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In our latest Meet the Investor interview, we meet Cristina Bullon Gomez, a seasoned investor with a passion for nurturing and advising startups. She discusses the symbiotic relationship between investors and startups that fuels economic growth, the red flags she watches out for when investing in startups and how startups should tackle fundraising today. Plus her thoughts on why we need societal change to truly democratise the startup ecosystem.

Why did you become an angel investor?

After many years working alongside startups, I recognize the vital role of capital investments. This not only benefits investors in achieving ROI but is equally crucial for startups to foster growth and expansion. This symbiotic relationship is fundamental to any economy, providing markets with new and reliable ideas.

What are the key benefits of being an angel investor?

Being an angel investor allows me to actively engage with startups; I serve as an advisor to many of the startups I’ve invested in.

What are the most exciting sectors gaining your interest at the moment? 

Sustainability and technology.

What do you think are the benefits to startups of angel investment, versus other forms of funding?

Angel investors represent the first line that can make or break startups. We bear the responsibility to meticulously analyse, invest, and drive the right solutions and ideas, making us essential to the ecosystem.

What red flags do you look out for when researching startups?

I scrutinize the founders’ ability to be agile, handle criticism, and stay composed during challenging times. Additionally, alignment of expectations among founders and a startup’s scalability are crucial factors.

We are in a very different investment climate. How should startups approach fundraising today that is different from previous years?

Startups must be aware of increased interest rates leading to a decrease in risk appetite. Understanding macroeconomic trends and targeting the right investors based on company fit is essential. Researching the investment landscape and focusing on initial traction and strategy are key components for success.

What are the common traits of the successful startups you have supported?

Successful startups exhibit traits such as focus, patience, determination, and agility to pivot based on real market behavior. They understand the importance of timing, partnerships, and assembling the right team. Efficient corporate structures and processes, though tedious, are crucial for long-term success.

If you could offer just one piece of advice to a young startup, what would it be?

Follow your gut and learn to say no. Trust your instincts amid the multitude of opinions in the investment industry. Focus on calculated risks, avoid spreading too thin, and prioritize tasks at different stages of your startup journey.

Founding teams and indeed investors still have a very low representation of women or indeed ethnic diversity. How can this be improved to ensure we truly democratise the ecosystem?

Addressing this issue requires a deeper societal change. We need to restructure social and economic perceptions of women, allowing them more freedom of choice without structural consequences. Early financial literacy and education are essential to encourage women to take informed risks and participate in a broader range of opportunities.

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In our latest “Meet The Investor” interview, we speak with Ben Legg, an angel investor and startup founder driven by a passion for promising founders and innovative ideas. Ben believes in the long-term benefits of angel investing, from gaining insights into fresh ideas to building wealth for retirement and the “warm, fuzzy feeling” of truly making a difference.

He shares his views on the exciting sectors gaining his interest, offers valuable advice for startups raising in the present climate, and explains why the mentoring power of angel investors is a formidable quality that shouldn’t be overlooked.

Why did you become an angel investor?

I have been mentoring founders for 15+ years. Now and again I would be mentoring a really promising one, and after a few months would think ‘I really believe in this founder, team and business’, so six years ago I started to invest in 1-2 companies per year.  

What are the key benefits of being an angel investor?

Being an angel investor gives me three benefits:

1. Insight. It’s really interesting to be exposed to so many fresh ideas
2. Pension. This is my way of building long-term wealth for my retirement.
3. Warm, fuzzy feeling. It just feels good to help entrepreneurs who want to make the world a better place. 

What are the most exciting sectors gaining your interest at the moment?

Firstly, I am always focused on the future of work, plus related areas (e.g. adult education). That is where I am building my own startup – The Portfolio Collective, which helps professionals understand, launch, manage and grow successful portfolio careers.

Secondly, as a former army officer seeing the world become so much more dangerous, I feel compelled to support startups in defence and security technology. Part of my portfolio career involves working with GALLOS Technologies, in which we both invest in and build companies focused on improving our security with new technologies. 

Thirdly, I find any startup that builds more interactivity interesting. Another hat I wear is heading Europe for GFR Fund, a Silicon Valley VC focused on gaming, AR, VR, the metaverse and any consumer technology that is deeply interactive. 

What do you think are the benefits to startups of angel investment, versus other forms of funding?

As the CEO and cofounder of The Portfolio Collective, I have raised £1.3m from 200+ angel investors in our community. These investors believe deeply in our team and mission, which itself is very rewarding.

On top of that, they are all community members, power users and major referrers of new members, ensuring that we always have a steady stream of new members and feedback on what we are doing well, and where we need to improve things.

What red flags do you look out for when researching startups? 

The reality is that when I invest, I am investing in the founders more than the strategy, as the strategy will likely change. I look for the following in founders:

• Integrity – one whiff of dishonesty – or flakiness – and I’m out.
• Insight – fresh insights on their industry that others haven’t developed (or can’t act on) plus deep curiousity and the ability to ‘outthink’ competitors over a sustained period of time.
• Rigour – proven passion for, and ability to, build new things – products, teams, services etc. They need to be able to turn slides into real world momentum. 
• EQ – deep self awareness, listening skills and proven ability to assemble and work with a team with diverse skills and personalities. 
• Cofounder Teamwork – do the cofounders work well with each other? Do they have different, but complementary, skills? Do they support AND challenge each other?
• Resilience – a proven work ethic and ability to overcome adversity. No ‘lifestyle founders’ for me.

We are in a very different investment climate. How should startups approach fundraising in the present climate that is different from previous years?

VCs have a lot less money to deploy now, and every investor of every type now expects a faster route to profitability. So no-one should plan on an easy raise with a pitch that doesn’t have a tangible plan to get to profitability fast.

For most startups at the moment, revenue, grants, angels and family offices are a better place to look than VCs, so focus more time there. And make sure you have proof points regarding market size, pricing, cost levels and customer likelihood to pay. 

What is the most common mistake startups make in their fundraising journey?

The most common is starting too late – it always takes longer than expected. The second is raising in rounds. The most successful raising I am seeing at the moment is ‘always on’ raising, typically via an ASA (UK) or SAFE (US). That way you don’t need to hit a fundraising target, but can raise as you gain traction.

If you could offer just one piece of advice to a young startup, what would it be?

Find 3-5 great mentors or advisors, with complementary skills,  and tie them in early. Give them about 5% of the company between them – either in stock options, or if early enough include them in the founders agreement (with clawbacks in case it doesn’t work out). These people will support you, challenge you and help you with fundraising, partnerships, talent acquisition and much more.

Are you positive or negative about the UK retaining its place as a key startup hub?

I am very positive. Within Europe, the UK still has by far the deepest pool of investment capital, entrepreneurial talent, top universities and supporting organisations. 

Founding teams and indeed investors still have a very low representation of women or indeed ethnic diversity. How can this be improved to ensure we truly democratise the ecosystem? 

There is no quick fix here. We need a 360 approach in which we showcase role models, train aspiring entrepreneurs, connect founders with capital, then support those founders on their journeys. 

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In an era where environmental sustainability and food security are paramount, the world of agriculture is undergoing a profound transformation. Regenerative AgriTech, a groundbreaking approach that combines cutting-edge technology with ecological wisdom, is at the forefront of this change. As the world grapples with the challenges of traditional farming, Regenerative AgriTech offers innovative solutions that are capturing the attention of both investors and eco-conscious farmers. 

In our latest sector focus article Olivia Sibony, AIN’s Head of Impact and founder of Impact Amplified, explores the reasons for the rising interest in regenerative agricultural technology, the hurdles that this sector must overcome, the promising investor opportunities, and the trailblazing companies leading the way in this transformative field.

What is regenerative AgriTech?

Regenerative AgriTech is a farming and land management approach that enhances ecosystems and food production sustainability through technology. It prioritises soil health, biodiversity, and carbon sequestration by minimising soil disturbance, using cover crops, crop rotation, and livestock integration. 

This practice emulates natural ecological processes to build resilient and productive agricultural systems, addressing climate change, biodiversity, and food security while preserving the environment. Technology plays a pivotal role in optimising resource management, improving efficiency, and supporting data-driven decision-making for eco-conscious farmers.

What are the reasons for the rising interest in agricultural  technology?

Agriculture is a significant contributor to global carbon emissions, accounting for 30% of emissions, 70% of water usage, and almost 90% of deforestation. While the population continues to grow, traditional farming methods yield less. 

Climate change effects, including unpredictable weather patterns and declining pollinators, further exacerbate the situation. Although technology can’t replace the need for human sustenance, it offers opportunities to disrupt and transform the agriculture system, addressing this substantial market’s challenges.

What challenges does agritech need to overcome and what barriers still exist?

Agriculture is an industry steeped in tradition, which has traditionally been slow to change. In addition, many parts of the system are interconnected, which makes it hard for people to adopt change. 

But if we compare it to the banking system, which is heavily regulated, we have nonetheless seen innovative players disrupting the banking system and reaping huge rewards. Similarly the agritech sector is seeing a growth in ambitious entrepreneurs using new technologies that offer new opportunities to transform the food industry. 

What is the investor opportunity?

The investor opportunity is huge. The global regenerative agriculture market size was valued at USD 9.08 billion in 2022 and is expected to reach USD 31.88 billion by 2031, at a CAGR of 15.17% during the forecast period.The market is driven by a number of factors, including:

• Increasing awareness of the benefits of regenerative agriculture, such as improved soil health, water quality, and biodiversity
• Rising demand for sustainable and ethical food products
• Government support for regenerative agriculture initiatives
• Technological advancements in regenerative agriculture practices

North America is the largest market for regenerative agriculture, followed by Europe and Asia Pacific.

AI and new technologies help better understand health soil management and crop health to increase yields, machines are able to turn air into water to reduce water usage. Within the gates of the farm itself, a huge array of innovations are transforming the industry, and this is just the beginning. 

The regenerative agriculture market is still in its early stages of development, but it is growing rapidly. As more and more people become aware of the benefits of regenerative agriculture, it is likely to become increasingly mainstream. It is the perfect time for investors to get on board.

Which companies are doing interesting things in this space?

Biohm is a regenerative biotech company, pioneering innovative solutions. They convert organic waste into insulation materials using mycelium for the construction industry, all while being carbon-positive and manufacturing locally.  

Additionally, they produce waterproof sports clothing and harness mycelium and bacteria for energy production. Their four strains of mycelium are capable of degrading plastics, such as Polyurethane (PU), Polyethylene (PE), Polystyrene (PS), and Polyester (PET), breaking them down into sugars, benign hydrocarbons, and carbon dioxide. Mycelium consumes the sugars and hydrocarbons, while photosynthesizing organisms transform the carbon dioxide into oxygen.

All of their technologies take their roots from regenerative agriculture practices.

Smart Oasis Farm use precision agriculture in disused containers to create food in urban environments.This innovative approach guarantees yields, low energy and minimal food miles. It was created by a Ukrainian farmer, with part of the funds going to fund more production in Ukraine.

Bio Natural Solutions converts organic waste into a spray that extends the shelf life of fresh produce, reducing the reliance on plastic packaging and chemical sprays. This innovative biotechnology benefits the global export of perishable goods like avocados and mangoes, effectively curbing food waste while reusing organic materials.

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In our latest Meet The Investor interview we speak to experienced angel investor Bryony Marshall. She discusses why the present investing climate is a return to ‘normal’, the common mistakes startups make in their fundraising journey and how to avoid them. Plus the importance of networking and community and why we need to first understand the barriers to diversity in the startup ecosystem before we can look at solutions.

Why did you become an angel investor?

For me, angel investing is a way to directly support innovative ideas and help amazing founders on their mission to change the world. As an angel investor you are usually some of the first funding into a start up, and I am using that opportunity to ensure funding reaches a diverse founders. 

What are the most exciting sectors gaining your interest at the moment?

I have always been interested in healthtech and am always excited by new developments in this space because of the direct impact on the quality of people’s lives.

How should startups approach fundraising in the present climate?

The last few years were an abnormality, and we are now returning to normal.  Investors got so focused on growth they momentarily forgot about fundamentals like a path to profitability. When cash is no longer easy to come by, needing to constantly raise to grow starts to look like quite a risky strategy.  From the startup’s perspective they also need to de risk their futures by ensuring they raise enough to give sufficient runway to reach a meaningful milestone before they need to raise again.

What is the most common mistake startups make in their fundraising journey?

Losing momentum in the fundraising process.  Ideally startups should have mapped out the steps in their process and have all materials ready at the outset.  New questions that come up should be answered and added to a FAQ knowledge base.  Every meeting should build on the previous and finish with an ask or action.

What are the common traits of the successful startups you have supported?

Single mindedness of the founders, when you know they’ll do anything to succeed and won’t take no for an answer.  Also, being strong storytellers, this is important for getting everyone on board from investors, to key hires, to customers.

If you could offer just one piece of advice to a young startup, what would it be?

Talk to other startups, find networks and communities where you can learn from other’s experiences.  As an angel investor, being part of the Alma Angels community is invaluable to me for all the same reasons.

Are you positive or negative about the UK retaining its place as a key startup hub?

I lean towards optimism, while acknowledging that the challenges have increased, mainly due to economic conditions. I believe we can continue to attract talent, foster innovation, and maintain a supportive environment for startups, but this requires more acute attention than it did previously.

Founding teams and indeed investors still have a very low representation of women or indeed ethnic diversity. How can this be improved to ensure we truly democratise the ecosystem?

We talk about the ‘barriers to women’ or ‘barriers to diversity’, while these barriers exist, how can we be surprised that we have low representation?  In many cases these barriers haven’t even been properly identified, so we don’t even know what needs to change.  Or worse, they are and the change is dismissed as being in some way unworkable by those who benefit from the status quo.  This is just step one, with the barriers gone, we can then look at how to attract, promote and retain.

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Last year, we introduced a new content series spotlighting our inspiring and diverse network of investors. All leading the way in their respective fields. 

Fast forward to 2023, a very different climate compared to last year, with its own set of challenges. Founders are navigating through a highly competitive landscape, with investors applying more stringent criteria for precious funding.

Against this backdrop we are pleased to announce the launch of Series 2, as we aim to address these challenges and continue our mission of connecting ambitious entrepreneurs with investors.

In our first interview, experienced angel investor, Conor Sharpe, Co-Founder at CircleRock Capital delves into his motivations in becoming an investor.

He offers invaluable advice for startups seeking success in a different climate, highlights strategies to save precious time in fundraising and shares his unwavering confidence in the UK retaining its place as a startup powerhouse. It’s time to meet the investor…  

Why did you become an angel investor?

My motivation to become an angel investor was two-fold: to meet incredible people with huge entrepreneurial ambition and learn from them, and to capitalise on the potential for high returns.

What are the key benefits of being an angel investor?

The key benefits are the continuous learning opportunities, the opportunity of a large financial outcome, very attractive tax reliefs, and enabling investment portfolio diversification!

What do you think are the benefits to startups of angel investment, versus other forms of funding?

There are many benefits including access to patient and flexible capital, and the ability to leverage an angel’s valuable network.

What red flags do you look out for when researching startups?

Red flags I look out for include high employee turnover, founders who don’t have a good grasp on their metrics, and a lack of market validation.

We are in a very different investment climate. How should startups approach fundraising in 2023 that is different from previous years?

Raising capital is harder than ever, so make sure to consider every last funding option to secure funds for your business. Knowing the key metrics of your business is also vital – consider using a solution like Scaleup Finance’s CFO-as-a-Service to stay on top of them!

What is the most common mistake startups make in their fundraising journey?

It’s amazing how few founders have a well-organised data room! Many startups waste time on their initial fundraise talking to VCs – they would be far better off targeting value-add angels.

What are the common traits of the successful startups you have supported?

I have now professionalised my angel investing by forming a leading syndicate called CircleRock Capital – we believe all the startups we have backed have the ability to be the leading company in the world at what they do. A common trait we see is that the very best founders have an understated confidence in the inevitability of their success.

What do you think the Government could do to help support the startup ecosystem?

I think the Government do an incredible job in assisting startups – they have shown a willingness to listen and make changes to policy and increase tax relief limits where necessary. A continued focus on underrepresented founders would be welcome.

Are you positive or negative about the UK retaining its place as a key startup hub?

Extremely positive! The unique melting pot of diverse cultures that is found in the UK will ensure this. 

Join the world’s largest angel investment network, where global angel investors meet the great businesses of tomorrow.

The difference between angel investors and venture capital firms always seems to confuse entrepreneurs.

In truth, the difference is fairly clear-cut.

Who are they? What do they look for? How can they help? How much are they likely to invest? These are all key differentiators.

As an entrepreneur looking for funding, it’s important to understand these differences. Your choice of who to approach and when could have a significant effect on the efficiency of your round.

Xavier Ballester, the co-director of Angel Investment Network’s brokerage division, explains more in this recent interview. He’s talking to our friends at Linear, a specialist prime broker and award-winning hedge fund incubator based in London and Hamburg.

Enjoy!

https://www.youtube.com/watch?v=CcmQ70yw2EA

Prefer to digest your content in written format?

I wrote an article on the topic for Angel Investment Network’s Learn centre. You can read it by clicking here.

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