I love investing in seed round ventures. I get a real buzz from helping start entrepreneurs on their journey. Lots of angel investors work within syndicates but I really avoid syndicated investments unless I know or have worked with the other investors.
I really believe I can help craft the product proposition and market fit when I get involved in seed rounds, whereas later rounds require different skills (growing teams, financial management or operational for example), seed rounds tend to require nurturing.
Personally, I have invested in about 6-8 early stage ventures (typically one per year), most are an idea, a beginnings of a team and nothing else apart from a powerpoint with some assumptions. This area is not purely a financial investment by any means, it is the ability to be on the phone at anytime, answer emails, make introductions and help find team members while also crafting the product fit.
In product businesses, I usually get heavily involved in the product negotiations as this is an area I like too.
I avoid syndicates as they tend to need ideas that are further along, have had more risk pulled out of them and due to the requirements of the syndicate require larger amounts of capital to justify their fee structure.
I have made great returns by being willing to write small early stage cheques with the right team and opportunity. Unfortunately it isn’t an area that you can scale very easily so 1-2 investments per year is the absolute maximum!
And like most things it isn’t really the money that has any real leverage it just builds the budding entrepreneurs risk profile and makes them less risk averse knowing their is a financial safety net.Tweet