The Super Angel Podcast
00:12:06 · Anthony, Pranav Sood, S2
[00:12:06] S0: I [00:12:06] S3: think personally, it's given me a lot of energy because I think there are not that many things more energizing than spending time with people who are super passionate about solving interesting problems. And so for me, that just really gives me a lot because it inspires me. It it teaches me. It gives me exposure to people or topics or geographies that I may not know that much about. And that I find personally a very stimulating thing. I think professionally, it's also helped me a lot because partly from the point of view of building relationships, whether it's with VCs, operators, angels, you know, that's been a very useful contributor to me on a professional basis. Also, I I now see companies that I've either invested in or thought about investing in from a commercial perspective as well. So, you know, Airwalex might be able to serve them. They might, you know, be a partnership opportunity. There might be something of that nature where we could collaborate. And so I think those two things, you know, sit quite nicely together. And probably, going back to the point around focus, if you happen to spend time focusing on things that are adjacent to what your, you know, most of your professional life is spent on, that's also a very, you know, easy way to keep that connectivity and and strengthen some of that value that you can offer to the companies you're investing in. Oh, no. [00:13:24] S0: It's not about the piece of shit. [00:13:43] S2: Also, what portfolio companies do you currently have that many would know? That kind of thing.
00:13:48 · Pranav Sood
[00:13:48] S3: Yeah. Sure. So as I said, my aim is to build a portfolio of between 50 and a 100 investments. I've currently got somewhere like 25 to 30. I don't know the exact number off the top of my head. My focus up until now has been pretty much exclusively on b to b SaaS and fintech. And ideally, it's the kind of intersection of those two things when people are doing both as part of their business model. I've invested across geographies. So UK, Europe, Middle East, and also The US as well. I guess some of the ones that I have been most lucky to participate in, I love a company called EASOL, e a s o l. I invested in that a couple of years ago. They subsequently raised it from Tiger and are doing really, really well. Anthony and I actually co invested together not that long ago in Lucas, who is building something called Meterly. They've now changed their name, which has gone from my head, which is Hyperline. Yeah. And quite a few others, which is, you know, which have been subsequently funded by great VCs and and other and other great investors. From a thesis perspective, my view is quite clear, which is need an interesting market, really need to focus on founders. And then the thing I always probably spend the most time on is distribution because I've seen so many great products and great product teams. But I think if you don't either have the DNA to distribute the product or you don't have a credible distribution strategy, it's always hard to get to scale. And so, generally, when I'm doing diligence, that's what I tend to spend the most time on.
00:15:14 · Anthony
[00:15:14] S0: And SME distribution is notoriously difficult. Right? Especially Europe. I mean, such a fragmented SME landscape. What an SME is in The UK is not in the middle stand in Germany. It's not in France either or The Nordics. Right? Yeah. How do you think about portfolio diversification versus capacity to support the founders? Right? Because I guess in some respects, help from a diversification perspective, but then capacity is also of importance. Right?
00:15:40 · Pranav Sood
[00:15:40] S3: Again, it's a function of the stage that you're at in building your angel portfolio. My thesis is that at the early stages of building a portfolio, your main focus should be delighting the founders that you've invested in, or at least meeting whatever commitment you made to them when you said you're going to invest in their company. And so to that end, you have to be able to support because if you don't, then you're not building a body of work. You're not living up to whatever commitment you made when you invested. I think once you get beyond a certain stage, and I'm probably gonna start to get to it, you know, as as I get to 40, 50 deals, it gets harder and harder to have that kind of relationship with founders where you can go deep on a particular problem or you can talk about something in a great deal of specificity. But I think you can only earn the right to be in that point if you've done the hard yards at the beginning. And so I don't think I'm yet at the point where I care about portfolio diversification. I'm still at the stage where I care about just doing what I said I was gonna do and and hopefully delighting the founders who've let me invest.
00:16:41 · S2
[00:16:41] S2: Literally, just before jumping on this call, I was talking to another angel in the European ecosystem who I think many would recognize as at least very active and prominent. But his investment strategy is three to five deals per year. I don't wanna do more than that. I don't want to dive too deep on too many, and I don't believe that I have the capacity to see more than probably a 100 deals per year. I spoke to him about it in the, you know, light of this Super Angel podcast has, you know, we're really focusing on the on the angels that do tend to do in the numbers of 20 deals per year or so. So I'd love to hear your take on that decision between how many deals you want to do in, you know, on the deal flow side or the diligence side. There's also work to be done there, right? Yeah. So my view on
00:17:33 · Pranav Sood
[00:17:33] S3: this is I'm not a professional investor. I'm I'm basically a glorified hobbyist. And with that in mind, I'm not sure I necessarily have any differentiated ability to know which three or five deals are gonna be the right three or five deals to invest in. With that in mind, I then think the thing to try and do is optimize for whatever number you think is the minimum viable portfolio size that you have to get to in order to give yourself the opportunity of getting a fund returner in that sample size. So hence why I think my preference is the bigger portfolio size. I think the trade off I have to make then is diligence can only be so deep. And usually the SLA I set myself is I try and have a view on whether I want to invest or not within a couple of days, you know, or at least a weekend from having spoken to somebody. And also, you know, realizing very clearly that you are writing a small check, you therefore have very little right to demand anything that the founder doesn't already have or hasn't already prepared for other stuff. So I basically say a lot of the diligence either I should be able to do in a call or very quickly thereafter. And I'm, you know, happy then to make my mind up quite fast and not, go through a protracted process of figuring stuff out. The trade off then is that I'm not seeing thousands of deals, so therefore the conversion rate on stuff that I have conversations with is pretty high. But again, I'm happy to tolerate that because I think the approach I wanna take is to have a slightly bigger sample size and and give myself a chance of having a few outliers in that population. Yeah. And certainly for me, I generally find that entry points after seeds start getting a bit punchy from evaluation perspective. And so I'm very much at the pre seed or seed stage of the cup table.