Interview #1 in the BADideas.fund series BAD to better
- 💡Find a Thesis and Stay True to It
- It Really is that Important
- What is a Good Thesis
- Staying True to it
- 💡Look for Teams with Unique Advantages
- Why That Matters
- What to Look for
- 💡Build a Network to Create Dealflow
- 💡Take a Long-Term View
- 💡Be Consistent
- Full interview:
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Hi, investor! 👋 If it seems tough to navigate angel investing, I feel you - there is a lot to wrap your head around, especially at the beginning. Part of our ethos over here at BADideas.fund is to go beyond writing checks to game-changing startups by building a true community centered around the idea of meaningfully supporting our portfolio companies as they tackle growth challenges, as well as collectively getting better as investors.
For many of us - myself included - BADideas.fund is the first proper experience with angel investing, and now that we’re coming up to our first anniversary, I reflect on the buzz around figuring out the basics of how to think about capital allocation, dealflow creation and investment decision mare more broadly. Thankfully, we have a few experienced investors in our community, and picking their brain has been invaluable. One of them is Ben Leblois, a 3x founder with 1 successful exit and over 35 investments. He’s among our longest-standing investors and a core part of the investment committee, so I was stoked when he agreed to do a podcast interview and share his top tips with those who may be just starting out:
💡Find a Thesis and Stay True to It
It Really is that Important
Ben emphasizes the importance of having a thesis - a set of criteria that guides an investor's decisions - when it comes to angel investing. It helps maintain focus on specific areas and filter out potential investments that don't fit the strategy. Without a thesis, investors can get lost in the sea of opportunities and end up making impulsive or unwise investments.
What is a Good Thesis
A good thesis should be specific, realistic, and grounded in the investor's strengths and interests. It should also be flexible enough to adapt to changes in the market and the investor's circumstances. For example, Ben's thesis is focused on backing teams with unique advantages in emerging markets.
Staying True to it
Once an investor has established their thesis, it's important to keep the discipline and stay true to it. This means turning down opportunities that don't fit the criteria and resisting the urge to chase trends. Easier said than done - It can be tempting to invest in the latest hot startup or follow the crowd, but that's not always the best approach.
💡Look for Teams with Unique Advantages
Why That Matters
Ben believes that investing in teams with unique advantages is crucial for success in angel investing. Unique advantages can take many forms, such as domain expertise, network, startup building superpowers, to name a few. These advantages make it harder for competitors to replicate the startup's success.
From a macro perspective, the CEE makes an attractive investment case thanks to talented founders that can build stellar teams at a fraction of cost of what they’d need in London, NY or Silicon Valley. On an individual level, identifying great founders and focusing on the long-term potential of their ideas is key, be it looking at the product-market fit, the total market size or competitive space.
What to Look for
A team should have solid domain expertise related to the problem in the space they are solving. Also, look for teams that have already achieved some early traction - even if they’ve only built a minimum viable product or have a small customer base. This helps reduce risk and provides evidence that the team is capable of executing on sound ideas. It's also crucial to assess the team's ability to handle challenges and pivot when necessary. As Ben notes, "things always go wrong in startups," and it's the team's ability to adapt that often determines their success.
💡Build a Network to Create Dealflow
Another important aspect of successful angel investing is getting access to high quality dealflow. For investors just starting out this is a crucial obstacle, as one typically does not have neither the network nor the brand to be able to access quality dealflow.
Being part of an investor community provides not just access to dealflow but the collective brainpower behind it as you learn as much from your co-investors as you do from your own investments. Building relationships with other investors and entrepreneurs is key as that can lead to future investment opportunities.
💡Take a Long-Term View
Ben advises taking a long-term view when it comes to angel investing. This means not focusing solely on short-term gains, but rather building a track record over time. Angel investing is a marathon, not a sprint, and it takes time to build a solid portfolio of investments and see the first liquidity event.
Consistency is key when it comes to angel investing. Ben recommends being consistent with check sizes, investing in startups that fit your thesis, and staying true to your long-term goals. By being consistent, you can build a portfolio that reflects your investment strategy and helps you achieve your financial goals.
This was among the best goodness-packed conversations I’ve had this year. Thanks for sharing, Ben!
Angel investing refers to investing in startups at their early stages in exchange for equity in the company.
Angel investing can provide opportunities to support innovative startups, potentially earn high returns, and diversify your investment portfolio.
Angel investing is a high returns, high risks asset class. Even though you’d want to make a large number of (even small) investments to diversify away the risk of particular startups failing, it's important to also do sufficient due diligence on each investment opportunity before deciding to invest.
A thesis is a set of criteria that an angel investor uses to evaluate potential investment opportunities. It helps investors focus on companies that fit their investment strategy and goals.
Building relationships with other investors and entrepreneurs can lead to future investment opportunities as well as learn from their investing experience.
Since launching at TechChill '22, BADideas.fund has invested over €1M in 12 startups, and our global member pool keeps growing, spanning 150+ members from 16 countries and counting. We are an early stage angel syndicate, providing €50K-€200K funding for CEE startups, led by helpful founders & operators.
Among members/investors - founders and operators, who’ve been building such companies as Vimeo ($450M funding), Printify ($54M), Pandadoc ($51M), Pipedrive ($90M), Bolt ($1.3B funding), Apollo ($151M), Bird ($783M funding), Shopify ($122M), Whimsical ($30M), Lokalise ($56M), Deel ($679M), Printful ($130M), Twilio ($614M), Veriff ($192.3M), Wise ($1.3B raised), Interactio ($30M raised), Vinted ($562.3M), NordVPN ($100M), Hubspot ($100.5M).
We are looking for the most promising startups in the CEE region. If you're a founder and see a fit with BADideas.fund, don't hesitate to apply. If you have a startup in mind for BADideas.fund, we encourage you to refer them (and share the upside).
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