Everyone Has A Different Path To Angel Investing
Last week, we had our first private event for Vol. 1 Ventures, focused on operator-investors who have split time between building companies and angel investing on the side.
We were lucky to have some amazing panelists, and the event was moderated by my wife Stevie Kar (who’s a prolific angel investor herself but hates talking about herself…maybe one day):
- Michael Manne, ex-CRO of Ocrolus
- Chrissi Sanders, operating partner @ Vol. 1 Ventures, cofounder of Equity CMG (a mortgage lender) and a former NBA sports agent
- Ryan Sandler, cofounder & CEO of Truework & scout for Sequoia
- Ian Kar (me), founder of Fintech Today & managing partner at Vol. 1 Ventures
To me, there was one key theme that resonated throughout the panel and everyone’s answers: everyone has different paths to becoming an angel investor, with different goals and motivations. And angel investing is *vastly different* than running a fund (something I’ve learned throughout the last few months lol)
Michael’s path might be the one that most readers will want to follow: he was the SVP of Sales at Namely, helping the company grow from $200k ARR to $60m with over 500 folks. He got started on his angel investing journey pretty early compared to most and has a bunch of great companies in his portfolio (including Truework.) But his main incentive is to be helpful and a sounding board for founders and entrepreneurs he is excited by and wants to help get off the ground; financial returns are great, but his first goal is to be supportive and helpful to people in his ecosystem.
Ryan’s seat is a bit more unique than anyone else’s on the panel: he’s not only an operator-investor but has raised from them as well. So he not only has a perspective on how to get into angel investing, but a founder’s perspective on what kind of operators you want to be raising from too. Ryan said that he uses operators on his cap table for intros to VC’s and recruiting, but also as a sounding board to talk about either highly tactical topics related to Truework, usually around the operator’s expertise. As an investor, it’s hard to balance the time and provide a ton of help as a founder, but one easy way to add value is introing founders to investors on his cap table. I can attest that Ryan’s really good at this as he’s helped me and other founders I know meet people. He also has some dope tricks on actually getting people to convert on intros and generating buzz around his companies prior to raising, but that was for attendees only 🙂
Chrissi had probably the most untraditional path around getting into angel investing—by initially starting out by negotiating equity deals for her athletes. For decades, professional athletes have had their likeness used to market products but were never really given equity in exchange for their help. Nowadays, that’s shifting quickly—especially with athletes and celebrities raising venture funds too. Chrissi also shared a lot about mentorship she’s gotten from folks and how that can make a big difference as a black female investor—namely starting out from an equal playing field rather than being a charity case.
Lastly, as for me, I talked mainly about my experience angel investing by starting a syndicate. For folks who have a great network and a good relationship with founders, syndicates are a great vehicle to explore—as long as you aren’t being shady about fees, as Michael noted. I learned a lot about investing through starting a syndicate—both on securing allocation but also on the LP side as well. I talked a little bit about the balance as well on gathering together LP’s into a syndicate when founders are particularly sensitive about who’s on their cap table.
Overall, we’ve all had different experiences—and none of them are similar to running a fund. Michael made some great points about this, but the fact is raising money from LP’s turns investing into a really serious job where you need to return capital to your backers. That changes the dynamics a ton, and part of it is knowing that founders are more comfortable talking to angels versus full time investors. For some of us, like myself, getting into “professional investing” is a natural part of my career trajectory. For others, like Michael, who are more seasoned executives that love operating, investing will always be a fun side hustle. But in all cases, I think one major similarity is that as operators and founders, we understand how hard it is to build companies, which Chrissi pointed out. Sometimes just listening and being there for founders is a huge value add in and of itself.