Angel investing is not for the faint hearted. In my previous post in this series, I discussed the onset of the angel investing journey. In this, second, post I’ll take a look at ‘what happened next?’ across a series of my angel experiences. Truly, this is the Hindsight post.
What you’re hoping for, simply put, as an angel investor in a seed business, is that you’ve just backed the next Google/Facebook/Amazon/take your pick. You’re hoping your investment goes on to become a ‘Unicorn’, i.e. valued at above $1bn.
In the world of venture capital the professionals are generally looking for ’10x’ – i.e. making 10x their money – which often implies the business ends up, after taking on further rounds of investment, becoming a Unicorn.
One of my best ’10x’ investments is company T, shown below. OK, so it didn’t quite make me 10x (though see below). But it exited quickly – the key money back came in month 53, with a small (15%) amount retained for a further 12 months.
You’ll notice that I added to my initial investment in month 23. Whether to ‘top up’/’follow on’ your investments is one of the hardest decisions you have to take in investing, in my experience. In the case of company T, I’m glad I did – even though by so doing my multiple fell (i.e. my month 23 investment was at a higher price than my month 0 investment).
Company T was one of the best angel investments I know. But nonetheless, one of its investors was really p*ssed off when it exited. Why?Continue reading “Angel investing (2): what happens next”