I’ve had a few startups - some have gone well and some not so well. I now choose to be angel for three reasons - to learn, to give back and to invest.


1. It’s a front seat to the next generation of tech

Being an angel gives me a front row seat to some of the most interesting up and coming technology businesses in Australia. As a technology guy, I find it energising to work with entrepreneurs who are doing new things, bringing new products to market or changing the way things are done.

Angel investing is not really about the money for me, but more about the experience and the ability to learn. By working with these innovative companies I can keep learning about different areas of software that I can then apply back to my own business. For example, I've invested in a business called Biteable that creates videos. The founders have had a lot of experience in software at a mass global scale. I’ve learned a lot about how they think about marketing, product development and hiring remote workers that I can now apply to other businesses.

I find it energising to work with entrepreneurs who are doing new things, bringing new products to market or changing the way things are done.

2. It’s important to give back to the ecosystem

As a founder who has had a successful exit, I believe it’s my responsibility to give back to the entrepreneurial community. Being an angel allows me to do this. It gives me a seat at the table so I can help and guide a new business. I want to help them think about the potential of their market and the traction they could achieve.

It also allows them to leverage my experience and networks. I’ll often introduce founders of one startup to another because I think they're doing something that the other should be doing. It’s about helping everyone learn and grow.

3. It’s part of my portfolio approach to investing

Angel investing is a really interesting investment category - there's the potential for very high returns but you can also lose all your capital. I see it as part of my portfolio approach to investing.

In terms of my personal asset allocation, I target about 10% of my portfolio in to startups which feels right given the risk profile of the category. You don't want to invest 90% of your investable assets in startups - that's crazy.

I spread my risk across different stages - really early, seed and more mature startups. How much I invest in any particular startup may vary depending on how bullish I am on the founders, the product, the vision, and the traction that they've achieved.

While investing in early stage startups is high risk, it’s about more than just financial returns. They may be a result of the journey but are not an end unto itself. This is a space that’s immensely rewarding, but there’s also plenty of risks for people with the wrong motivations.

Danny Gorog is an Angel Investor.

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