{"id":36591,"date":"2025-01-19T13:48:49","date_gmt":"2025-01-19T13:48:49","guid":{"rendered":"https:\/\/peraltafinancing.com\/angel-investor\/thoroughbreds-and-zombies-the-highs-and-lows-of-an-angel-investment-portfolio\/"},"modified":"2025-01-19T13:48:49","modified_gmt":"2025-01-19T13:48:49","slug":"thoroughbreds-and-zombies-the-highs-and-lows-of-an-angel-investment-portfolio","status":"publish","type":"post","link":"https:\/\/fivemor.com\/?p=36591","title":{"rendered":"Thoroughbreds and Zombies: The Highs and Lows of an Angel Investment Portfolio"},"content":{"rendered":"


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After 15 years of angel investing, it\u2019s interesting to see the outcomes of our investments, the number of companies that have failed and the number of companies that are thriving. This information gives investors a better sense for likely returns and strategies to achieve them. The number of angel successes and investee companies that are thriving is promising, but \u2018investor beware\u2019, angel investing is high risk \u2013 there are no two ways about it.<\/p>\n

Portfolio overview<\/h3>\n

Overall we\u2019ve invested in 106 companies and had 32 exits. 15 companies have provided positive investment returns \u2013 12 of these were acquired or listed. There have been 17 negative returns.<\/p>\n

The existing portfolio is looking quite impressive with a number of \u2018thoroughbreds\u2019. (We love thoroughbreds because they are not mythical creatures like Unicorns!) These thoroughbreds are making a name for themselves the world over (about 18% of the portfolio are thriving) including Fuel50<\/a>,\u00a0Spoke<\/a>, Parrot Analytics<\/a>, Lawvu,<\/a> and\u00a0Datagate Innovation<\/a>.<\/p>\n

We do have a few \u2018zombies\u2019 (about 11% of the portfolio) \u2013 yes, that is a commonly used term for portfolio companies that struggle to achieve scale and sometimes become slow growth lifestyle companies!<\/p>\n

The majority of the companies are still in high-growth mode (47% of the portfolio).<\/p>\n

Successes<\/h3>\n

Recent successes include companies such as\u00a0Moxion<\/a>, which returned\u00a05x investment in under five years,\u00a0Merlot Aero<\/a>, which returned 2.6x in five years, and back in 2018 there was local company\u00a0SwipedOn<\/a>, which returned\u00a02.4x in less than 12 months.<\/p>\n

Of the remaining successful portfolio companies, there are a number that have attracted significant further investment from later stage investors like venture capital and private equity firms. Understanding where and who the next stage funders are for our companies is a critical part of the equation.\u00a0 Companies need more than angel money to be globally successful.\u00a0 Many Enterprise Angels portfolio companies have successfully secured such investors including\u00a0Fuel50<\/a>,\u00a0 UBCO<\/a> and\u00a0Heilala Vanilla<\/a>.<\/p>\n

Economic \u00a0Effects<\/h3>\n

We\u2019ve been asked many times over the years what happened to Angel Investing during an economic downturn. Everyone (Angels, entrepreneurs, market commentators, the man on the street) expected the answer to be that Angel investors held their breath, pinched their pockets, turned in their wings and stopped investing. Makes sense \u2013 most people will hold onto what they have and not take on risk in periods of great uncertainty.<\/p>\n

However if we look back to the GFC, and our experience over the last two years Angel investors here and in the US kept on investing. There are several thoughts on this:<\/p>\n