Christian Jantzen, founder of Futuristic.vc, realized that the level of startup and founder friendliness was not so high in the angel investor community and the deals made were not sustainable. However, there was a new wave of funds and investors, such as Nordic Makers, taking on a new approach to founder friendly investing, so he hooked on and created Futuristic. He concluded that the community is looking for good [Nordic] content, so it is easy to reach out. Futuristic now has 10 companies in their portfolio, including 3 from Finland.
‘I want to differentiate myself from other angels’ – Rolf Garde, angel investor
Rolf Garde started as a business angel quite recently and took a very open approach to getting started. First he shared a status-post on LinkedIn ‘Who needs help and where can I add value’. This way he got the word out that he was staring as an angel investor. After this he launched a webpage and started writing blog posts that he could share with the community. The reasoning behind this is that he likes the startups to know who he is so that they can make some research before they approach him as an investor – this saves time for everyone and makes his personal deal flow better. As he has a strong background in consulting one of his first key messages was clear: sell, sell, sell! This way he wants startups to know that he wants them to have clear traction before approaching him.
‘As a big Network [DanBAN] you cannot do all things together – there should be a competition for the best deals and we should foster this competition’ Esben Gadsboll, angel investor
Christian pointed out the Silicon Valley distribution where 3 % of the startups provide 97 % of the returns; if you as an angel investor want in on these deals you need to be known. This is a long term game and it takes time to build your personal brand as an angel. If you really want to appeal to a company, you need to prove that you have something to offer – money is a commodity for good entrepreneurs – they need to see that the investor can offer more than just money!
”I am hunting unicorns and that is why I need to prove [to the good entrepreneurs] why I need to be included in the cap table” Christian Janzen, Futuristic VC
Rolf points out that as he invest primarily in syndicates, he needs to extend his personal branding also towards other angel investors. As an investors you should choose who you invest with. This of course goes for the whole ecosystem, so keeping a good relationship with VCs and early-stage funds.
‘Angel branding does not have to do with having a blog or website – It is the actual behaviour you have when you are out in the ecosystem […] there is a tremendous amount of karma in the startup ecosystem […] so my best advice is to be nice!’ – Christian Janzen, Futuristic.vc
There are of course many ways to reach out to the ecosystem and build your brand and every angel should choose the way that suits them best. Rolf has the blog as his main medium as he has realized he is not good on camera. Rolf also noted that when you write about your portfolio start-up, you help them creating a buzz. This will help you when raising money from VCs on the next rounds as they really look into what is discussed in the ecosystem. Christian has thought on a podcast to present the best founders and the best investors in the Nordics. Christian also emphasises having your boots on the ground. He is going to stay for a longer period of time in all Nordic capitals to get in debt into the ecosystem. Next stop is Helsinki, so FiBAN angels should take the chance to connect with Christian during the summer. If you as an angel have a hard time getting to be in different places you can also do this as a syndicate and make sure to cover more ground by sharing the most important events with your syndicate pals – make sure one of your trusted angel colleagues is present at all relevant Nordic ecosystem events and then share the know-how and connections.
‘I am trying to find the best deals in the Nordics‘ – Christian Janzen, Futuristic.vc
Rolf and Christian have rather different approaches to diversifying their portfolio. Rold has taken a local approach, he has started building his portfolio in Copenhagen and wants to know the scene there first and all Copenhagen entrepreneurs to know him. Christian and Futuristic on the other hand want to get in on the whole of the Nordics. He thinks that it is as easy to invest in Copenhagen as in Helsinki. Of course standardized documentation will help and he believes everyone will start using templates such as http://startupdocs.se/ and there will be more standardization of terms. Convertible notes or warrant agreements are on the rise. Cristian states that you look silly as an investor if you don’t want to invest with convertible notes. Still, many angel investors don’t get the benefit of convertible notes.
‘An investor needs to ask him/herself: do I want to be perceived as a dinosaur and do I want to spend that much money at lawyers’ – Christian Janzen on why angel investors should utilize convertible notes
So the key learnings according to Rolf Garde and Christian Janzen is to be open about that you are an angel investor and get the word out to the ecosystem. Angel investing should not be murky or secret activities, but open and transparent ecosystem collaboration. You don’t need a 100 companies contacting you, you need 10 companies of which 8 are interesting – let the founders find you! Of course, being out there is hard work, so you can share some of it with a trusted syndicate and network. However, not all the best deals are share with everyone, so your reputation will play a role in if you are contacted or not – openness and transparency is key!
All angel investors in this panel are part of the Danish Business Angels Network
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