Investment

My target investment metrics:

• Make between 2 - 4 investments per year
• Investments range between $10,000 and $50,000
• Ideal portfolio size is between 25 - 50 companies
• Time investment of <1 day per month up to 1 day per week

I can invest any of the following:

• Effort (time + skill + knowledge) (returns Fees)
• Debt (opportunity cost of cash) (returns Yield)
• Equity (risk) (returns Capital Growth)

Returns

My target returns for equity investments are:

• <50% of investments provide negative return
• >40% of investments return 1-5x capital invested
• ~6% to return between 5-10x
• ~3% to return 10-20x
• ~1% to return >20x

Overall portfolio returns of 4-10x invested capital over a <10 year time-frame.

I am happy for investments to return a Cash Yield (dividends) rather than exclusively Capital Growth (sale).

Investment Process

This is the Pipeline Management process I go through to find my 2 - 4 investments per year.

1. Deal Flow 
Most of my opportunities come from:

• Angel Networks such as Melbourne Angels
• Personal Connections
• LinkedIn
• Mentoring
• Meeting founders at Startup Events, Pitch Nights, Speakers/Seminars, University Events or other Networking and Community Events

If you find me in any of these forums, I welcome you to approach and introduce yourself and your business.

2. Filtering for Fit
​To find 2-4 good deals I would normally expect to review around 1000 opportunities. That's 5 per day! Not realistic given my time allocation to Angel Investment. 

I do attempt to look through at least 8-10 pitch decks each week that come direct from my Deal Flow sources.

For the remainder, I rely on networks such as Melbourne Angels, Scale Investors and others who can do preliminary filtering for me.

​​3. Coffee Meeting
If the idea passes , this is a 30-45 minute chat to get to know each other. 

4. Deep Dive
Let's get into the details. Business plans, numbers, numbers and some more numbers. Let's get to know each other a bit better. This deep dive may take 2-4 weeks and take multiple meetings.

5. Terms and valuations
This has to remain pretty straightforward, we don't want to muddy the water for potential future investors. We need to ensure founders aren't diluted too much if they go down a VC path, and we need to ensure our stake can return sufficient value if things go according to plan. Angel Investors should never be looking for more than 20% equity, more than that and you're a co-founder! Unless we are investing in a Seed Round as part of a syndicate we'll usually be seeking between 5% - 15% equity

​6. Due Diligence and Reference checks
​If a deal never falls over during DD then I'm not doing DD correctly! Hopefully it's rare, but this is where we check up on everything that's been shown to us, and find all those things which haven't been shown to us! 

Personal Choice

Every investor makes personal choices which do not reflect the Commercial Opportunity. Different products or industries appeal to different investors.

I am industry agnostic, already involved in a diverse range of industry verticals. However, no matter the financial return, there are some products in which I choose not to invest...

• Is it Unhealthy? Alcohol, sugary drinks for kids, YouTube...
• More "stuff" we don't need; rewards platforms, instagram fame...
• Environmentally unfriendly; coal, plastics, animal testing...
• Companies thriving on customer pain; gambling, payday loans, BNPL...

I think you get the idea. :)

When my kids as me what I do, I have always replied "I help people". So if your business will help People and help our Planet, then I'm interested.

You can read about the Triple Bottom Line.

Always a work in progress

The purpose of this is to:

• Maintain Focus
• Develop a Systematic Process
• Deliver Consistent ​Execution

It is critical to understand if I am making good decisions? This means I need to have a process for making decisions, defined metrics for success and be able to review and critically evaluate my own thinking process and decision making capabilities.

Understand that sometimes you can make the wrong move for the right reason - or the right move for the wrong reason. 

Assessing Opportunities

Here are the 6 broad categories that I consider when investigating an opportunity.

A Superstar Team
​Founders who are:
- Willing to learn, flexible
- Express gratitude
- Capable and able to deliver (action oriented)
​- Tenacious, resilient
- ​Vision, passion and skills
Demonstrates CLARITY of thought.

The Product / Technology

Is this a Product or a Business? Is it solving a problem or is it a Solution (ie. a nail, looking for a hammer)

Is it a problem for real customers?

Global Trends - why NOW?

Total Addressable Market
Size of the opportunity. Does this solve a problem, who's problem and how much do they care? How many customers are there?

Traction / Progress So Far
In my case this is quite often "none"... but I do need to see some evidence of the fact that the founders can Take Action and actually Deliver something.

Terms and Valuation

Operational Support

Each individual should be working on the one thing at which they are absolutely the best in the world.

Founders are the best people in the world to be working on:

1. Product & Vision
2. Early or Key Sales
3. Building team culture

It is not efficient for founders to be spending time on mundane operational activities such as accounting, graphic design, legal, admin, customer service etc. Keeping founders mentally healthy, motivated, happy and excited is a critical part of my role. I find that removing the burden of managing the business is a massive part in maintaining happy founders.

Our portfolio companies receive access to our Group Support team to assist with Operational requirements. This Group Support team provides shared services in:

• Accounts, regulatory and compliance
• Graphic Design
• Operational IT (phones, websites, business systems etc)
• Human Resources 
• Legal

This allows founders to focus on what they do best and grow the business!