Why I Quit Angel Investing
In 2015 I was frustrated by the arrogance of science in my industry, life sciences, and the lack of appreciation for data and technology, essentially my entire value proposition, and started searching for my next big thing.
Stu, a friend of mine and fellow helictoper pilot, suggested I get into angel investing and introduced me to Sand Hill Angels in April of that year. At the very first meeting when early stage founders pitched to the group of us accredited investors, I knew that I wanted to be a part of it and jumped right in.
I committed to investing a minimum of $25,000 per year and told my husband that I would give it two years and $55,000. I considered it my real life PhD.
In September, I attended my first meetings as a member and went against general angel investing advice by making my first investment into a company called myHealthteam. I was convinced by the CEO Eric Peacock to invest in his company during my very first meeting. After being in life sciences for two decades, I knew that he and his co-founder Mary Ray (and team) were filling a gap and that they were the ones to fill it.
In November, I made my second investment into Sandstone Diagnostics (acquired by Labcorp) and in January 2016, my third into Zum.
By April, I’d invested in TomboyX and realized that my investment thesis revolved around investing in startups that improved people’s lives.
I had quickly joined multiple committees including the life sciences special interest group (SIG), because of my experience in life sciences, and my interest in the space. I went to demo days put on by accelerators and participated in due diligence calls to learn as much as I could, as quickly as possible.
I wanted to be an educated investor and there’s really no way to learn how to be a good angel investor other than to do it. I listened to podcasts and read anything I could get my hands on. (I documented a lot of this in my blog on So You Want to Be an Angel Invesor)
In becoming a good angel investor, the learning curve is steep and there are a lot of variables.
By July 2016, I was on the Board of Sand Hill Angels and quickly exceeded my $55,000 budget. I’d doubled down on two of my investments in addition to making a few new investments. At the time, my average check size was $10,000.
I also realized that most of the angel investors and VC’s were men. I was often one of the only women in the room, with many people assuming I was someone’s wife or one of the staff. Only when I told them I was a commercially rated helicopter pilot did I get their attention. My table stakes as a woman investor (over the age of 40) were too high.
By August 2017, after a year on the Board, I realized that Sand Hill Angels was not for me. There was a serious misalignment of values between how I wanted to operate as an investor and the behavior of others in the group. In retrospect, it was an abusive experience.
I also realized that as a woman investor, I was expected to build the ecosystem to make it friendler to the non-cis-het-white men who made up the majority of the investors. These investors were making the decisions on what got funded, and therefore had too much control over what existed for the rest of us in society. They still do.
So I became vocal. I launched a podcast called Piloting Your Life to show what was possible to those who needed to see it, to be it.
I challenged event organizers on making events more women friendly, having more women on stage to provide different perspectives, and checked men’s (and white women’s) privilege.
The podcast quickly evolved into a season on women investors, women founders who had raised Series A and beyond, and others who supported the ecosystem. I wanted more women to become investors so we could influence what got funded.
95% of the world was designed by and for men and it was time we had our say.
During my first two years, I operated as an angel investor between 30–50 hours a week. I would attend multiple events in a day, review hundreds of pitch decks, research, make introductions, and give feedback on pitch presentations. I even wrote an article on what I looked for in a pitch.
My men investor colleagues sent me the startups with women founders without considering them for investment or offering them assistance.
Women founders expected that I would work with them, for free, to help them get funding and if I said no, they told me I didn’t support women.
It was exhausting, relentless, and for the most part, thankless. I got burned out and I still haven’t fully recovered.
I gave away far too much of my time in a way that my men counterparts weren’t expected to. I knew I wasn’t the only woman experiencing this and in 2019, I wrote a blog post called There Has to Be a Better Way: Changing the World as a Female Investor.
After leaving Sand Hill Angels, I tried to participate in, and create, small communities of women investors so that we could band together to not only reduce the workload, but through greater numbers, have greater influence.
This didn’t work out as well as I’d hoped and after a few failed attempts at various models, I gave up trying to bring women investors together.
Then in March of 2020, the world came to a screeching halt and I knew that the founders with startups working on things that I wanted to see in the world were in for a world of hurt. I wrote about this in a blog post called Are Early Stage Investors Investing?
What I most feared for these founders came true. Investors became less risk tolerant and the money tightened up.
That year, my focus was on my family. With no in-person events, my exposure to new deals decreased significantly. I was still getting pitches in my inbox and later in the year, accelerators and event organizers figured out how to do virtual events which, while not ideal, I think many of us were grateful for the opportunity to efficiently see more startups.
Similar to other investors with companies in their portfolio, my goal was to help my existing portcos survive. Because most of them had women founding teams, they had to get very creative very quickly. And they did.
Which leads me to today, and why I am quitting angel investing.
While there is plenty of dry powder out there with VCs raising funds the size of which make my chin drop, we saw a serious slowdown in investing in 2022. Investors were spooked by interest rate hikes, looming recession, the war in Ukraine, and general political unrest here in the US.
And then we had the SVB debacle. If there was any risk tolerance left at the end of 2022, it completely disappeared last month (in March).
With the collapse of SVB, we didn’t just lose a bank; we lost a critical piece of the startup ecosystem.
I agree with many who have opined on this and that we won’t soon recover from the loss in the startup world. (Pitchbook released data this week that “VCs invested $46.3B in North American startups in Q1/2023 [which] is 46% lower than the same period a year ago.”)
So the founders that did crazy, innovative things to make it through the Covid shutdown, who were nearly out of money and ideas at the end of 2022, now have what I see as an almost insurmountable hurdle to accessing capital.
My checkbook, with an average check size of $15,000-$25,000, can’t make a difference right now. As a solo angel investor unaffiliated with any groups or instituitions, my platform isn’t big enough to influence and change the startup ecosystem.
I was the change I wanted to see, and I know I made a difference, but it’s time for others to pick up the torch.
While I absolutely love learning about new innovation and I loved helping startup founders (in moderation), I am out of gas. Just as Jacinda Ardern, former Prime Minister of New Zealand, said when she resigned, there’s not enough left in the tank.
Last year I made a few bad investment decisions. My husband reminds me that I learned a lot from them but I still feel like an idiot. I was hasty and didn’t do appropriate due diligence which I’ve frequently advised others on and even wrote about in Angel Investing: Due Diligence (Digging in with Investors).
I relied on my heart and not the data.
It takes a lot of time to stay current to make good investment decisions and I am no longer interested or motivated to put in the necessary time.
Regardless, I feel good about what I learned, what I invested in, and my contributions to the startup ecosystem as a vocal woman investor interested in expanding the power and influence of women, and improving people’s lives.
Over the last seven and a half years, I :
— Invested nearly $300,000 in 21 different companies ranging from pre-seed to seed, to Series A, and even Series B.
— Had one exit where I got my money back, one exit that is continuing to pay out due to the nature of the buyout, and one that I wrote off last month.
— 19 of my investments are still in play with one doing incredibly well. Unfortunately I expect a few to fail this year for reasons I spoke about earlier in this post. (Some would say that either I got very lucky or I didn’t take enough risk to have had so few failures at this point)
— Launched a podcast, started blogging, wrote and self-published the book Piloting Your Life, and launched a YouTube channel.
—Went to Slush in Helsinki twice to meet founders and investors in the Nordics to expand my world view.
—Participated in and/or moderated panels on world stages in places like Helsinki, Barcelona, and Berlin, and quite a few closer to home.
— Went on a solo investor trip to Paris, Estonia, Nice, and Berlin in 2018 to reduce my myopia as a Silicon Valley investor and native Californian.
—Was an advisor to startups for PanaceaStars in the UK.
— Considered and subsequently rejected the idea of starting my own VC fund, Class Bravo Ventures.
— Spent a year as an entrepreneur in residence (EIR) for Tech Futures Group.
— Was a Board Observer for one of my portfolio companies (SendaRide) based in Okalahoma City for four years.
— Went to Necker Island twice and played tennis with Richard Branson while there (in addition to other activities and interactions).
— Reviewed countless pitch decks, gave feedback and made recommendations to founders, and made innumerable introductions for underserved founders.
So What’s Next?
I will be forever grateful for the opportunity to be an angel investor in Silicon Valley. I found my voice. I found a broader purpose. I met amazing people around the world (and pissed off more than my fair share). I invested in some great startups that I expect will make me some money at some point.
I know I made a difference.
Now it’s time to focus on the second half of my life (the next fifty years) and find ways to more quickly bring technology and innovation into life sciences.
Life sciences, and the resistance to technology, drove me into angel investing. I have come full circle but the circle has expanded so it’s not the same as eight years ago.
Between the Covid shutdowns and the advancement in technology (AI, digital health, ML) and the changing regulatory and economic landscape, life sciences companies can no longer ignore technology as a critical value-added, business enabler.
And as an experienced life sciences consultant and former angel invstor, I am ready for it.
About the Author
Terri Hanson Mead is the multi-award winning author of Piloting Your Life, Managing Partner of Solutions2Projects, LLC, and an advocate for women through all of her platforms including YouTube, Instagram, TikTok, and her blog. Terri, the mother of two college aged kids, is based in Redwood City, CA and in her spare time, loves to travel, cook, play tennis, spend time with her husband Zeke and her empty nest puppy George, and fly helicopters around the San Francisco Bay Area, especially under the Golden Gate Bridge.
