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At Invest in Moonicorns, we had the pleasure of having Miruna Girtu as the first keynote speaker of the day. Among many valuable pieces of information, she also shared six lessons for angel investors.
Miruna Girtu is an investor, strategist, and operator on a mission to power innovation and increase access to capital, information, and partnerships, in her multiple roles as Venture Partner at SyndicateRoom and tutor at Oxford University’s Saïd Business School. On the investment side, she works with Heritage Holdings, a family-backed investment platform.
She’s been working alongside top angel investors to find, co-invest in, and further support the next generation of bold founders. Miruna is also an active ecosystem supporter, advising and collaborating with universities, accelerators, government programs, and other organizations.
Without further ado, let’s dive straight into the lessons she derived from working with and interviewing 100+ of the most experienced business angels!
Lesson 1: It’s more about assessing the people than it is about their initial ideas
Miruna mentioned that the biggest challenge for angel investors is building a mental model that they can use to identify great founders. She believes that there is no one winning founder profile but that there are certain traits that are common among successful entrepreneurs.
These traits include:
- Passion and drive: Great founders are passionate about their businesses and have a strong drive to succeed.
- Intelligence and problem-solving skills: Great founders are intelligent and have the ability to solve complex problems.
- Resilience and perseverance: Great founders persevere in the face of setbacks.
- Leadership skills: Great founders can build and lead teams.
She advises angel investors to pay attention to red flags when evaluating founders. These red flags include factual lies, unrealistic expectations, and a lack of self-awareness.
Lesson 2: Be careful not to invest too much too fast
When starting as an angel investor, it's important to be patient and not invest too much too fast.
Miruna believes that it is important for angel investors to pace themselves, especially when they are first starting. She recommends investing small amounts of money per company and gradually increasing your investment size as you gain more experience.
There are a few reasons why it is important to start small.
First, it allows you as an angel investor to learn about the startup ecosystem and to identify the types of companies that you are interested in investing in.
Second, it allows you to build a diversified portfolio, which is important for reducing risk. Third, it will enable you to develop relationships with founders, which can be valuable in the long run.
Lesson 3: Portfolio building matters more than you might think
One of the most important things to consider as an angel investor is how you construct your portfolio. A diversified portfolio will help to reduce risk and increase your chances of success.
When constructing your portfolio, you should consider the following factors:
- Diversification: Invest in a variety of different companies and sectors. It will help to reduce your risk if one or more of your investments fail.
- Follow-on: Decide how and when you will invest in your portfolio companies in subsequent funding rounds.
- Time horizon: Think about how long you're willing to wait for a return on your investment. Angel investing is a long-term game, so it's important to be patient.
Lesson 4: Have realistic expectations around the timing and nature of exits
Exits are not guaranteed.
The majority of startups fail, and this means that you should invest capital you can afford to lose and be prepared to wait a long time for a return on your investment.
If you're looking for quick returns, angel investing is not the right asset class for you. However, if you're willing to take on risk and wait for the long term, angel investing can be a very rewarding experience.
Lesson 5: Have the courage to use your knowledge and convictions
As an angel investor, you can access a wealth of knowledge and experience. Use this to your advantage when assessing investment opportunities. Don't be afraid to go against the grain and invest in companies that others may not be seeing.
Some of the best angel investments are made in companies overlooked by the mainstream investment community. If you dare to use your knowledge and convictions, you can identify hidden gems before they become obvious to others.
Lesson 6: Clarify your value proposition to founders
Why should founders want to take your money? What value can you add to their businesses?
Once you have a clear understanding of your value proposition, you can start to communicate it to founders. It will help you to attract the best founders and build a strong portfolio of investments.
Here are some ways to add value to founders:
- Provide mentorship and guidance: Share your knowledge and experience with founders. Help them to navigate the startup journey and avoid common pitfalls.
- Help them to build their networks: Connect founders with other entrepreneurs, investors, and potential customers.
- Support them in fundraising: Help founders to raise the capital they need to grow their businesses.
By following these lessons, you can increase your chances of success as an angel investor. Remember, angel investing is a long-term game, so be patient and persistent.
Keep an eye on our blog, and stay tuned for more insights and lessons learned at our Invest in Moonicorns conference.
