In this series, we ask investors from all walks of life to chat about what it was like to make their first ever investment. For a bit of a different spin on traditional investing, we spoke to Trevor Dickinson about the transition from successful businessman to Angel investor.
Angel on my shoulder
Angel investor Trevor Dickinson’s first investment didn’t exactly take flight. In fact, the second and third also failed to soar—but that hasn’t stopped his passion for entrepreneurial ideas and unique business opportunities.
As an Angel investor, Trevor provides financial support for startup companies through the difficult early stages of development.
“Some people get into Angel Investing to make money, some to bring innovative business to New Zealand and support the entrepreneur—no matter if the start-up fails,” he says.
“I do it to work with smart people who are young, bright, enthusiastic and have great ideas.”
UK native Trevor became an “angel” after falling in love with New Zealand and relocating to the world’s coolest little capital in 2011.
A geologist by trade, Trevor knows a thing or two about hard work and success having invested, built and sold his own companies over the years.
Once in Wellington he joined investor group Angel HQ and was soon hooked. The angel investment game is a fantastic adventure, but like anything, carries its own set of risks.
“You don’t become in angel investor unless you are prepared to lose money,” he says.
Trevor tells us about his intriguing investment journey. And why he’s excited about what Sharesies has to offer New Zealanders.
What is Angel Investing and how did you get into it?
An angel investor invests in start-ups or entrepreneurs, either providing a one-off payment or ongoing support through those tough, early stages.
I didn’t know a thing about angel investing until my banking advisor at BNZ suggested I come along to an Angel HQ meeting. I had never invested in anyone else’s business before so it was a big learning curve. It is risky but I rely on my co-angels to help make good choices.
We all have different backgrounds and experiences which really helps when choosing solid investment opportunities. Having said that it’s still very difficult to pick winners.
Have you made other investments in the past?
I went through all kinds of outlets—when I was in business, we started a scheme where my friends and colleagues got together and invested.
In the UK, there’s a lot more flexibility with pension funds—we maxed those out to invest in shares, property etc—it was a backstop for us. But I never liked the fact that it was so complex and so hard to read the stock markets.
Sharesies is finally democratising that process so more people can save a portion of their pay for shares and earn money on that investment over time.
What was your first ever angel investment? How did it go?
The first three investments didn’t gain as much traction as planned. In fact, despite some early promise, they all eventually failed… but I learned a lot from that process.
Kiwi Semiconductor [a semiconductor manufacturing facility] was my first; I also invested in BigLittleBang—an online virtual world for children aged 5–12 and MiniMonos, another online virtual world, mainly aimed at young boys. My fourth was Green Button, a cloud computing platform that was successfully sold to Microsoft.
How is angel investing different from other forms of investment?
Angel investing soaks up money and the angel’s time and energy.
We angels bring passion, enthusiasm, experience and our time and effort to help businesses grow. However, we also must remember to allow the owner to develop their ability and skills along the way.
The average American angel is a white male in their 50s or older—but you need a diverse range of ages, backgrounds and sexes to make sure you see the opportunities.
Baby boomers have a very different outlook on life to say, millennials, who have grown up in the internet age and want to be connected 24/7.
“Who would have thought that Facebook and Google would be major international businesses? Let alone Snapchat, which is valued at $25 billion and has never made a profit.”
So we angels need to keep learning in an attempt to understand and anticipate new business opportunities and developing trends.
What would you do differently when starting out as an angel investor, if anything?
I put too much money into the first few investments. I probably still invest too much ;-) but now I rely on the collective knowledge of my fellow angels.
If enough angels are keen on a particular deal, I try to back it, we all have our different areas of knowledge and it’s important to have faith in that.
In general, what do you like about having an investment, why should people try it?
I think investing is something people should get into from an early age. Even if you can start investing $10 or $20 per month it should turn into something much bigger over time.
It’s about spreading your investments—many people don’t look ahead to what happens later in life, but the earlier you start the better. You’ll be surprised how quickly the funds will grow.
People often think you need loads of cash to invest. What do you think about this?
I think for most Kiwis, the main investment and asset, other than their car, is a house. Property is seen as an investment that you buy and sell down the track when you retire and downsize.
I think there are many other ways to invest that offer more flexibility. When spread over time, shares are smart and offer much less risk.
I think shares have long been seen as a businessman’s domain, but Sharesies allows you to buy a share of the shares, which makes it far more accessible (and a lot less risky that angel investing is new startups! ;-))
What is the best piece of advice you have given (or been given) about investing?
Investing needs to be digestible for people. My advice is start with bite-sized chunks of money at a young age and it will grow over time.
Thanks, Trevor! 🙌
If you (or you know of anyone) who has an interesting investing story to tell. Or there is a particular part of investing you’d like to hear about—let us know.