Investing as a micro angel

Joan Westenberg
1 reply
This is something I've started talking about on Medium, but it's a topic I think would be hugely relevant to the maker community here... Basically, the idea is that angel investing can be done at the micro level. The traditional concept of an angel investor is normally a former founder, with a multimillion dollar exit behind them, or a wealthy individual with a large personal fortune who can afford to embrace risk as an independent. But there is room in investing for smaller scale crowdfunders, investment squads and individuals to back companies they love as micro angels. People who have enough cash flow to back ideas with a 4 figure check and become a thriving part of a startup’s journey. This is particularly relevant for marginalised founders, founders of colour and queer/trans entrepreneurs. We face massive hurdles to gaining traditional funding that can prevent us from using that route to build and scale a business; where we might have a much stronger network of individuals able to invest as micro angels. Prof Panayiotis Ketikidis puts the role of a micro angel well: “Support structures for startups such as acceleration programs and incubators may offer funding and mentoring, but this is limited in scope and duration. Venture capitalists can cherry-pick the best teams to invest in, yet there are many worthy startups left behind. The resulting gap in the investment landscape provides an opportunity for small investors to reap large gains — think ‘micro-Angels’ writing average cheques of €10,000 to €50,000. Veryearly stage company valuations are by necessity quite low, and ‘first money in’ Angel Investors can leverage this to their advantage — taking a larger amount of equity at a lower price, along with other advantages, such as discounted follow-on, preferred options, and non-dilution terms.” There are thousands of investors who put in $1k checks; it’s not a new concept, and you can see it happening in every single startup ecosystem, whether it’s in Sydney or Silicon Valley. My own journey into startup investing has been colourful, to say the least. I don’t come from a finance background. I don’t come from privilege. I don’t come from money.


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