Angel investors provide backing to very early-stage businesses or business con¬cepts. However, the money is merely an ingredient of the entire investment package; the crucial element comes in providing the relevant knowledge and skill-set.
Aside from the obvious, a business can benefit from the breadth of experience and knowledge in management and business that the angel brings. They’ve learnt a lot of lessons along the way and they bring that with them. As a result, they can be critical resources in terms of expertise and industry contacts.
Exec Digital speaks to some of the most successful angel investors about their lucrative investments and plans for the future.
Scott W. Frazier
Scott W. Frazier is an active angel investor and a co-founder of Utah’s oldest, most prolific angel group, UtahAn¬gels. He was recently named the 2009 Utah Angel Investor of the Year at the first annual Angel Investor of the Year Awards.
Frazier’s early career was primarily in healthcare. “During the late 1980s a partner and I purchased a small healthcare company called Achievement Rehab, which provided contract rehab in nursing homes,” he explains. “We then built that company into a leading provider of contract therapy to nursing homes, with over 2,000 employees and $100 million in revenues before we sold the business in 1995. At that point I used the proceeds to become an angel investor.”
Since then, Frazier has built a portfolio of over 30 Utah companies, including Omniture, MyFamily, TruVision, Corda Technologies, Infopia, OBEO and Alianza. In recent years, he has also taken on a full-time role as CEO of one of his portfolio companies, THINK Subscription, a leading provider of subscription management software to publishers, online service providers and new media vendors.
With a background in healthcare, unsurprisingly, the majority of companies that Frazier has invested in have been in this industry, as well as internet and software businesses. “There are two reasons why I chose those industries; one, this particular area has a lot of companies in those industries and then those industries are growing and doing well,” he explains.
Permjot Valia
Permjot Valia is another prolific investor, having invested in 20 businesses in the last five years. He also currently sits on the board of the Enterprise Investment Scheme Association and is its representative on the board of the British Business Angels Association.
Valia started angel investing after having served as Sales and Marketing Director for Ernst & Young Entrepreneurial Services in London. “I got into investing by accident,” he explains. “I left Ernst & Young and I became a sales consultant for a company. While I was doing that I had the opportunity to make an angel investment in the business. At that time I didn’t really know what angel investing was and then I just invested in the business. The business did very, very well and I thought it was a good thing to do so I have been doing that ever since,” he explains.
Alongside his investments, Valia is also co-founder of a fund management business called Flight & Partners Ltd, which now has around $30 million under management. “There are four shareholders and all of us own 25 percent,” he says.
Last year, Valia also started his blog, www.businessangelblog.com, where he tries to pass on many of the lessons he has learned from his angel investing. “I found a lot of people I spoke to about angel investing talked about how good they were and their successes but they never spoke about the risk involved and the mistakes you could make,” he explains. “Therefore, I thought it would be really good to have a forum where people, be it entrepreneurs or angels, could share their mistakes.”
Daniel Mothersill
Daniel Mothersill is a serial entrepreneur and angel investor, keynote speaker, and lecturer with significant experience in a wide range of industries, from telecommunications to green technologies to IT. He is also the Founder and Chair of the Ciris Group of Companies and President and founding member of the National Angel Organisation.
In addition, Mothersill serves as an advisor to a number of technology companies, and specialises in organisational and positioning strategy, financing methodologies, communications, and investor relations for emerging and early-stage North American companies.
To date, he has invested in eight companies. According to Mothersill, some of the most interesting companies he has invested in have been service industry. “I have found that it has provided me with an opportunity, not just to provide capital but also to mentor these companies; in other words, setting up the right kind of infrastructure so they will succeed,” he explains. “This includes focusing in on such things as global marketing strategy, business development, and making sure there is the right financial and legal infrastructure.”
There are two areas in which Mothersill sees great potential – clean technologies and cross border co-investing.
“I think there is certainly potential in clean technologies; we are in the very early stages right across the board and there some very exciting developments in that area. In particular, there are a lot of interesting innovations taking place in wind, solar and water technologies.”
Mothersill is also focusing on cross border co-investing between angel investor groups. “We all face the same challenges and there is a real desire to get more involved in cross border co-investment,” he explains.
“In the last two years, the landscape for angel investing has become very flat and angel investor groups are looking at other angel investors – there are a lot of synergies.”
www.angelinvestor.ca
