My Angel Investment Thesis
Being a good investor is, first of all, a matter of discipline.
It is obvious that most of the time being a thematic-driven or general investor gives you more flexibility on where to invest, but it also makes easier for you to get lost into any opportunity that may knock on your door. Shaping an investment thesis instead helps you finding a rationale and restricts your playground in such a way that you cannot forget what it is relevant to you.
A thesis is always there to remind you why you invest in what you invest, why exactly you are in the game and what your inner investment boundaries are.
Of course, you need to stick to it. But if you do, it will make your life much easier, and it would make easier for the right founders to find you too.
So let me start with what I know that is driving my own investment thesis. I know that tons of data are produced every day and this quantity is increasing exponentially every year. I know that computing power and cloud storage are becoming more accessible, cheaper and more efficient. I know we live in an era of relevant scientific discoveries, where new algorithms are created every year and novel approaches to old problems are tested every day.
This is the century of Complexity, where studying non-linear relationships between phenomena is becoming the norm and tools from a certain discipline can be easily applied to a different field unlocking new potential breakthroughs.
Finally, I know that capital is abundant, although often not efficiently allocated. The VC industry is consolidating, with the creation of many more mega-funds and more money deployed into fewer companies. Those companies have to be “VC-approvable” and therefore are created with a specific roadmap in mind, trying to solve a specific narrow problem, often with an incremental type of innovation rather than looking for profound technological disruption, and following well-developed business models and gigantic markets. These are some of the reasons why many companies we admire and love today had very hard times in their beginnings.
These are facts. Nothing more than data pulled out of analysis and events you can easily observe around you.
Now let’s jump to the most complicated part, i.e., what I think I know.
I actually think that relevant innovation should be pursued, rather than simply internet companies with new business models. I think that technology plays a huge role in this, and that deep technology in particular (where engineering and science converge) is the road ahead.
I think that deep tech represents an opportunity because is an underserved market, because the risk/return profile better fits a power law distribution, and because the exit horizon shows to have a “barbell distribution” (you can either be immediately acqui-hired or do a greater exit later than traditional SaaS companies). I do think real deep tech is also something hard to be copied, and then makes it a more defensible business.
I also think that smart-capital should make more resources more accessible to most of us and that individuals should not be limited by physical and mental limits, but rather be more autonomous and both physically and virtually healthy.
I think the future will be decentralized, data-driven and exponentially evolutionary, and that the human complex system will be more robust, healthy, and intellectually advanced.
And this is the future I want to help achieve.
So without further ado, here it comes my investment thesis:
I back founders that use foundational technologies to enhance human physical and virtual resilience and leverage resources more efficiently.
Weird thesis written in complicated language, isn’t it? But what does it really mean?
Well, it means that I want to look at companies building horizontal stacks and using enabling technologies such as Artificial Intelligence, Quantum Computing and Blockchain to make us smarter and healthier both physically (Synthetic Biology; Genomics; Diagnostics; Neuroscience; Drug Discovery) and virtually speaking (Cybersecurity). In order to have this broaden access to knowledge and well-being, I also need to look for new ways to be “fueled up”, either by producing and storing sustainable Energy as well as by creating more efficient and balanced molecular structures (New Materials and Chemicals).
A final note: this thesis does not begin saying “I invest in companies that…”, but it deliberately highlights the most important things I, as a researcher, advisor, angel, and generally as a professional look for: team and people.
I completely buy in the current opinion that seed is not a stage but rather a phase and I know that is very hard to find quantitative signals in the very early phases of a multi-year long path, so I try to base my analysis mostly on people and try to gather as many data points as possible on the rest (will publish soon some of those criteria in different blog posts).
My initial screening checklist will be the following:
1) Full-time co-founders team of at least 2 people;
2) Having a functional MVP/prototype;
3) 3–6 months of revenues (even small, but coming from testing the product and not from consulting fees);
4) Prevalently B2B or B2B2C business;
5) Preferred pre-money valuation lower than $7M.
I am starting angel investing now, my tickets will be small, I am not in a rush to invest in something, and I only put money where I am extremely convinced and confident about the tech and the people behind it. This means I do not invest as many angels after two meetings or without much diligence or driven by FOMO.
So if you are an entrepreneur working on an audacious project in deep tech and need some help or simply wanna chat, feel free to reach out!