😇 Angel Interview #2: Deepali Nangia

"Having capital is one of the most empowering things that can happen to you."

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Can you give a quick introduction of yourself?

I am an advisor to female founders on their fundraising. I've been doing this for many years now. I had a very traditional [finance] career starting in an investment bank in New York, then moved on to private equity for many years.

I wanted to marry my investment skills with operational experience so I went to work for the CEO of Marsh & McLennan and also set up a back office for them in India. I really learned the nitty-gritty of how to build an operational team with metrics. Then I went to work for Aon, where I was Operations Director for the EMEA team.

I left [London] about eight years ago and I helped launch and run an angel investor network for four years for the Kensington & Chelsea Council – it was called Wild Blue Cohort. That's how I started angel investing and supporting female founders.

Two and a half years ago, I left and set up my own advisory practice helping female founders fundraise and continued to angel invest. This year, I'm investing out of the Atomico Angel program. I've committed to making three investments already in wellness and digital health and I am looking to make 3-4 more investments this year.

Why did you decide to focus on investing in female-founded startups?

I always had friends who were running businesses and they would come and ask me for help and guidance. I loved brainstorming and strategizing with them. I think there's a rapport that you build with the female founder. It's a different chemistry. You can talk to them about anything – nanny and schools, hair and nails as well as business strategy. You can empathize with each other.

I feel like female-founded companies are an underserved market. Female founders, whether it's not enough female investors or unconscious bias, find it harder to raise capital. So I just had an affinity, I wanted to help close that gap. I also advise female founders and I wanted to put my money where my mouth is.

Female founders, whether it's not enough female investors or unconscious bias, find it harder to raise capital.

When did you start angel investing?

The first angel investment I made was four years ago. I invested in a company called LiveBetterWith, which was for patients to live better with cancer. They were doing commerce, community and content around cancer. Then the founder expanded into dementia and menopause.

I then invested in a female CEO in a Fintech company doing pensions consolidation – PensionBee. I have since invested in Polipop, Adia Health, Kama and two more investments, pending close. I love Femtech and have a few investments in that area. I believe there are a data gap and an investment gap in women’s health, an arbitrage of sorts.

You've mentioned female founders represent an underserved market. Have you seen that change over the last few years?

I first started running an angel network eight years ago. At that point, I didn't feel that there were that many women building big scalable businesses. I feel that's changed a lot. I meet a lot more women now that are building big, scalable businesses in interesting markets and under-innovated areas.

Femtech has been a phenomenon for the last few years. It didn't exist in the volume that we see now. I also see a lot more women in VC than I did before. These women will move up the ranks and we will have a lot more senior women on the table, helping close the investment gap. Me and three co-founders have launched Alma Angels. We are trying to build a community of both women and men who would like to angel invest in female founders.

I meet a lot more women now that are building big, scalable businesses in interesting markets and under-innovated areas.

Can you tell me a little more about Alma Angels?

We are supporting the next generation of angel investors who invest in female founders. We have done sessions for angels around how to do due diligence and around legal documents. We've done sessions where we brought in angel investors to tell us about how they think about angel investing, how they diversify their portfolios, etc.

We've also got lots and lots of sessions planned. We might do a deep dive into Saas businesses, into direct-to-consumer businesses, hardware businesses, sustainable fashion tech, all these different verticals. It is a community around sharing deals, doing diligence together and learning from each other. So far the journey has been very exciting.

I remember women used to come up to me when I spoke at events. They would say "we'd love to learn more about angel investing." We would set up a meeting and they would come to my office and we would chat. We would share deals and we would perhaps invest together. This is a far more scalable way of doing this.

It sounds like you've been angel investing for a while. Do you remember how you first heard about angel investing and what impressions you had?

I was managing the angel investor network for Kensington so it was my job to meet startups and meet angels, and connect them. So for me, it was quite natural because I'd already been doing that for two years before I started angel investing.

I also come from an investment background so angel investing wasn't unheard of. But of course, in private equity, businesses have been going for many years and they're raising to scale the business towards an exit. Given metrics and stage, these businesses are much easier to evaluate in some ways. With venture, these are businesses where sometimes they only have a piece of paper and an idea. It's a completely different ballgame.

With venture, these are businesses where sometimes they only have a piece of paper and an idea. It's a completely different ballgame.

What is your goal in terms of numbers of checks and check size in a year? Do you have a vertical you focus on?

I've done 5 angel investments prior to the Atomico program. I have done 3 investments already this year and will probably make another 4.

I tend to like businesses that are profit with a purpose. I love Femtech and have a few in my portfolio already. I like digital health and sustainability. I would like to look at some new industries this year and I am looking at one in gaming currently.

In terms of check size for this year, Atomico has committed $100k and I have already written two slightly larger checks towards the beginning of the year. I'm hoping to write a few more $10k checks because I want to support a few more female founders, given COVID.

What are your thoughts on scout funds?

The Atomico angel program is fantastic. I don’t know about the others since I have not investigated them. However, having capital is one of the most empowering things that can happen to you. The Atomico program is also about grassroots-level investing since the angels come from all sorts of backgrounds. I feel very grateful and privileged to have been given the opportunity.

I've had a great support system with the other people in the program. We can draw on each other’s skills and expertise and we look at deals together. I also talk to the Atomico research team because they are available to help us if we want to look at a sector in detail, which is very useful.

Having capital is one of the most empowering things that can happen to you.

How much time overall on average in a week do you spend on angel investing?

I do this full time: I'm an advisor to female founders on their fundraising, I'm helping six women right now. So obviously, I spend 60% of my time on that. I spend 40% of my time looking at new deals, meeting founders for investment, talking to funds and doing due diligence.

It sounds like advising companies goes hand in hand with the angel investing work that you do.

I feel like it makes me a better advisor because I'm in tune with what's going on in the market. I'm advising a fertility business and I might be getting pitch decks from fertility companies.

I also might be investing alongside a fund and know the sectors they are investing in so I am able to send them a business that I'm advising. It's very interlinked, actually.

You mentioned you spend quite a lot of time doing due diligence. What is your due diligence process?

I have a list of standard questions I go through. As I always say, my version of an MVP is evaluating the mission, vision and passion of the founders.

I talk to others to validate demands. For example, if I'm looking at a B2B business selling to HR, I will try and talk to HR directors: "Is this an employee benefit that they would buy?" Another example is that I'm looking at a bio plastics business and I spoke to the London Waste and Recycling board to validate the idea.

Due diligence is trying to get to: “Is this a problem? Is this a real problem that they're trying to solve? How big is this problem? Is somebody willing to pay for this problem?” So I talk to a lot of people.

I will also talk to some seed and pre-seed funds. I would shoot them an email and say I'm looking at a company. I ask them "Are you interested? Have you met them? What do you think?" And then we'll talk on the phone.

Due diligence is trying to get to: “Is this a problem? Is this a real problem that they're trying to solve it? How big is this problem? Is somebody willing to pay for this problem?”

What incentivizes the fund partners to talk to you?

Firstly, I am an angel investor who is not encroaching on their territory. Secondly, I have looked at the Femtech sector in a large amount of detail and they might just call me to ask me what I think, given my experience in the sector.

I also like to help founders by introducing them to other investors/partners. Post-investment, I roll up my sleeves and get involved with founders. I think this is helpful in the early stages of the business. It is about being more than just a check.

Switching gears, what are some challenges with angel investing?

You know, sometimes it's really hard to decide. I wish I had enough money to invest in many more female founders. I hate saying “no” but I have to so many times.

I think about the real fundamentals of the business and then I think "I love this founder". It's that constant debate in my head about whether I should do it or not do it. I think that's the hardest part. I really want to back this human being because I feel that they're fantastic, driven and resilient and all these things… But is this business really going to make money?

What tools do you use for angel investing?

I don't use any tools but Excel.

What's the number #1 piece of advice you want to share with aspiring angel investors?

Come join us at Alma-Angels (www.alma-angels.com). We are building a fantastic community to back female founders. You can learn, you can teach and you can do deals.

Where can people follow you or reach out?

You can follow me on Instagram @deepali_nangia, on Twitter @deepalinangia, or connect with me on LinkedIn.

Did you enjoy this interview with Deepali? Any questions or thoughts about her story with angel investing? Leave a comment.

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If you're interested in reading more, here's the first interview of the series with Mireya Manigault.