Angel Investor
Fay Wells is a tech and media exec, Angel investor, and VC in Residence at Techstars. She excels in business development, partnerships, and growth for startups.
I actually started in the sports and media and entertainment realm. I did a master's in sports management, and then went on to do an MBA. I really wanted to have this very well rounded qual and quant background focusing on business.
At the same time, I wanted to do something that I love, which was in that sports realm. I started out in sports, did some work for the NBA, did some work for nonprofit research, did some great work for some companies like Disney and ESPN, the US tennis Association, Netflix, and then started shifting more into the tech and VC world. Started doing some things in a venture with Technicolor and then continuing on in tech, spent some time at Uber, Amazon, Meta. So it was building up this experience in tech, and at some point I started angel investing right after George Floyd's murder.
I was thinking, how do I help startup founders? How do I help grow the ecosystem and make more of a difference? So started volunteering as a Techstars mentor. And as I got more interested investing in the broader, longer term impact, started doing more angel investing on my own and became an LP in a couple of funds.
When I started investing, I was thinking about investing in areas where I had a lot of personal expertise. So, from my time at Netflix, at Meta, or at Disney, I was very focused on consumer meeting entertainment in places where I could add value, which I still am focused on. But then I've also expanded to think about other problems that have a large impact on society and on people at scale. I've expanded my thesis to include health and wellness, cyber and climate. So it's not just narrowly focused in this space that I originally had, but it's thinking about this other broader piece.
To dive deeper a little bit, some other pieces of the framework that I think about is what is the opportunity for scale? Are the founders solving a really big problem? Does it help underrepresented founders or disadvantaged communities or places where people haven't had significant resources and opportunities? Does it help level some kind of playing field? Is it generally ethical? I obviously want to make a return, but my whole purpose of investing is not just to make money. So I think about that as an investing lens.
And then I think about the founders themselves. The amount of passion that they've put into it, the amount of grit they put into it. What's the team behind it? So there's always going to be some technical expertise, but also some general business expertise and people who are willing to put in a lot of work and a lot of effort, but are also complimentary to each other in some of those spaces.
Being a solo founder is obviously really tough. You may not necessarily have a thought partner you work with, you may have been working on this idea for a very long time. And if something goes a little sideways, a lot of that is on you. That said, I know solo founders had a lot of determination, a lot of grit, and I have personally backed solo founders.
It depends on the experience, how long the solo founder has been working on this problem, thinking about this problem. Have they pivoted? If you have a good team of others around you. So what are your strategic advisors look like? What is your trusted board look like? What are those other resources that you can lean on for thought partners for people to work with? That is going to be really critical.
On the other side, multiple founders. There's the benefit of having a thought partner. You might have as somebody who is great technically, somebody who is great at partnerships, somebody who's great at selling. There's also a tremendous amount of complexity. Everything from decision making to where you want the product to go to how you're thinking about the culture. Those things are obviously much more challenging when you have multiple folks. I also have seen solo founders start solo, and then as they build their product a little further, they add additional founders.
The other thing to think about as a solo founder is a lot of what VCs are looking on and betting on, particularly at early stages is team. If you have a team of multiple people, you're sometimes a lot more likely to get investment.
I'm thinking of one particular company that pivoted from offering a broad variety of products and services to being really focused on one. It was driven by research that they got from the market, just in terms of what customers were more interested in. It was also driven by resources. Particularly early stages. They couldn't successfully do like these 3 products well for everyone.
And so they pivoted in narrowing their focus, hyper serving on that community and they did it. They were able to grow sales more quickly. They were able to dive deeper with their customer base more quickly. And they were able to tweak their product to better service and have more features for just this one customer set versus having these three different products.
First of all, I think the chance to work so closely with founders, founders are so incredible, so phenomenal. I have this problem that I'm going to solve. It's going to be industry changing. It's going to be life changing. I'm basically going to dedicate myself to doing that. That is no small feat, that takes no small amount of bravery, energy. So that is incredibly inspiring to me, I take some of that energy and passion myself.
I love the ability to take some of the knowledge that I've had, whether it's working for pre funded startups to working at an Amazon or Meta and being able to take all of that knowledge and then whether it's across go to market, pricing strategy, partnerships, and help help a founder grow something. On the other side, because you are literally starting from nothing, you give me ideas and things that I can take back to some of these larger companies, which is just incredibly phenomenal. It's very much a mutual exchange.
Typically, where you start is not going to be where you end. You don't want to alter this idea so much, even if you're getting feedback from customer discovery, from the market that you should. So one thing I would say is just try not to be so in love that you are not willing to pivot early enough.
And then another thing I would encourage early stage founders to think about is to be really thoughtful about how you can improve your communications. This is something that everyone struggles with because I know you're incredibly busy. Be very intentional about what you're communicating, expectations you're setting, and being honest about when you fail and when and how you can do better. If you have a communication miss, just be like, you know what? My bad. I'm sorry. Let's reset this and move forward. It helps you continue relationships.
I may not have the best answer here because I am not the best at this. As somebody who is so incredibly passionate about it, there's a lot of times that I will take the time. For example, if someone is a founder who is referred to me by another founder or who does some thoughtful outreach on LinkedIn, I will take a meeting and have a conversation. I will review a pitch deck. I always have a section of time divided for founders. Because it is such an important part of my life, I just kind of weave it in.
You feel connected to every deal, but you can't feel so personally invested in every deal. And that's because you never know if it's going to be a success. You don't know if a founder that you've invested in is going to ghost you. You have no idea how much they're going to want your help or need your help after you've given a check. So one of the things for me candidly is maintaining a chat, that appropriate level of connection, but without feeling so personally in my heart and soul into every investment that I have. Secondarily, I think is just the volume of deals and ways that you can invest. You can do direct, you can be an LP, you can do SPVs. There are so many things. Trying to figure out the right allocation of what you want to do is helpful. And then the third challenge that I would call out is being true to what you want to do and not getting sucked into whatever is the hot deal or whatever is the hot sector industry or flavor of the moment. Being a good VC and being a good investor is knowing that you have to be flexible but you can't have shiny object syndrome.
What is the problem that the founder is really trying to solve here,? How big is that market? Is there a validated demand for this? Have you done any customer discovery? Have you talked to folks about this? The road is exciting, but it is really difficult. If you go out and get ready to have these fundraising questions and you talk to a hundred people and they say, no, are you still willing to then continue to have that conversation?
You have to be willing to persisting and moving around and then what happens if you don't get fundraising? Are you prepared to still move forward and continue to build the product, continue to work on your service or work on your problem?
You're going to have to have proof of some beta, prove out some kind of traction. And then what's the story that you can tell around the progress that you've made in the last six months? If you're pre revenue, that could be user growth. That could be how the product is pivoted. That could be how you've grown the team. That could be how you've changed, your thought processing, what you're doing. You need to have all of those things in mind, because when you talk to investors, they're going to ask you very pointed questions.
And to be fair, they don't have to be perfect. You don't have to know everything. But if you haven't thought about these, there might be some chatter in the background that is going to actually make it more harmful for you as you're starting to fundraise.
Think about what are all the digital platforms that you can use to connect to people that are not close to you? Previously, a lot of people found funding from DMing people on X, when it was formerly Twitter. You probably know who your competitors are. So do some research, look at PitchBook, look at CrunchBase, look at the companies that are similar or companies that you want to disrupt and look at their investors and reach out to them that way.
As you think about building your network, you ideally want to start before you actually need to fundraise. Start having conversations and doing outreach now and approach it from a thought leadership perspective. If you never got money from this person, is there anything that you have that could help them further their business? And just to be clear, you don't want to give them free information or anything like that, but what you want to show them is they're missing something by not having a conversation with you, by not investing in something with you in the future.
As you continue to build that relationship with them, when you get ready to fundraise 6 months, 8 months down the road, you will have had that connection. You will have already started to demonstrate you have value. You know what you're doing. You know why this is a space and why they should be investing with you.
And then lastly, founders are incredible and you can also be incredible resources to each other. Talk to other founders who have been in similar situations that maybe had a similar struggle with raising or figure out a way to be helpful with each other and give each other recommendations on potential founders or ways to grow. Someone can be comfortable giving you a warm intro to an investor. And particularly that will help as it comes from a trusted source.
Accelerators are a great program. If you think about what Techstars does or what an accelerator does, you come in and you get advice and have access to hundreds of mentors and people that are experts on everything from finance, go to market, partnerships, operations. You get all of that in a very condensed amount of time. You also get help with how you're revising your story, ultimately how you fundraise, how do you think about building your product. In the equivalent of 12 weeks, you were getting an acceleration of your business from executives and product experts and former entrepreneurs. In order for that to be beneficial to you, you have to be at a certain stage in your company. Ultimately you're also getting ready to raise additional money to be able to scale.
No, you don't need an MBA to get into VC. An MBA gives you network access. So that is one of the biggest benefits there. So, how does one get into VC? There is the traditional VC path of people who are investment bankers or people who started through their family or through connections, right out of undergrad. The way that worked my way in was helping founders from a skills perspective, from a resources perspective, and then from an actual monetary perspective. If you have a passion, it's possible to break in.
One of the things about angel investing is that you always have to think of is if this money goes to nothing, can I afford it? I would encourage people to think about what do you want to get out of this investment? Is it you want to learn more about startups? Do you want to build a track record? When you're investing in early stage startups, that is where it is the riskiest and where you don't know where this is going to go. If your focus as an investor is a higher level of return, I would encourage you to focus on later stage startups, more established SPVs, like alumni ventures funds.
First of all, I know that there are a number of companies and funds that are actually holding space for people of color, and they don't necessarily advertise this. You learn about it as you start probing and asking folks in your network. And then also, the cap table coalition is focused particularly on getting additional people of color through an SPV that they run across different deals. It is a lot of digging around, asking friends, asking resources, there has been a lot of growth and efforts in that area.
What is the problem that you're trying to solve? Why are you trying to solve this problem? Is this something that you see a big opportunity for impact for others? Is there a demand for it? Where you see this market or this problem in the next five years? You can't always see five years out, but can you see this problem you're solving or can you see this service that you're proposing existing in five years?
The other thing that I would share is, this is an amazingly rewarding, phenomenal journey that you're going on, but if you go on this journey for 10 years and you don't make a lot of money, are you going to be comfortable? If you still feel you have that passion and that joy, a hundred percent move forward.
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