This month, the beautiful Hotel de Mérode was the location of a packed real-life event in the heart of Brussels, the celebration of 20 years of existence, development, and success of BeAngels. The network’s CEO, Claire Munck has been at its helm for a decade, and has helped the network to transform from a traditional angel network to an innovative and thriving hybrid finance organization. Read on to discover how she achieved this successful balancing act.
The Key to Success
“In 20 years, we have evolved from a traditional angel network to what we could refer to as a “hybrid finance organization”: a mix between a community of angels, who know and like to meet each other, and a digitally driven organization that supports a range of investment products.
The platform helps us industrialize our back office. We are able to onboard higher number of investments, deals, and transactions thanks to it. For our investors active in investment vehicles, they have access to their start-up portfolio at any time; it is a perfect place to also keep receiving company updates, to follow-up on new investments and re-investments.
The digital side cannot substitute meeting entrepreneurs in flesh, and to share ideas, opportunities and issues with portfolio companies with fellow investors.
Both are needed and inseparable. We can grow our community of angel investors because we increase the quality and quantity of our investment products. This is the key to the success.”
Growing out of a Need
“We have always been inspired by different developments in Europe, which we received through participating in associations like the BAE Club. Most of our investment products have been inspired by good practices in other countries, adapted to our local environment.
Other drivers of our development are the changing profile of angel investors. Therefore, we try to cater to a more diverse group of investors, with different needs, from different backgrounds.
That’s why we actually developed these products, to involve people who were more active. They were asking for more training, more syndication, more support.
We have worked in the last decade to create a mix of products that fit different profiles, but also catered to companies’ needs. This requires time.
For example, over the years we observed how seed investing became easier for startups. We also saw how larger and larger VCs were moving further along the supply chain. They increasingly demanded from startups to have strong recurring revenues, well balanced teams and a product-market fit.
Therefore, we set up the Scalefund I in 2017 to help startup reach their next milestone, until they had a sufficient level of growth as to raise financing from VCs or become interesting for a corporate acquisition (cf: Musimap acquired by Utopia this week).”
Keeping your Eye on the Dealflow
“Great deal flow is crucial to any angel investor network success. Historically, we have always been connected to incubators, accelerators and the like, which have significantly increased and professionalized in recent years. We remain pro-active and seek to be top-of-mind for all entrepreneurs raising early stage financing in Belgium.
Our job as a platform and intermediary is to find good teams that have high growth projects that are suitable for angel investing. This expertise has lead us to be the reference financing partner for a number of organizations, such as the WEare founders programme supported by Google.
Moving to the BeCentral digital campus in central Brussels and operating the angel hub there also helped angel investing to become more visible as a financing source.”
Dreaming about Exits
“When you are running an angel group, you have the same initial enthusiasm as your angel investors, everybody talks about exits in 5-7 years. And then… you quickly lose your first deals, and then you start losing money. And then there is this transition phase where nothing happens, or at least not fast enough.
You start having doubts that this works. And although the more experienced angels say you have to be patient, that good things take time, it still feels like a mirage. You are in the middle of the desert, and there is nothing there.
That is the challenge of our “patient capital” industry, full investment cycles take time.
And now we see the results of what we set up over last 10 years.
We select better companies, recruit better trained angels, and now have angels who have nice exits and are reinvesting in new companies. They believe again and so do we! At BeAngels we are now in this virtuous cycle, when our products have reached maturity in parallel with a stronger entrepreneurial and investment ecosystem. We have had 6 exits these years.
It looks like our IRR is increasing year after year, because we keep getting better at what we do.
We keep on professionalizing as an organization, while contributing to supporting the economy.
The Future of Angel Investing
“Things are moving faster and faster. There is increasing competition. introducing digital tools in what we do thus remains inevitable.
The challenge is for angel investing is to stay true to it nature, while at the same time evolving.
BeAngels’ angels are happy to see each other every month, to meet in person with entrepreneur, to find new adventures, learn about new business models. This is what inspires them. Otherwise, it would feel like they’re just diversifying your portfolio.
We need to keep explaining the value of angels, the value of the advice they can give entrepreneurs, the smart money that helps you overcome the first 3 to 5 years until they are ready for the next growth phase.
We need to keep convincing people with our image and track record and professionalism. It is a responsibility of our angel groups to be not too shy about our results and be transparent to grow our market.”