I decided to get into Angel investing because I believe that the next best thing to being the founder of a successful business, is to be an investor in a successful business.
I’m not the sort of person who is likely to lock myself in a room and spend hours learning how to write code…it simply isn’t in my DNA. All my life I have enjoyed interactions with people, usually in the capacity of marketing or selling something. I enjoy developing partnerships and the thrill of closing a deal. I’m extremely jealous of smart, creative people, like designers and hackers who can work together to quickly launch a business earning revenues in a matter of days. For me, investing in startups has been an opportunity to work with these sort of people. It is something I enjoy, and I try to add more than just capital through my network, experience, time and passion.
When I started Angel investing a few years ago, I failed to consider the fact that I had no experience in early stage technology investment whatsoever. Oops. My first investments turned to dust, Angel dust.
So how did these expensive lessons change my approach to investing in startups?
Firstly, I now limit my investments to those businesses where I understand the market opportunity that exists. I agree with the views of Marc Andreessen (VC and founder of Netscape and Ning.com), “Market matters most; neither a stellar team nor fantastic product will redeem a bad market. Markets that don’t exist don’t care how smart you are.”
Secondly, I also prefer to invest in businesses where I can add value by taking a semi-active role. This doesn’t mean I necessarily need to join the board or participate in every decision. However, it does mean I can assist by making strategic connections, providing feedback on tech or marketing, and have a sense of how the company is progressing over time. This last point is really important to me, because at some stage I know that I will need to decide on whether I want to make a follow-on investment (or not).
For Elevation Capital, the sweet spot is about 8-10 active businesses in our portfolio at a time. We support them where we can, participate in follow-on rounds, help identify what’s working, understand that pivots are part of evolving business models, and help source growth capital when needed. We think this approach is a lot more realistic, and ultimately financially rewarding, than “spray and pray”.
In early 2011, I started working with the team at Pollenizer, firstly as an investor in their seed fund, and more recently as an Advisor and a member of Pollenizer’s Board. My time working at Pollenizer has taught me a couple of key things:
- Working on startups is really, really hard; and
- There is a real science to building successful startups.
Pollenizer’s experience over the past 4 years has enabled them to develop their own unique approach to venture creation. They learn from their failures, celebrate their wins and keep striving to create truly innovative products. This is what Phil Morle often refers to as “awesomeness”. It is really great to be part of the energy and innovation that happens every day in their office, “The Hive”. It is what they call “Startup Science”. It is their own take on Lean Startup methodology, which in recent years has been promoted globally by Silicon Valley startup gurus Eric Ries, Steve Blank and Dave McClure.
Whether you’re a large public company that needs to grow market share through innovation, a startup looking for a different approach, or even an Angel investor like me, Pollenizer’s proven methodologies deliver speed, reliability, and predictability, even in an uncertain environment.
Pollenizer is now teaching this science through the Pollenizer Academy, their version of a university for entrepreneurs, startups, corporate employees and investors who wish to develop lean startup skills and learn from Pollenizer’s tools, processes and people. These skills are imperative if you want to develop innovative products or de-risk the very fragile first months of your new venture.
Whether you have a current web project that could use some extra help, or you are trying to develop the next “killer” app, the Pollenizer team will help you make sure that your startup compass is pointed in the right direction. I encourage you to join the Pollenizer Academy and start learning the art of “Startup Science”.