Becoming an Angel Investor
My wife and I chose beautiful Coastal Georgia as the place to call home almost 20 years ago. We were moving from London, and while we recognized how wonderfully friendly most people are in this part of the world, we initially had no family, friends or business contacts in Greater Savannah … just a desire to meet people, get involved in the community, and establish some roots.
Today, those roots run deep. My wife’s business is well-established; we sit on several nonprofit boards; much of our family followed our decision to move to Coastal Georgia, and our grandkids were born here. As for me, early on I got involved in something that has become a hobby, an investment opportunity, and a great way to meet other entrepreneurs and businesspeople. I joined Ariel Savannah Angel Partners (ASAP) and became an angel investor.
What is angel investing? In short, angel investors (usually called just “angels”) offer funding to promising startup companies in exchange for some early equity in the business. Angels usually get involved with young companies after they raise their initial capital, which is usually called a “friends and family” funding round, but before big institutional investors invest. Angels step in at a critical time when the company needs more funds to prove out its concept which, in turn, will hopefully generate interest in much bigger investments from venture capital groups.
In the U.S., angels are estimated to invest a whopping $25 billon every year. But in addition to this important funding, many angel groups – including ASAP – offer coaching, mentoring, contacts and general business knowledge and advice to these budding young entrepreneurs, who are usually brilliant in their own fields but sometimes lack the experience that their angel investors can bring.
Angel investing is high-risk, and some of these early-stage businesses will of course go bust. On the other hand, some go on to realize huge returns for their early investors, and every big household-name technology company you can point to started out with some early angel investors to get them off the ground. Angels who band together in groups like ASAP reduce their risk by pooling their funds, as well as putting in place processes that aim to weed out all but the best of these young businesses. While we at ASAP have admittedly had a few “dogs” that performed poorly over the years, we have also had several big wins including one “lab on a chip” technology business that returned about eight times our initial investment, and another medtech company that returned even more.
ASAP has become one of the biggest angel investment groups in the Southeastern USA, and currently has investments in 35 companies. While we tend to focus mostly on technology businesses, the range is wide and interesting. Our portfolio includes companies that are developing high-tech medical devices, new surgical procedures, genetic engineering solutions, advanced breastfeeding technologies, agricultural technologies, the use of artificial intelligence in skin care and cancer detection, a high-end bourbon distillery, a manufacturer of ancient-grain-based vegan buttermilk products that just launched into Whole Foods, and much more. You can see our entire portfolio and learn more about our group at www.asap-invests.com
Why do our members join an angel group? Some are involved because it gives them a chance to invest relatively modest amounts in young, privately held businesses and they seek some investment diversification outside of the public stock markets. Other members enjoy the “business camaraderie” that comes with attending the meetings or working with other members on screening or due diligence teams. Yet others enjoy the exposure to some of the brightest and smartest entrepreneurs in the world, who are running businesses like those described above, and hearing the “investment pitches” about some really mind-blowing new technologies that these smart young people aim to develop. As for me, I joined ASAP for all of these reasons, and it has been a great and rewarding journey.
All angel groups are different, but in ASAP, our members make their own investment decisions, and there is never an obligation to invest. Our group is member-owned and does not aim to make a profit from member activities or investments. ASAP is managed by a member-elected board, of which I am honored to say that I have been elected to chair in 2022. We are a proud member of the Angel Capital Association, the largest angel professional development organization in the world, comprised of over 14,000 angels and 250 angel groups.
Angel investing is not for everyone, but it certainly has an important place in many portfolios, as well as an important role in the development of game-changing new technologies. It can also, in my view, be great fun. If you are interested in joining our group or finding out more, please reach out to me at firstname.lastname@example.org.