From The Straits Times    |

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There’s no one-size-fits-all solution when it comes to investing, but there’s plenty to learn from other women’s challenges, successes and failures. How I Invest is a column where we ask women about their financial journeys to help us demystify the world of investing.

Hester Spiegel-van den Steenhoven wants women to know that being an angel investor isn’t as complicated as it might seem. With the right knowledge and a little confidence, she believes that anyone can claim a financial stake in emerging businesses.

The 46-year-old got her first taste of angel investing in 2019, when she was working at Deutsche Bank in Germany. A friend recommended that she invest in early-stage start-ups; her first investment was in decentralised infrastructure for the real-world economy. She loved the experience so much that she left her corporate job at the bank to become an angel investor.

In August 2020, the Netherlands native moved to Singapore for her husband’s job. By chance, she found out that an ex-colleague was living in Singapore too, so the pair made plans to meet.

“Maaike and I had worked together 15 years earlier in Germany, when we were both part of the mergers and acquisitions (M&A) team at the business management consultancy company PricewaterhouseCoopers (PwC),” Hester shares. “She had been an angel investor in San Francisco, where she lived before moving to Singapore.

She was surprised that angel investing wasn’t as accessible here as it was in San Francisco; the scene in Singapore tended to be elitist and you had to clear a high threshold – typically US$20,000 ($26,757) – to get started. We talked about this when we met up, and decided to do something about it.”

Hester and Maaike gathered a few other women and researched the start-ups in South-east Asia that they could invest in, and from there, Epic Angels was born. Now, almost four years later, Epic Angels is the largest female-only investor collective in Asia- Pacific, with nearly 300 investors from countries across the region.

“To join Epic Angels, you need to meet the accredited investor requirements in the country you live in,” Hester continues.

“We ask our investors to make two investments a year, so that we remain an active angel investor network. This attracts the best founders.

“I’ve found that the women in our network are keen to invest their money in solutions that they believe create positive societal change. They want to fund the changes that they wish to see in the world.”

Hester’s investing journey in numbers:

Late 30s: Age when she first started investing

$66,906: Biggest investment loss

23: Start-ups Epic Angels has invested in since 2020

$2,007: The minimum amount needed to invest in each start-up funded by Epic Angels)

300: Female investors who have joined Epic Angels

Up to $334,555: Amount Epic Angels invests per company

75%: Percentage of Epic Angels’ portfolio companies that are women-led

Have you always worked in finance and investment?

Yes. I set up the first campuses of 42 Schools (a software engineering school) in Germany, basically taking them from “zero to one”. Prior to that, I ran large integration projects at Deutsche Bank and worked as a consultant at PwC.

What was your view of angel investing before you decided to get into it?

I knew it was risky, and didn’t know where to go to learn about it or acquire the necessary hands- on skills. I also didn’t think I knew enough about investing, finance, tech or different industries to get involved.

It was only when we started building Epic Angels that I realised angel investing could be about so much more (than just financial returns). You can support founders and make a real difference with your money in areas that are meaningful to you. I personally love working with people who create with a purpose, and who are clever about how they go about it.

Along the way, I also discovered that angel investing is a constant learning experience – every deal you see reveals a problem in an industry that you may not have been aware of, and gives insights into how technology can solve these problems.

Did you have a mentor or any guidance when you first decided to invest?

Not really. My friend in Germany introduced me to angel investing all those years ago, and I enjoyed listening to his perspectives, but that was more of a co-investing experience rather than a mentor- mentee relationship.

He advised me to look at the total market size. The bigger the market size, the greater the number of potential customers, and the greater the number of potential partners in that market – that is, partners who extend your reach to potential customers, and partners for M&A activity (acquire or be acquired) once the company is mature enough for M&A activity.

Do you have an investment strategy and, if so, has it evolved over the years?

For the longest time, I was mostly focused on investing in Educational Technology (Edtech) solutions because I’m passionate about what tech can do to make learning better, more fun, more personalised, more relevant and, last but not least, accessible to groups that typically don’t have access to quality content or education.

The majority of my investment portfolio is still Edtech, but I’ve consciously made the shift to include other industries as well – I like how angel investing teaches me about industries that I wouldn’t otherwise know about, and opens my eyes to different markets, trends, problems and solutions.

Besides, the Edtech investment market is back to the level it was at in 2016. Solving the challenges in education also typically takes longer, and that’s where angel investors, who have a longer investment horizon and more patience, come in.

Have you made any financial or investment mistakes? What did you learn from those experiences?

I recently lost $50,000 from an Edtech investment that I made in 2021. The start-up helped teachers become more efficient with technology and digital infrastructure. Unfortunately, the company was not able to create proper engagement on its platform, there was a founder dispute, and investors did not want to come on board before revenues picked up enough to sustain themselves.

The loss taught me to always start investing with a small amount, and to gradually top it up in subsequent rounds if the company is doing well. Coincidentally, this is also the best investment advice I’ve ever received.

What’s your greatest investment win to date?

Arogga, a health tech company in Bangladesh and the very first company Epic Angels invested in, which I continued to support with a follow-up investment. The company’s valuation has grown 7.5 times since our first investment.

Some women may view angel investing as a risky venture. What’s your advice to them?

You need courage to invest, and courage takes time to develop. You can find thousands of reasons to avoid investing in any start-up. For instance, it’s too early, there’s no market for the product, it’s too amateurish, and so on. Investing is really about taking a leap of faith.

What can help you grow this courage is to join a peer-network, constantly educate yourself, and start with small amounts. By investing small amounts of money in, say, 10 start-ups, versus investing the same amount in one start-up, you can learn a lot: hands-on investing skills, what motivates you as an investor, and what makes a successful start-up founder, for example.

Once you’ve acquired enough confidence, you’ll feel better about investing larger amounts, and therefore enjoy a bigger return if everything goes well.

Does one have to be well-connected, financially savvy or wealthy in order to invest?

Being financially savvy is important because it can help you understand profitability potential as well as pinpoint red flags in financial documents, such as large loans on the balance sheet or drivers of cost on profit-and-loss statements.

Many women want to learn about investing, but are put off by the financial jargon or don’t believe that they’re knowledgeable enough about money. Part of the goal of Epic Angels is to help our investors understand the financial information found in data rooms, so that they can make better investment decisions, regardless of their background.

I don’t believe you need to be wealthy to start investing or to be a good investor. We do recommend investing no more than 5 to 10 per cent of your total wealth into early-stage start-ups because of the risks involved. That said, knowledge and understanding of the vetting and investment processes are so much more important than having a lot of money.

You’ll get returns if you know what to do, rather than by simply having a high net worth.

The world of venture capitalism may seem confusing to many women. How do you hope to make it more accessible and less intimidating for them?

To start investing with Epic Angels, you need about US$10,000 ($13,378) – our ticket sizes range between US$1,500 ($2,007) and US$5,000 ($6,689), and if you’re just starting out as an angel investor, we recommend making three to 10 investments to grow from “curious” to “confident”. For experienced investors, which make up about 40 per cent of our network, the small ticket size is a way to get into start- ups early; they can always top up their investment in the next funding round if the company is doing well. Both beginner and experienced investors are part of our peer community.

Initiatives and events we offer within this peer community include monthly pitch nights, meet-ups with start-up founders, Epic Angels partners, and portfolio company founders, as well as in-company sessions for female senior executives, with real- life pitches involved. We also provide a library of resources ranging from podcasts, to online articles and a member-led Whatsapp channel, where Angels can ask any questions about investing, industry trends, and so on.