This interview with Mike Lebus, founder and managing director of Angel Investment Network, was originally published in Sifted. You can read the full article on ‘How to Make a Smart Angel Investment’ with views from other industry leaders here.
Mike Lebus (UK)
Mike Lebus is co-founder Angel Investment Network, a platform catering to 205,000+ angels which has backed the likes of bed mattress startup Simba, geocoding business What3Words and kids media company SuperAwesome.
An angel investor for 6 years.
Number of personal investments: I try to make two personal investments a year. Through the venture division of the company (me and three others), we have a stake in over a hundred companies.
Average cheque size: I normally invest £10-25k.
The biggest misconception about angel investing is… that investors should be based in startup hubs like Silicon Valley and London. Online platforms and digital networks now allow investors to find great deal flow wherever they are based.
Do… take the time to meet and get to the know the founding team. When you invest in early stage projects the idea takes second place to the team. This is because the idea will have to change and evolve to be a success; and it’s the team who are responsible for doing that!
“Investors don’t have to be based in startup hubs like Silicon Valley and London.”
Don’t… invest in only one company. No matter how good the opportunity looks, there are so many unknowns when it comes to early stage investment. It’s a much better strategy to invest smaller in more businesses.
The biggest mistake I made was… to miss out on a great opportunity because I failed to build a good relationship with the team. In the early discussions I should have focused on getting to know them, their vision and their processes; instead, I was too blinkered on the valuation and deal terms. It ended up being a waste of everyone’s time. The company went on to do very well!
My personal top tip is to… manage your expectations. If you’re obsessed with returns and timescales, you’ll end up being a burden on your portfolio companies. If you relax and trust the team to execute on their vision, then you can focus on finding meaningful ways to help them with your experience and connections.
My most recent investment was in… Sweatcoin, an app that tracks your outdoor steps and rewards you with digital currency. It’s been the fastest growing health and fitness app in history in every country it’s launched in on the App Store. I know the founder well, so knew how talented he was. I also loved the company’s innovative approach to incentivising people to become more active and get healthier.
The deal I regret missing out on is… Funding Circle. We helped them with funding very early on, but I chose not to invest personally. Their IPO last year valued them at £1.5 billion!
If I could change one thing about the European angel scene it would be…More government incentives to encourage more people to invest into startups. The UK have the SEIS and EIS schemes, which have really helped stimulate early-stage investment. I think more European countries should introduce similar incentives.