused on social impact either. That’s the amazing thing about this sector – people come from such a diverse range of backgrounds. What brings us together is a shared set of values, the fact that we want to support and invest into businesses doing social good.
Some people get into this and know a lot about a particular sector, some know a lot about angel investing, and some know a lot about starting, running and selling a business. I was one of those; I have been on a journey of 13 years from when I sold a business that I had helped to grow. When I started, I didn’t know much about angel investing. I could relate to entrepreneurs and analyse the financials of a business and look critically at a marketing or sales strategy, but it didn’t mean I knew about cap tables and preference shares and how term sheets are structured in angel or venture deals.
I did my first deals on my own. I certainly made mistakes, and then I started to think – okay, what do I wish I had known? How do I find out more about this? Then I met this group – Investors’ Circle. Here was a group full of people like me, and I thought – wow, a couple of hundred people who all care about the things I care about, who have been doing this and know about how it all works. Here are people who’ve made this journey already.
I knew that here was a place for me to learn and also to bring my own experience to the table, support some great entrepreneurs making a difference – and yes, here was a place for me to have some fun. Between us, we could add value much greater than the sum of our parts. So I really did dive in. I looked at deal after deal. Some I invested in, many I didn’t. I sat on screening committees for deals, and emceed some venture fairs. When I started, I didn’t even know what it meant to sit on a screening committee, but I learnt – and then I volunteered to lead screening teams. I helped to start a collaborative angel fund within our network. Eventually I was asked to run Investors’ Circle.
