107 Angel Investments to date. Time to pause for thought and share some insights.
Thank you for showing interest in my personal angel investing activity.
Earlier this month I wrote a brief synapsis that highlighted data on six of my 50+ angel investments that are valued over 9 figures. This generated some interesting conversation as well as requests to share some more detail. So here goes!
UKBAA platform gave me a chance to be heard (and hopefully help other investors and founders).
2019 was a busy year. After winning the UKBAA Angel Investor of the Year award I began writing my Angel Manifesto with the aim of helping Angel investors act more like value-add mentors. I had a number of opportunities last year to (hopefully) influence investors, not least, I had the chance to speak at the UKBAA annual dinner/awards about investing, mentoring, and neurodiversity. Apart from suffering from a case of ‘cotton mouth’ a few minutes into my speech (mental note: bring a glass of water next time), I really enjoyed the opportunity to share my views with such distinguished guests!
#Techstars4Life
In April I handed over my role as Managing Director of the Barclays Accelerator powered by Techstars. It was an appropriate time to move to the next challenge. During my five year tenure, we built a $1 billion valuation (portfolio companies) and were cited as the number one accelerator in Europe. We also assembled possibly the strongest pool of #fintech #mentors in the world which I am equally proud of. No sooner had I “left” Techstars that I was appointed Techstars ‘Managing Director Emeritus’, showing that, indeed, the Techstars network is for life!
Building bridges between the UK and the US
April also marked the end of the 30 ‘mini-internships’ I arranged between University of Michigan students and a few of my portfolio companies: Smart Pension, Simudyne, and Shieldpay. I’ve now spent half of my living years in the UK and the other half in the US so forging bonds feels right. With luck, as my (primarily UK Limited) companies grow and expand into the US and abroad, I can play some role connecting them to talented students from my alma mater. I’ve lined up another 30 students this year and portfolio company Everledger has joined the group! #GoBlue
Investing takes practice
2019 was also a VERY active year for investing in both new and follow on investments. Before I get into the details, here is a quick overview of my portfolio.
I made my first angel investment in 2014. Over the following 6 years I have made 107 investments, 57 of which were private and 50 which I led as Techstars MD.
Of the 57 private investments made, 53 are in fintech companies and 50 of the 53 fintech companies remain in business.
My 53 personal fintech investments have raised >£900m of capital. Six of them are now worth “over nine figures” although one of the six has recently been discussed in the press as being worth £1B+. #Unicorn
Diversity matters
Female CEO’s: Of the 107 investments, 16 were led by female CEOS (15%). These investments were not simply female ‘founding team’, but women CEO’s. If I used this wider definition of ‘founding team’, the % would be far higher. Still not great, but higher than the average in tech startups.
Ethnic minorities: Of my 107 investments, 21 were in BAME CEO’s (20%).
Social Diversity: I was the first in my family to attend a four year university at 18 and graduate so I have a soft spot in my heart for founders who have fought hard to “work their way up”, but I can’t honestly say that I’ve been keeping score. I’d like to do some more work on the best measurements for social mobility. Some ideas were: the highest level of education of a founders mother and/or father. Alternatively, the level of education of the founder and what percentage went to Oxford/Cambridge/Stanford/etc vs other levels of higher education vs no higher education. I’d welcome your thoughts on the best measurements. Of my six companies worth 9-figures, two founders have no higher education and only one has a degree beyond a Bachelors. None attended Oxbridge.
Neurodiversity: Many readers will know that a true passion of mine is #neurodiversity. I have a close relationship with many of the founders I’ve backed and I know many who have either been diagnosed or self-identify as neurodiverse, but at this moment I don’t feel comfortable sharing the metric other than to say, it is a large percentage. I passionately believe that teams that think differently are behind much of the innovation we have ever witnessed. I believe that companies that embrace neurodiversity will produce better outcomes for all stakeholders, not least, improve the well-being of the person who views the world differently!
Fintech is a broad vertical
The rest of my analysis focuses on my 53 private fintech investments. I’ve broken them down into different categories and presented the number of investments per category. In most cases I was an early investor and in many cases I was the first investor. I say this because it’s “easy” to back a winner that has already “won” (I could buy secondary shares in a company that is a “unicorn” for instance and put their logo against my name). I don’t do this. I back founders where the jury is still out, there is still loads of uncertainty, and that many VC’s would possibly “track” but not invest. I like to invest before the crowd catches on! This is one reason why Tariq Khan and I are starting Outrun Ventures.
1. Payments/lending: I made 11 investments here. Notable investments were in Shieldpay (now backed by VISA), Cledara (now backed by BBVA), and Crowdz (now backed by Barclays).
2. Neo-banks: I made 8 investments into banks/future neo-banks (e.g. some that are/will pursue a banking licence at some point). Notable investments were in Monese in 2016 (now backed by Paypal Ventures and Kinnevik AB), I was an angel investor into Railsbank (now backed by Moneta and Singapore Life), and an early investor into Atom Bank (now backed by BBVA).
3. Data Analytics: I made 7 investments here. A few worth mentioning are Simudyne (now backed by Barclays), Aire (now backed by Experian), and Seldon (backed by Amadeus and Global Brain).
4. “Picks and Shovels:” — I made 7 investments in b2b SAAS companies whose end customers are financial institutions that don’t fall into the rest of my buckets. For instance, I was the first investor in Cutover (now backed by Index) and InbotiQa.
5. Insurance-tech: — I met a number of excellent founders that disrupted insurance (6 investments), making the first investment into Everledger in 2015 (now backed by Tencent and Fidelity) and Cuvva in 2016 (now backed by RTP Global, Breega and Local Globe).
6. Wealth-tech: — I invested in 6 companies that were challenging the status quo in wealth. I made early investments into Smart Pension (now backed by JP Morgan), Sharegain, and Forward Lane.
7. Reg-tech: — An area that continues to be ripe for innovation is regulation technology. My early investment into Vienna-based Kompany stands out as does Munich-based, Alyne.
8. Capital markets: — I feel I have under-inveted in this area, as I found this vertical a bit more resistant to change. With that said, investments into Origin Markets (now backed by the Luxembourg Stock Exchange) and Treasury Spring (now backed by ETFS Capital) are performing really well in massive market segments.
9. Cyber security: — although cyber is not a classic fintech category, the companies I’ve backed see financial services as their primarly market so I’ve been attracted to great founders in this vertical. Both Barac and Post Quantum have unique solutions, defensible IP, and are solving some of the trickiest problems confronting banks.
What do I like in 2020?
My focus moving forward will be to invest via a GP/LP structure in Outrun Ventures. We already have a pipeline of incredible of founders that we’ve been speaking to for some time. As and when we complete an investment, we’ll share this to our LP’s first, then the wider universe. We’re excited by our track record to date and know we can do so much more for founders in the years to come!
Thanks for taking the time to read this! Happy investing.
