Andrew Craissati has had a storied career with over 20 years in senior roles across investment banking, Universal Studios, National Geographic, the David de Rothschild family office and the Virgin Group. Working closely with the country’s most famous entrepreneur, Sir Richard Branson, Andrew gained remarkable insight of the world of early stage investing.
As a founding member of the Bricks, an early-stage investment firm, for the past 12 years he has used his personal experiences in supporting companies. Not just with capital but with constructively designed support and value-additive skills and knowledge. For our latest Meet the Investor interview, he discusses the benefits of angel investing, the most exciting markets for investment at this time and an unorthodox but effective approach for identifying the top performers.
What’s led you to angel investing?
Coming out of 6 years of working closely with Sir Richard Branson as a regional chairman across the entirety of his Virgin Group, I had a remarkable set of experiences in the art – and science – of early stage investing. One of the key aspects which I most enjoyed was the people part of investing: realising and accepting that a business idea is a mere manifestation of people coming together and embracing people talent. So, in wanting to deploy wealth into early stage investing, I was drawn to it because of that very premise. How could I use my personal experiences in supporting companies not merely with capital but with constructively designed support, nurturing and genuine, value-additive skills and knowledge?
It seemed logical, therefore, for me to focus on early stage investing as this seemed to be the point where entrepreneurs need or want both capital and legitimate support. I felt as though my past experiences led me to a point of focus where companies were young enough to warrant the type of assistance I’m capable of providing.
What is your most active area of interest?
I would contend that our area of interest is driven more by stage and less by sector. To the extent that I and my family office are driven by a thesis, it is focused principally on several guiding parameters: (i) the founder or founders must come from the sector which they are targeting (and with domain expertise), (ii) the company must have the ability to articulate its product or service (whether yet built or not) and to demonstrate demand, (iii) there is clear differentiation in the company’s approach and (iv) both the company and we must believe that we make a difference to them by virtue of our value add approach.
In your opinion, what are the potential pros and cons of angel investing?
Our style of investing is very time-consuming and requires a steady level of dedication and focus. To my mind, this is the disadvantage of investing in early stage companies: the time that is demanded of an investor who leads (as we do) or an investor who supports and serves. Of course, this is also the rewarding aspect: the ability to be close and remain close to the founders of a business throughout the journey, even where our investment gradually becomes small by comparison to the other investors in the company.
What has made the biggest difference among your successful investments – traits or tactics that have made the biggest difference in the startups being flops or top performers?
I believe that the tactic (by us) which has driven the greatest additive aspect to our investments is our use of our in-house psychologist. While this might be an unorthodox response, it is by far the most valuable aspect of our pre- and post-investment processes.
Pre-investment, all of our founders and lead management team members take a fun and interesting test and private 1-on-1 interview with Sylvia, our psychologist. This process (we call it Team Dynamics) allows us to have an extremely deep understanding of the founding team and their relationship with one another (and with us, too).
Given that founding teams’ collapse is so often the main contributor to company failure, we have found this process invaluable in understanding the teams we’re meeting and helping them to maximise their relationships and interdependence.
You have started, led, and exited several successful ventures. What is the one piece of advice you would now give to your younger self starting out on your journey?
Listen to your gut. Sometimes it does a better job for you than analysis.
Do you invest more with the head or the heart/gut?
We invest with our head but the gut gives a very good reason to pull the plug or change an opinion. The key is to listen to the gut when it sends you a red flag.
Do you feel that being an operator before becoming an investor creates advantages over those with experience solely in the investing space?
To my mind, angel investing is a mixture of conceptual and theoretical thinking as much as it is about building relationships and bridges. It is key to understand the human aspect of being an entrepreneur: their fear, their self-confidence, their willingness to speak openly: these come most easily to those who have been in the same shoes or who have had to face similar challenges. That said, I know many institutional investors who are rich in their knowledge and who give sage advice: this comes from their years of seeing and processing challenges.
You’ve invested right across the globe during your career, where do you think is the most exciting market for angels at the moment?
Asia is always touted to be the most important continent on the planet, if only by its sheer population and geographical spread. True, it has critical mass but it also has tremendous diversity and cultural differences and challenges. I have a tendency to prefer the European markets at the moment as the valuations are generally well constructed, the legal systems are mature and structured to minimise legal issues and litigation and the cultural divide is minimal. While we do invest in North America, it can be more challenging in terms of legal systems and valuations.
Why do you use AIN to find investments?
AIN puts thought into the deals it shares and introduces. There is a genuine level of care and professionalism in what it does and how it does it.
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