Why should I be an angel investor? Part 2

Angel investing is an alluring, challenging, exciting, and opaque endeavor. Our goal with this blog is to shed light on everything from why it’s important to angel invest to how to do it well. In this inaugural series we interviewed several angels about their motivations for investing in start-ups. Some of these angels are prominent and prolific while others are just getting started. Motivations range from pure financial returns and identifying an opportunity in the market to supporting the entrepreneurs who are building the next big thing. No matter the motivation, these individuals all love what they do.​​

I’ve always loved building things, that’s why I spent the first 20 years of my career with startups in the security space. If you’d asked me a few years ago what I planned to do next, I would have pulled a ratty piece of paper from my pocket with a list of business ideas and I would have told you that I was going to start a business pursuing one of those ideas. As I pondered and refined these ideas, I started to meet people that were already pursuing some of them and on more than one occasion I said to myself, “I’d rather back this person than compete against them — they’re someone that I want to work with”. So, I invested in their venture and scratched that idea off the list and added a new one. This happened a few times and I started to realize that investing was scratching the itch to “build something new” in a different way and in a way that I thoroughly enjoyed. More importantly, I was able to work with inspiring people driven to achieve their vision, no matter what it took to get there. Rather than focusing on one initiative at a time, I could focus on several. Eventually, I quit my day job, went into investing full time and never looked back.

I often tell people that being an investor is like being an aunt/uncle, whereas being an entrepreneur is like being a parent. I get to do the fun stuff — collaborate with the team and share my knowledge. The entrepreneur on the other hand has to deal with everything — good and bad. As the Uncle, I get to stop by and play with the baby, but when the baby starts crying I can always hand them back to the parent who has to stay up with them all night because they’re sick. I feel very fortunate to be able to do what I do.

-Michael Sutton (@michaellawsutton)

I had been investing in VC deals for three years before I made my first angel investment. I wrote a $5K check to a friend who has since shut down the business. Honestly, I only invested because she asked directly, and I finally had a bit of cash after working for a few years post business school. But once I invested my own money, I realized I wanted to put way more of my personal cash into VC funds and angel deals, as I believe in the potential of strong returns in this asset class, especially with the network of founders and investors I’ve developed over the years. I have now invested $1K to $25K checks across 40 companies, and I continue to do a handful of deals each year, with my average check size still at $5K. I want a lot of at bats at the early stage because I’m looking for a few decacorns that can 10x the entire portfolio. I have also started making small investments in emerging VC funds, as I believe these GPs have access to unique and differentiated markets that can add strength, diversity, and alpha to my overall holdings. I always make sure there are no conflicts with my role as Managing Partner at Vitalize, and I believe putting my own capital to work has made me a better VC investor. In my angel and fund investing, I gravitate towards bold founders and GPs tackling huge markets with models I personally find interesting. My fund is focused on the future of work, and some of my angel investments align with that thesis. But I have also invested personally in new age sunscreen, rocketship materials, a circular shoe platform, an alternative medicine marketplace, next gen baby changing tables, and more. Over 90% of my dollars have gone to under-represented founders and funders because I believe these overlooked groups have a higher potential for breakout success.

After a few years of my own personal angel investing journey, I wanted to help others start investing. Accreditation rules and fees to get deal access are hurdles that limit access for many. We launched Vitalize Angels as a platform where literally everyone who is 18 years and older can invest in our angel deals. We have closed nine deals since launching our beta in July 2021, and we have 300 investing members. Our goal is to provide access and education for anyone looking for a low fee approach to angel investing, and both accredited and non-accredited investors are welcome to join. I personally invest in each of the deals that come through Vitalize Angels, as the deal flow has been phenomenal to date. Please reach out to @galeforceVC on twitter if you’d like to learn more about our angel community!

Oh, and remember my first angel deal from 2016 that didn’t make it? Once that founder launches another business, I will be first in line to write another check. It’s a long game, and ultimately the people we back are the most important factor!

-Gale Wilkinson (@galeforceVC)

My first exposure to the VC industry was in 2010. My father was invited to Minneapolis for an angel investment opportunity, and he decided to bring me as his translator. That was my first time hearing about the industry, and that experience left a profound impression on me.

I have decided to become an angel investor because:

1. The U.S. is the world’s technological and financial leader, and Venture Capital is the link that connects the two industries. It symbolizes advancement, innovation, and disruption, which are what drive humanity forward.
2. Everyone from the community, whether an entrepreneur, a GP, or a fellow investor, is an elite of our society with ambitious dreams and unique insights. I feel fortunate that I can exchange ideas and knowledge with all the greatest and most creative minds on the earth and learn from them.
3. Through angel investing, I have the opportunity to learn all the newest ideas and technologies in the world. This allows me to witness the spearhead of humanity’s advancements and stay ahead of society’s latest trends.
4. Although unable to develop technologies or medicines directly, I can contribute to meaningful changes to the world and people’s lives by investing in startups and entrepreneurs that have the ability to do so. I am happy and honored to be a part of the force that improves the world.
5. The startups’ ultimate success not only brings me financial gains but, most importantly, gives me a sense of self-fulfillment, accomplishment and improves my self-esteem. Every journey is memorable, and I share the joy with the entrepreneurs as they relish their achievements.

Thanks to continuous mentorship from friends and mentors, I am enjoying angel investing very much. I am fortunate to partake in this journey and I look forward to the voyage ahead.

-Sheng “Leo” Liu (LinkedIn)

The Early Light Syndicate is a community of early stage investors that has joined together to leverage the network effects of our experience, perspectives, and connections. If you’re interested in joining the Early Light Syndicate or learning more about angel investing, please fill out our application form here.