By Jordan Green, President Emeritus
When we think of founders, we mostly think of those individuals who are driven to establish a new business venture, most often these days a start-up. Those odd ventures intended to risk everything to grow rapidly and deliver outsized rewards for all that effort and risk. Those founders are often considered just a bit crazy for trying to do something that seems quite unrealistic and extremely risky.
Consider then the individuals who choose to invest their own, usually hard-earned, cash to support those founders. Surely those investors must be at least a little touched by that same craziness!?!
All these people share the belief that they can, together, build a business venture that will, even if only in a small way, change the world – hopefully for the better. Thus, we come to the world of Angel investing.
When I set out last century to bring a new, impassioned vision and reality to supporting innovative ventures in Australia I wasn’t yet sure what shape that would take. First, I co-founded a venture capital firm to demonstrate that venture capital could be done better and faster than it was being done at the time in Australia. My partners and I did that, delivering an 8x return to our investors in just 5 years!
At the time there was just one actual Angel group in Australia, in Melbourne, founded and led by the grandfather of Angel investing for our nation, Bob Beaumont. Bob has a remarkable life story worthy of telling but, for now I will simply summarise that he was a successful venture founder who graduated from successfully building and selling his own businesses to being an active member of the VC community in Silicon Valley in the latter half of the 20th century. When he returned home to Australia towards the end of the century he brought with him the expertise, the vision and the culture to foster high-growth start-up ventures and the skills, knowledge and insight to guide others to invest in those ventures.
Meeting Bob when I too returned from building a successful start-up in Silicon Valley was one of those wonderful moments of serendipity. Both engineers with a passion and experience for starting and growing technology-based ventures. Both with a deep commitment to the idea that the right investors with the right investment model could help Australia enjoy far greater economic benefits from our broad and deep heritage as a nation of innovators. By the early noughties, when I decided Australia needed a community of Angel investors, Bob’s group was doing well but, the members didn’t want to spearhead a movement. So, I decided to champion a new community, a community of Angel groups. A collection of collaborative individuals who would work together to build the ecosystem for start-ups, invest their money and their time for the dual purpose of doing well (making money) and doing good (making the world a better place).
Over the next couple of years actively looking, I found a small group of motivated and like-minded individuals who agreed to all work together to fulfill the vision. We decided to establish a national association as the seminal influence, a platform and instigator to drive the formation of Angel groups across the nation. The Australian Association of Angel Investors (AAAI – ‘triple a, i’) was formed from the four groups founded by the members of that dedicated team plus one other.
- Angels Institute (Qld)
- BioAngels (SA)
- Brisbane Angels (Qld)
- Capital Angels (ACT)
- Melbourne Angels (Vic)
From there, within 5 years, the community grew to 19 Angel groups around the nation in every state and territory except the NT. I enjoyed helping each one of the new groups get started, provided training for those who wanted it (still do) and knitted them all together. In partnership with John Mactaggart, founder of Brisbane Angels, I made the Australian Angel community a significant player in the leadership of the global Angel community and I took on a particular interest and role in promoting the cause of Angel investing across Asia. Always with the focus of creating the networks, the relationships and the knowledge that would help the portfolio companies of Australian Angel investors.
Of those original groups, the Angels Institute merged with the AAAI and the BioAngels has closed. The AAAI served its purpose well giving birth to a thriving start-up investment ecosystem. Along the way other Angel groups have formed, evolved, closed and been replaced so that today there are still around 20 Angel groups spread around the country, almost all are still non-profit collegiate collectives. There are many other sorts of organisations using the now popular Angel appellation to attract people to their fee-for-service businesses. Even governments are using the term, albeit with limited real understanding and no direct support for the core of the community.
I started my own Angel investing nearly 30 years ago, although like many at the time, I didn’t know that’s what it was called. Along the way I have enjoyed returns from 100x to zero and even a couple that cost more to exit than originally invested. However, in many ways, the greatest riches I have gained are in the community of friends and colleagues at home and overseas. Some of the smartest and most dedicated people. Men and women committed to improving our lives by backing ventures designed to change the world for the better.
When I started Melbourne Angels a key premise was that I was creating an organisation and community that would have its own identity and continue well past my own involvement. At the same time, my own networks, experience and passion were fundamental to getting the group established and have remained a significant contributor to the success of the group.
To be true to my own vision there was always going to be a time to step down from the leadership role and to that end I have strived to put in place an orderly succession plan. Indeed, it has been a privilege and an honour serving the members and our community in this capacity and to be so strongly encouraged by so many inside and outside Melbourne Angels over so many years to continue my contribution as leader of the group and of our national Angel community.
It is with great satisfaction this year that I pass the baton for leadership of the Melbourne Angels to Paul Baron. Even if it is with very mixed feelings that I come to this juncture. Feelings which have nothing to do with Paul, in whom I have great confidence. No, it is that bittersweet moment when success also means letting go. A moment I wish to come for every founder.
Paul is working with members of the group deeply experienced in the Management Team and with new Team members bringing a fresh, diverse set of expertise and perspectives to continue the success.
In the last 15 years we have come from modest beginnings to being one of the top start-up investors in the country. Throughout most of that time we have held on to that distinction as we have consistently been at the front of the market, as evidenced by winning every major award available for Angel groups in Australia.
From the outset I chose a model for Melbourne Angels based on:
- a culture of mutual respect and consideration for each other, for founders and for everyone else; and
- a habit of collaboration and a principle of collective effort.
Our group was always meant to be and has always been one that is welcoming to everyone on the basis of shared values of inclusion, integrity and an alignment of interests.
When we started, there was very little in the way of a mainstream start-up ecosystem. Melbourne Angels was among the very first Angel groups in Australia. The only successful venture capital firms in the country were the small players, like the one I co-founded, and most of those were unable to secure second funds despite their success (why is a story for another day). I wanted an organised Angel community, a national community of Angel groups, because I knew that we would do much better than the institutional world of venture capital was doing at that time.
The last five years has seen the rapid mainstreaming of the start-up phenomenon with the accompanying entry of government funded start-up agencies and a flood of profit-seeking service providers. For over a decade I was the primary voice of the start-up investment community to industry, governments and internationally. With the advent of the new wave there arrived a lot of folks naïve about start-ups and start-up investment, convinced of the primacy of what they thought they understood to be the Silicon Valley model. A combination of this ill-informed starting point with a more political-favour driven environment and the distorting self-interest of seeking a profit from the transactions of start-up formation and investment all mitigate against learning from existing experience.
Add to the mix accelerators, incubators, venture catalysts, co-working spaces, venture studios, venture partners, family offices and so many more attracted to the rhetoric of entrepreneurship and start-up mania with the lure of the unicorn. It is no wonder that today we face a very noisy, confused, fragmented and politicised start-up ecosystem where collaboration is largely forgone in favour of competition. Yet, the leadership team at Melbourne Angels has persisted in keeping our group relevant, agile and effective. As with the companies in which we invest, we recognise the importance of being vigilant, of understanding the rapidly changing environment within which we exist and adapting to the accelerating pace of change.
I have lived my entire life in a fast-paced world, influenced, or driven by the evolution of electronics-based technologies. I made it my profession and thrived on finding ever more dynamic environments, including being a start-up founder in Silicon Valley at the peak of its heyday late last century. It was that experience, including learning first-hand about venture capital from some of the legendary practitioners, which inspired me to join the investor side of the table.
‘Changing the world for the better’ is the core motivation that has moved me throughout my life. That same phrase was the central focus of the top venture capitalists in Silicon Valley. Having founded over 20 ventures of all sorts in my life, it was that alignment of sentiment which inspired me to start investing. Angel investing has been my path to finding like-minded people who share values and aspirations. Melbourne Angels is about stepping up, alongside the founders to be part of the solution, to help make the success.
Now I am stepping aside from the Presidency of Melbourne Angels. Not as a resignation or retirement but, as an essential next step in realising my vision for Melbourne Angels. For the group to continue to be a leading example of how to build a great future for our country through smart, ethical and passionate support for our most innovative and creative people.