Connect2Scale programme successfully finished its first edition of Angel Academy, aimed at empowering angel investors. We had 166 individual investors participating in 4 training sessions in March, connecting from more than 5 countries.
The academy, known for its commitment to fostering informed investment decisions and nurturing budding entrepreneurs, organized four comprehensive training sessions. These sessions delved into pivotal aspects of angel investing, equipping participants with essential knowledge and insights to navigate the dynamic world of startup investments.
Despite geographical barriers, the Connect2Scale Angel Academy attracted a diverse cohort of international participants, with representatives hailing from various countries. This international exchange of ideas and experiences enriched the learning environment, fostering a global perspective on angel investing.
Moreover, for the benefit of those unable to attend the sessions in real-time, recordings of each session are now available on the academy’s webpage. https://connect2scale.eu/resources/ This ensures that valuable insights and knowledge are accessible to a wider audience, fostering continuous learning and empowerment within the angel investing community.
Startups as an Asset Class – Navigating Risk Investment
Training I, hosted by EstBAN and guest Speaker Heidi Kakko
The first session provided participants with a holistic understanding of startups as an asset class, offering an overview of risk investment fundamentals. Attendees gained insights into the dos and don’ts for a business angel, alongside an exploration of global trends shaping the startup ecosystem. By examining the intricacies of risk investment, participants were empowered to make informed decisions and mitigate potential pitfalls.
Key Insights
- Startups operate under extreme uncertainty and require venture capital to support their growth. The role of business angels and early stage investors is crucial in providing the necessary resources and expertise.
- The initial sources of capital for startups include family, friends, and early adopters. These early adopters not only provide funding but also validate the market demand for the product or service.
- Venture capital investments come with high risks but also the potential for high returns. However, it’s important to choose the best companies and co-investors to increase the chances of success.
- Active involvement and support from venture capital investors can significantly impact the success of portfolio companies. Business angels should define their level of activeness and consider how they can contribute to the growth and development of the startups they invest in.
- While the venture capital industry offers the potential for high returns, it’s important to manage expectations as not all investments will yield positive results. The path to success is often filled with failures and challenges.
- The failure rates of startups are high, and achieving successful exits can be challenging. It’s important for investors to be aware of the low liquidity and long timeframes associated with early stage investments.
- Despite the risks and challenges, there is still hope for success in the venture capital industry. By understanding the landscape, choosing the right investments, and actively participating in the growth of portfolio companies, business angels can increase their chances of achieving positive outcomes.
Building Portfolio Strategies: Maximizing Deal Flow
Training II, hosted by FiBAN and guest speaker Ilkka Kaikuvuo
The second session focused on crafting effective portfolio-building strategies and optimizing deal flow, through a personal story of an experienced investor. Attendees explored diverse approaches to building a robust investment portfolio and learned how to identify the most promising investment opportunities. By understanding different investor archetypes, participants gained clarity on the type of investor they aspire to be, laying the foundation for strategic decision-making in their investment journey.
Key Insights
- The speaker’s investment journey started with their own company, highlighting the importance of being an entrepreneur before becoming an angel investor.
- Their investment strategy focuses on “something as a service” and smart offices, showcasing their preference for industries they understand and have experience in.
- The speaker considers geographic diversity in their portfolio, aiming to invest in companies that have a presence outside of their home country and Europe.
- Maintaining an active role in all portfolio companies can be challenging, especially when the number of investments is significant. The speaker acknowledges the need to prioritize and manage time effectively.
- The speaker’s enthusiasm for new ideas and their desire to be part of companies that have the potential to make a significant impact is a common trait among angel investors.
- The speaker’s investment journey has evolved over time, with a focus on learning from past investments and continuously refining their investment strategy.
- The success of the speaker’s portfolio is subjective, as some companies have thrived while others have faced challenges. It highlights the risks inherent in angel investing and the need to diversify investments.
How to evaluate a team with the basics of due diligence
Training III, hosted by Business angels of Slovenia and guest speaker Christopher Coomes
The third session delved into the critical process of evaluating startup teams and conducting due diligence. Participants learned the essential criteria for assessing the strength and potential of entrepreneurial teams, crucial for making informed investment decisions. Furthermore, the session provided insights into the basics of due diligence, equipping participants with the tools to assess investment opportunities rigorously.
Key Insights
- Founders need to embrace their passion and constantly push their company forward. They solve complex problems without realizing it.
- Good founders listen to everyone around them, ask for help, and understand their customers and team.
- Startups are resource-limited and need to make the most of what they have. Founders need to quickly make decisions and move forward.
- Trust and teamwork are crucial in startups. Founders need to build a team that shares the same vision and can navigate tough decisions together.
- Investors play a significant role in startups, providing guidance and support. They prioritize investing in good founders and becoming part of the team.
- Startups in different regions may have different paces of growth and funding availability, which impacts their speed and success.
- Founders with industry knowledge and experience have a higher chance of success as they can navigate the complexities of their product or service.
Legal Frameworks for Startup Investing: Termsheets and Agreements
Training IV, hosted by LitBAN and guest spekers Giedrė Čiuladienė & Valter Võhma
In the final session, participants gained a comprehensive understanding of the basic legal frameworks underpinning angel investments. The discussion encompassed legal documents relevant in startup investing, delved in specific legal terms and clauses.By navigating the intricacies of legal documentation, participants were equipped to engage in investment transactions with confidence and clarity.
Key insights
- Understanding the different perspectives of startups and investors when it comes to investment terms is crucial for successful negotiations.
- Venture capital investments in Europe have seen a decline in recent years, with angel investments being the most affected category.
- Valuation is a subjective process in startup investing, often based on trust in the founders and the potential of the business.
- Tag along and drag along clauses provide mechanisms for shareholders to sell their shares together, ensuring alignment among investors.
- Choosing the governing law and dispute resolution method in investment agreements can have significant implications for cost, speed, and confidentiality.
In conclusion, the Connect2Scale Angel Academy’s March training sessions have provided angel investors with invaluable insights and tools to navigate the intricacies of startup investments. By fostering a deeper understanding of risk investment, portfolio strategies, team evaluation, and legal frameworks, the academy empowers investors to make informed decisions and drive positive change in the startup ecosystem. With a commitment to knowledge sharing and collaboration, the academy continues to serve as a catalyst for innovation and entrepreneurship worldwide.
Connect2Scale Angel Academy continues its program this Autumn with advanced topics for Angels with more experience, with professional investors sharing their valuable expertise.
About Connect2Scale
Connect2Scale is a collaborative project initiated by a consortium of six countries to connect and educate investors on scaling up startups. Over a two-year period, the project aims to empower investors with the knowledge and resources needed to drive the growth of startups globally, fostering innovation and contributing to economic development.