π Angel interview #10: Ashley Flucas
"If I read about something that was interesting, I might reach out to the founder. You'll be surprised by the number of founders that respond and are interested in talking to you."
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Ashley is the general counsel at a real estate fund, an active angel investor, and syndicate lead with Flucas Ventures. Since she started angel investing two years ago, she has participated in more than 100 deals through AngelList and through direct investments (here's her portfolio). She is based in West Palm Beach, Florida.
Can you give a quick introduction of yourself?
I'm a lawyer by background. By day, I'm a general counsel for a real estate finance fund with about $3 billion of assets under management. In my free time, I run Flucas Ventures, an angel investing syndicate and I'm obsessed with startups and angel investing.
When did you start angel investing and how did you first hear about it?
I started about two years ago. This was around late Q3/Q4 of 2018. I finally had some disposable income to look into this asset class. I was reading about the crop of companies coming out of the last recession that are now household names. I thought to myself, I want a piece of that action, it seems exciting. I was intrigued by the opportunity for asymmetric upside.
I'm fairly young with respect to investing. I figure if I make some mistakes, break some eggs, I still have some time to correct that down the road. I wanted to know more about this space but didn't know how to get started because I'm located in South Florida, which is an oasis of capital in terms of private wealth, but a desert of deals and not really on the radar (yet) from a VC perspective.
I literally googled, just reading about angel investing, reading about different platforms, going on my LinkedIn, seeing if anyone was doing anything in the space, and I reached out to get some mentorship and establish connections.
The number one tool for me getting started was the AngelList platform. I cut my teeth on different deals in a good environment with high-quality deals and good co-investors. I started that way and quickly became addicted to it. That led to me joining some angel groups, meeting folks who were doing deals off the platform, and forming relationships with accelerators and eventually lead to going directly after deals. Now that's evolved into my syndicate.
I literally googled, just reading about angel investing, reading about different platforms, going on my LinkedIn, seeing if anyone was doing anything interesting in the space and reaching out to get some mentorship and connections.
Do you remember what was your first angel investment?
The very first one was on a platform called SeedInvest. It was a company called NowRx. I thought it was really cool because I felt like there were some serious tailwinds for pharmacy delivery.
And while I generally advocate investing in "category kings," this was one of the rare exceptions where I did believe there was room for more than one winner (or at the very least there is some interesting potential M&A activity down the road in this space). I was just getting started and I put a small check in. Last I checked, they're doing things a bit differently. They went back to their initial accredited investors, and just from that group (no institutional capital) raised $20 million for their Series B.
How did you start getting deal flow, especially to the point of scaling it to a syndicate today? It feels kind of like a cold start problem where you need a group of investors to attract founders, you need founders to attract investors to back your syndicate.
An obvious shortcut was AngelList because I backed every syndicate that would accept me. I have a high tolerance for pain and didn't mind being bombarded with deals. It was similar to my start as a lawyer, you start off your first couple of years as an associate, and you're doing nothing but basically reviewing documents. I'm able to handle drinking from the firehose in that regard. Once I was getting a lot of deals from AngelList, that helped me figure out what I like (and dislike) and understand more about the space.
Just invest in some deals to get comfortable and if you want to take it further, just keep walking through open doors, asking questions, and do not be afraid to raise your hand. If you raise your hand and say, "I'm interested in this," you will see an impact. I think as women, we can be a little shy about leading with intention and raising our hand to say: "I want to be an advisor, I want to be on a board, I want to raise capital, I want to start a fund." People can't help or connect you if they don't know you're going after a goal.
Things that have at times been a disadvantage in the corporate world became an advantage. I stick out like a sore thumb on AngelList because I don't know if there are frankly any black women (or more than a handful). There are very few female leads, and no other active black leads. I have folks just reaching out to me observing that and then wanting to connect.
From a macro perspective in the country, we're all aware of what's been happening from a racial injustice standpoint. A number of founders and VCs are saying, "How can I do my part here? How can we diversify cap tables? How can we support diverse founders."
In terms of internet research, I researched angel groups and affinity groups. Usually, you can find ones associated with your alma mater, women, LGBTQ, or Black Latinx communities.
Then I started proactive outreach. I was reading articles and figuring out who the best accelerators are. The companies in this stage are more approachable. I proactively reached out to Techstars and other accelerators. By virtue of my activity on AngelList, I received invitations to YC Demo Day.
Network effects are also visible in angel investing. The deeper you're in the ecosystem, the more deals come to you. When I started out in June. I had virtually no VC fund contacts and 0 LPs and have since been able to establish a number of fruitful relationships and grew my syndicate to 650+ LPs.
If I read about something that was interesting, I might reach out to the founder. You'll be surprised by the number of founders that respond and are interested in talking to you. As things grow, if you help a founder, chances are that the founder runs in a circle of other founders. The founder may then recommend you to other founders. Then again, as your portfolio continues to expand, you're getting access to more deal flow and folks are sending you inbound deals.
Overall though, the general principles of networking still apply. If anything, you should be asking people how you can help them.
Network effects are also visible in angel investing. The more you're in the ecosystem, the more deals come to you. When I started out in June. I had virtually no VC fund contacts an 0 LPs and have since been able to establish a number of fruitful relationships and grew my syndicate to 650+ LPs.
You started investing two years ago, but when you started, you did everything that you could to invest in multiple opportunities. Most get started with getting their feet wet a little bit and build up their confidence over time.
I'm speaking from two places of privilege: one is time. At my seniority level at the real estate fund, I'm more of a problem solver than an executer. I also don't have children, and I don't have to balance that.
The other privilege is the capital privilege. Angel investing is scary, you have to assume that when you invest your money, you're never going to see it again. It'd be really awesome if you did and got some return on that. But you have to accept that level of risk, which is also why if you're someone who's risk-averse, other forms of investing might be better.
You can also invest in a few different companies at a smaller check size. It's like having an index approach. If you invest in 10 companies and you're getting quality deals, if one of the 10 does well, you may return your "index fund". Then you get that comfort level and you get a better feel for which companies are doing the things that increase their odds to succeed and become better at pattern recognition and in turn, spotting outliers.
Have you seen any exits for the companies that you invested in two years ago?
It's too early because the timeline for angel investing is long and ever-increasing as these companies elect to stay private. I do some biotech investing and those timelines are different than tech investing because there is active IPO and merger activity. Biotech might be on a 3-5 year timeline, as opposed to 7-10 years in tech.
I have my first exit pending but mostly I have had paper markups, which are nice, but you cannot take that to the bank. Only one ceased operations, it was part of an acquihire. I got some of my money back but I didn't make a profit. I'm glad it happened as crazy as that sounds.
It was one of the first five deals that I did and it taught me one of my best lessons. Fundamentally, I didn't agree with the company's product on a few levels, including unit economics, how they could scale, etc but the roster of co-investors consisted of everyone I had an intellectual crush on. I thought that perhaps I didn't understand the deal because I was new to investing.
I learned that while you want to be in deals where high-quality firms are participating, you have to be comfortable from the diligence standpoint and trust your gut. You're going see deals that are backed by the "who's who", and if your gut is telling you it doesn't work, you may likely be right.
I learned that while you want to be in deals where high quality firms are participating, you have to be comfortable from the diligence standpoint and trust your gut. You're going see deals that are backed by the "who's who", and if your gut is telling you it doesn't work, you may likely be right.
How do you balance angel investing with your day job?
Working in-house as a General Counsel gives me some flexibility. I also have a passion for this. I wake up early and I'll get things done a few hours before work and do things at night if I need to. For example, I had a call with an investor not too long ago. He asked whether I could talk at 10 pm. I wanted to watch the NBA Playoffs and go to bed but instead, I spoke with him and it was just awesome. We ended up speaking for two and a half hours and shared a ton of deals/insights.
The number one thing is to work smart and efficiently. I don't like people who brag that they work 100 hours a week. That's not productivity - that's activity. I try to be productive and structure my days. If I need to do something on the weekend, or after dinner, I have the flexibility to do so.
If you don't have that flexibility, you can find what works for you within your schedule to be successful. You can find someone who's doing what you want to do (and who has similar personal and professional commitments), and ask them what they do, and emulate it. That's true of angel investing. That's true of every profession.
There are many more fund managers getting started these days and there's not a lot of information online on how to get started. Many of these new fund managers started from scratch.
I love that attitude because I cold email a lot. I respect other people who take a leap and reach out to me. I focus on building relationships more than just money. If you're trying to get every basis point that you can from every deal you're on, you're actually probably hurting yourself.
If I want to fill an allocation, I have enough LPs to do it now. However, sometimes I get a deal and it makes sense to share it. For example, for a recent proptech deal that I did, there was another knowledgeable real estate syndicate lead that I asked to co-syndicate with me. He's the CEO of a US-based proptech company and understood the market deeply. I told him I'd like to run the deal with him because he can be of tremendous help.
He agreed and that means I made half the carry. I probably could have done the deal on my own. But it doesn't matter if I get all the carry if the deal fails. I'm doing everything I can to bring not just capital but the best people to portfolio companies.
Also, when you form those relationships, it's a deal flow hack. I've gotten access to deals just based on sharing deals and leads reciprocating. If I get a deal that's not in my wheelhouse. I'll suggest two to three people who can lead the investment and make those introductions. I'll see those deals go on and be successful and I'm fine with that. The return there is the relationship.
You have to think in the long term rather than the short term.
Absolutely. That is what I learned from real estate. It's all about relationships.
What's the number one piece of advice you would want to share with aspiring angel investors?
Commit to get started, join Angellist, reach out to one person that you went to college with who's investing. After the first investment, it gets easier.
Another thing is to appreciate that things that you might be perceiving as disadvantages might actually be advantages and differentiate you.
Where can people follow you or reach out to you?
My website, my syndicate, or LinkedIn.
Reading corner π
Break into start-up investing by Erik Torenberg
Erik has been writing essays at a weekly pace and all of his articles have been insightful (Iβm a faithful subscriber). This particular essay goes into how to break into start-up investing. Most important is to build your personal moat and differentiate yourself as an angel investor. What can you bring to a founder that no one else can provide?
Getting from seed to series A by Peter Specht
For most angel investors, you'll be investing at the pre-seed and seed stage. Even though you are looking to invest in the businesses that have the potential to become billion-dollar businesses, tactically the best way you can help your founders is to help them get from the seed stage to series A by helping them achieve certain milestones: achieving product/market fit, having a strong core team running the organization and getting in front of the right investors and running a tight process.
Our Angel Investment Thesis by Jared Messenger
This is a good example of an investment thesis from angel investor Jared Messenger. It has three simple things that he looks for that can guide founders before they decide to reach out. His three things? Reasonable returns, a founder with domain expertise, and a simple explanation of what the start-up does.
An Ode to Cold Outreach by Yuliya Bel
This is more for founders than for investors. Yuliya shares a great method for founders to build a strong list of investors to reach out to so that founders can be more strategic in their cold outreach and hopefully increase their chances of getting funding.