Outward VC caught up with Amir Nooriala to talk about his approach to angel investing. By way of intro, Amir has had an extensive career in tech serving as the CSO of Oak North Bank before moving to Callsign as the CCO.
Give us a brief introduction to yourself and how you came to angel investing?
I fell into angel investing by accident, but it’s since become an important and super interesting part of our lives (I generally co-invest with my wife Claire). Together with Devin, one of the co-founders of Outward VC, we founded a group called Fintech North London. Pre-covid, we would meet up every six to eight weeks as an informal group of FinTech founders and execs to talk privately and in confidence about topics affecting their businesses and in general about start-up/ scale-up issues. Quite a few of the group’s members were being approached by very early stage founders for mentoring or seed funding. We decided to semi-formalize a regular pitch session over pizza and a few drinks and that’s where I began my journey as an angel investor. We did it, they pitched, we invested and the rest is history!
Is there a common theme across your portfolio investments?
I personally am obviously more comfortable in FinTech but there’s actually no common theme in terms of a sector but we do have a simple investment thesis:
- We have to agree that the problem is real
- That what is being pitched could be the solution to solve that problem
- And that we not only need to have conviction in the founding team, but we need to get on with them personally too.
Let me explain on the last one as it can sound weird. As an angel investor, you have a choice – you can invest money and not be involved in any way at all, or you can be active. My wife and I like to be active angel investors because of who we are as people. If we are passionate about something, we are backing it because we believe in it and if we believe in it, we want to help. This could be in terms of advice, introductions or whatever else it is – we want to help.
When you are working full time and you’re married with kids, you need to sacrifice personal time to do this and therefore you are only going to sacrifice that time for people you like and want to spend time with.
What are the red flags for you as an angel investor?
There are some common questions in my mind when going through the due diligence process:
- How long has the business been going for? I’m weary of businesses that have pivoted a number of times, burning through investor’s money and in some cases the SEIS and EIS round may no longer be on option
- Can the founder clearly articulate the problem they are solving? I would struggle to trust in their ability to execute if not
- Does the founding team have a good mix of skills and mind-set? I’m looking for the right level of hunger and purpose. Team make up is key and having a technical co-founder to compliment the CEO is always a massive plus
- Are the funds being used towards the growth of the business or the founder’s salaries? I would prefer if founders have to keep suffering (unfortunately) whilst capital goes towards growing the team, investing in marketing or building product
How do you support your founders and where do they need help most?
To really simplify this, it would be time, experience, and network. If you are willing to invest – and you believe in the product and its value – you should be willing to help out and introduce the team to potential buyers, investors or contacts. Founders tend go to myself and Claire with different questions given our backgrounds: be it scaling, operations, advertising and marketing strategies and/or commercializing the business.
If you had a magic wand, what is the one thing you would fix about the Start-Up ecosystem?
That’s a tough one…we have a massive natural tendency to back things that look like something we’ve seen before in terms of both the business case as well as the founding team. People generally invest in the founders that have got the “right” background or went to the “right” University, or their start-up is the “this of that”, and this business case worked in that sector so it will work in this sector as well. I get why people do it and I’m not going to say that I don’t suffer from that same unconscious bias but the problem is, it leads to iterative change and not to ground breaking innovation.
So if I had a magic wand, it would be to just give greater opportunity to start-ups that are doing something completely different and giving them a fair chance of getting investment.
To end, tell us about an investment that has surprised you – positive or negative and why?
We invested five days before lockdown (probably the worst time you could ever invest in a social planning app!)
To be honest with you, it’s been about a year and a half since we made our first investment so it’s still too early to have any good or bad surprises – although I’d be disappointed if any had gone under! However, if I were to draw on one company it would be our 1st investment which was Howbout – a social planning app that connects people’s diaries and facilitates meetups.
We invested five days before lockdown (probably the worst time you could ever invest in a social planning app!) and it’s been great to see how quickly they locked down and minimised expenses but also pivoted and adapted, shifting their marketing towards individuals hosting online classes who use the platform to connect their schedules with their students.
As a result, they maintained both DAUs and MAUs and continued to grow, extended runway and were ready for the various stages of the world opening up. During that period they displayed the amazing growth and network effects we were hoping for and as a result they were able to do both a successful crowd round and also get investment from Atomico’s seed fund. Most people would have folded in those circumstances. So I give massive kudos to the team, for what they’ve managed to do under lockdown and as a first time founding team as well.