What? Club degli Investitori is one of the main business angel networks in Italy and it’s based in Turin.
Who? More than 180 angels with almost 20 millions invested in more than 30 companies.
Since When? First started in 2010.
Hi Giancarlo, so how did you start angel investing?
I am an engineer and entrepreneur, I worked from a young age to build my company Euphon, which I led for twenty years before listing the company in the year 2000 on the Italian stock exchange. After that, I completely my exit selling the company to a private equity fund in 2005.
At first instance I started to invest into the renewable energy sector, which was growing in the years around 2008 thanks to government contributions. However, I felt the renewable sector was not as exciting as the industry I built my own company in, which is media.
At that point I decided I wanted to support new entrepreneurs and to become a business angel investor together with two other friends, working closely with the Politecnico di Torino, my former University.
From that group of 3 friends we grew into a network of 180 angel investors in 10 years.
Of that group of 3, why where you the one to take the lead?
Because I had the first idea to start! During a trip to the United States in 2008 I came across a group of Angels in San Francisco, called Band of Angels. Back in Torino I started the same idea. I studied their model and I brought it here in Italy.
What was their model?
Meeting with entrepreneurs at a restaurant during lunch or dinner time. As we started with 3 or 4 friends this gave us the opportunity to take time with the entrepreneurs and see them outside of work hours.
In the beginnings, it was very informal and we did only few investments. After a couple of years, we decided to register as an association: when we were about 5 or 6 investors, we founded Club degli Investitori.
Up to 50 members, we remained with the same format - meeting entrepreneurs at dinner time. I would say that the first 4 or 5 years of the association really was a searching process.
We are now here for 10 years which is a long period of time! You must consider this: in this decade we invested almost up to €20 million euro. 90% of these investments were made the last 5 years. We really started to grow as soon we decided to hire a team and to work more and more professionally on angel investing.
What were other facets that contributed to that sudden growth? What did you envision this critical mass being when you started? And what turned out to be the turning point looking back?
We started the Club focussing on Turin-area only. At the time there was only one incubator here, with some 20 to 30 startups created per year. There was no way we could build a large network at that moment.
In fact, our growth as a network was caused by a large degree because of the maturing ecosystem around us. In the last 5 years we really saw significant growth in the number of VC’s and incubators in Italy. When we started, we only had only 3 to 4 VC’s and 2 or 3 incubators in the region.
Where there also changes you made yourself, in your network, that contributed to the growth of the network?
As said, we invested in our team, hiring employees. Furthermore, I decided to work more for the network myself, up to 4 days per week – and my work as President is all non-paid, I am an investor too.
We started to make more connections, connecting with more people. We always focussed on having real entrepreneurs joining the Club, not only consultants. With these top entrepreneurs in the Club, growing really was not difficult.
Finally, we also grew outside our city and region. We started looking around Italy and are making investments in neighbouring countries like Switzerland. In the last 10 months, we completed the first two international investments, one in Switzerland and this month we made our first investment in the United States.
You see, it’s an ongoing process and things don’t happen overnight: for the first five years we iterated the model, then we grew the members base and now we’re investing also cross-border.
Your club also regularly does extensive Study Visits, to Silicon Valley and Israel, for example. What is the value you see in doing these trips?
We want to make international connections for many reasons. In our survey we have done with our members we found that many of our members are interested in investing outside of Italy. In order to learn we are looking for other networks like us.
A lot of people in Torino are interested in becoming business angels. We take them on these trips to meet seasoned angels and learn from hands-on experiences
On this trip we are also look for new members to join the Club. We have been successful: now we have 2 members in San Francisco, 4 members in London, and more coming from other parts in Italy.
Torino is our homeland, but we’re growing Club degli Investitori into a network that span across different locations thanks to its members.
Back to the success of your angel investor network. Could you elaborate more on what you think are important ingredients of that success?
I believe our members and the entrepreneurs have trust in me because I am an entrepreneur. There are many entrepreneurs in the association. Startups come to us because they are entrepreneurs like us. We speak the same language.
Secondly, we are not only an association where people come to invest. People come to us to learn. We give our members many opportunities to improve their know-how and to understand trends in technology. With our team, we organize do not only investing events, but also academies, workshops, business trips.
Third, we are very well connected with companies and institutional bodies in our country. For example, we are very close to the Association of Industrialist and close to banks.
Together we try to support innovation. This also gives us access to many important decision makers. They are proud to be connected to our association. We are also very happy to be sponsored, for example by UniCredit and by KPMG Italy.
How do you combine the social aspect of your association with the business side?
We are much more than a group that meets monthly to look at startup presentations. Again, the reason for this is because we have so many entrepreneurs that are part of our group. More and more, we have young entrepreneurs joining us as well.
Normally, on average, we see that 90% of our members are investing in companies. If you don’t invest, you have to leave at a certain point.
Does the club have strict rules surrounding the need for investing my its members?
There are no strict rules. People who do not invest leave at some point. We have a churn of about 5 to 7% a year, so they are substituted. I also think that people see that I as President do not take any salary. I do this for free. That is something has created a lot of trust. Trust towards the team. This trust is very important, it’s an asset.
Club degli Investitori just held a big survey after a decade of existence. Which takeaways did you find interesting?
One of questions was “what kind of return on investment are you looking for”. My fear was that they may wanted to look for very big returns on the short term. This proved not to be true.
In their answers, most members said they are actively looking forward to this, but on the long term: 7–8–10 years. Furthermore, they think a 10% return is realistic. They are very aware that there is a lot of risk attached to angel investing.
Secondly, we see that our members are pushing us to involve them more.
We are doing a good work in organising the amount of events we did. But they want more: more academies, more learning and above all more involvement with startups that are looking for support.
This fits us well. Many entrepreneurs come to pitch to us because they want to see specific members, who they can see on our website.
How would you like to see the network improve in 5 years?
First, we want to grow our membership about 10% a year. Maybe have 220 to 240 members in 2023. However, we don’t want to expand too much, too fast, either.
Secondly, we want to accelerate the process of investment. There is a risk when we grow bigger in numbers, our processes slow down. We will not be able to grab opportunities.
To be faster in selecting the companies, we want to create groups specialized in different sectors: e.g. a Life Science club, a Digital club, etc. We also want to make a made in Italy club, to support those companies which are in industries Italy excel in: fashion, engineering/automotive, food.
What are your preferred sources of knowledge and insight? What should we read and who should we follow on angel investing/entrepreneurship/tech trends?
But the best way for me to learn about these topics is to meet founders: even though I lead the Club I spend a lot of time attending presentations and discussing with innovative entrepreneurs. I have been meeting thousands of them for the last 10 years.
Finally, which of your startups in your portfolio is ready to scale in Europe (which one would you like to put in the spotlight)?
- Satispay, that is the most important fintech company in Italy, more than 1 million clients and ready to scale in Europe.
- Supermercato24: the most important grocery delivery company In Italy. It has acquired recently a polish company and it is now an European scale up.