We attended the Perth Angels breakfast event Insights into Investing in High Growth Ventures on 21 June 2017. At the event the Perth Angels presented a panel of industry experts across the investment spectrum to discuss the quintessential angel investor question, “how do you pick winners in high growth early stage ventures?” We put out a call for free tickets to this event at the Techboard table and were overwhelmed with the level of interest, particularly from companies on Techboard wanting to know more about the investment ecosystem. Over the coming months Techboard will be bringing insights from a variety of different sorts of investors to its readers. If you have any suggestions as to issues you would like addressed OR if you would like to contribute a guest blog post please contact us.
The Panellists at the event who each came from a different part of the investment landscape were:
Mr Jordan Green an angel investor and President of Melbourne Angels,
Mr Andrew Larsen Investment Director Larsen Ventures (a family office) and
Mr Ashley Zimpel Executive Director, Australian Small Scale Offerings Board, Australia’s oldest Equity Crowd-Funding platform.
The Discussion was ably led by Greg Riebe, Chair of Perth Angels.
The panellists outlined the sorts of opportunities they look to invest in. Jordan Green indicated he like many angels, looked for companies that could be acquired by others and that he avoided companies that were intending to progress towards a public listings which he sees as a transition point rather than an exit opportunity as such. He explained that when evaluating an investment he looks for how much value the company seeking investment can create in the eyes of an acquiring company.
Andrew Larsen explained that a family office is just about taking a professional approach to managing your family’s wealth and how the scale of their individual investments is linked to the level of the family’s wealth.
“If your family has 200m it will not invest in early stage seed investment it will be looking at investments of 4-5m”.
Ashley Zimpel explained the quite scientific approach ASSOB took to selecting companies to list their opportunity on the platform and outlined:
“We operate in the area where companies have started to become special…. we look beyond the seed stage, we like to see proof of concept and founders with serious skin in the game. We like disruptive businesses”.
Talking about how his family office finds opportunities Andrew explained:
“I am super proactive… which is not the norm for family offices. I like getting involved and knowing the startups.”
Andrew also pointed out that many investors were very helpful and would introduce companies to other investors if it was something they were not interested in investing in.
Jordan Green pointed out that many angel investors don’t want to put their hand up as they will be inundated… they want to hide. He explained that companies seeking investment will hunt down the investors once they have their name, they will find out their email address and where they live.
Techboard’s own Peter van Bruchem asked the panel what needs to be done to increase the number of investors in early stage investment and deepen the pockets of existing investors in response the themes that came through from the panel included:
- Improving the innovation tax incentive.
- Reconsidering the investment caps for retail investors in the equity crowdfunding rules.
- Removing the inherent bias in the system that corporates have against buying from Australian startups.
- Activating self-managed super.
- Changing super fund mandates.
- Accessing funding sources like the Futures Fund.
- The importance of educating investors.
- Getting Financial planners involved.