What are business angels and how do they invest?

We have already organized two 2Be Angel meetings in June and October 2021. Petr Skrla and Martin F. Herrmann were willing to share their ideas and thoughts with us. In this news article we present you some selected ideas that were shared. If you are looking for full experience, you should watch both recorded meetings on our website https://dex-ic.com/ce-connector_en.

You should also follow us on https://www.linkedin.com/company/dex-innovation-centre-dex-ic to be part of our future events.

How to Become a Business Angel by Petr Skrla

• You need to have money, patience, take liking in helping people and many other things
• Out of 10 investments, only one will be a home run, 3 will return 1x-5x and the others will not profit/fail and return nothing, from these statistics we can say that if you intend on making only 2-3 investments you will probably lose your money, so portfolio planning is crucial
• To make one quality investment plan takes at least 160 hours
• Being a Business Angel is kind of like being a parent, you need to be there for them, but also need to give them free will
• If you do not have enough money to “fly solo” as an Angel Investor, consider joining a club of smaller investor

How to Become a Business Angel by Martin F. Herrmann

• As a Business Angel, you do not only offer money, but you are also mainly offering you expertise, contacts, and knowledge either in the field or in developing a working and a successful company.
• Take the time to analyze your possibilities and different types of participation structures (convertible, SAFE, direct stake) as well as very important protection clauses you might have to use. (tag-along, drag-along, liquidation preference)
• Other than searching for companies to invest in, do not be afraid to communicate that you are active as a Business Angel, they can also come to you, if they are interested in your experience.
• Diversify your portfolio, it is not a good idea to put all your money into one company, yes, you might win, but you might also lose. Spray ‘n Pray!
• Preparing yourself for maybe a total loss of your funds is always a good idea, be it mentally or financially, better be prepared and not need it, than to not be prepared and get affected by the downfall a lot more.

The 2BeAngel meeting is brought to you by the CE-Connector initiative that brings together a group of private business angel investors with public fund support to co-invest in start-ups.