😇 Angel interview #7: Saloni Bhojwani
"Consider the opportunity cost and your ability to add value when considering investing."
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Saloni is an investor at Founders Factory and angel investor focusing on predominantly female-founded businesses. Her background is in management consulting, and she spent two and a half years as a start-up operator at Zebra Fuel leading strategy & optimization. She is based in London.
Can you give a quick introduction of yourself?
My name is Saloni. I grew up in Singapore and I'm of Indian ethnicity. I attended an international school in Singapore then went to Tufts for my undergrad. After graduating, I moved back to Singapore and worked as a management consultant at Deloitte for 4 years. My first foray into the startup ecosystem was during that time. I worked on a project for Singapore's Media Development Authority (one of the larger public funding vehicles in the region).
In 2015, I moved to London for my MBA. I knew I wanted to get into tech, but I wasn't sure if I wanted to go the operator or investor route. I used the MBA to explore what I enjoyed. I was a mentor at accelerators like Microsoft Ventures and Seedcamp and interned at Luminous Ventures, Uber and Expedia.
When I graduated I knew I wanted to be in venture but getting into venture capital is not a matter of simply wanting it. I spoke to LocalGlobe and they mentioned there was a growing interest in hiring investors who had a previous operator profile. They suggested a role at Zebra Fuel that just completed their seed round. I was the first hire and on the founding team. I was responsible for growing us to 45 people and helped us raise a £3 million bridge round.
After that, founders reached out to me asking for help with fundraising strategy and business strategy. I helped with the model, the underlying assumptions, and walked them through how the assumptions flowed through. I also advised on market sizing, pitch decks, financial forecasts, navigating the ecosystem, etc. These founders would say, "you've been helpful to the business. We'd love you on the cap table". That's how my angel investing journey kicked off.
It took me time to refine my investment thesis and find my sweet spot. I invest in pre-seed or family & friends rounds and put in small ticket sizes. I'm founder-focused because I want to work closely with them. If I get along with them and if they feel comfortable enough to ask me questions and be transparent, I feel like I can add more value.
Now, I only invest in female-founded businesses and have an interest in start-ups that address the female data gap. I read a book called Invisible Women by Caroline Criado Perez. She discusses how most of the structures in the world were built based on the male body and accordingly how we're missing out on 50% of the equation. This gap manifests mainly in healthtech and femtech.
You started investing by advising founders. When you first were invited onto the cap table, did you think about it as "angel investing"?
I did. One of my colleagues at Zebra Fuel had done some angel investing. That's when I realized it's not limited to people later in life.
If you work with a business, develop a rapport with a founder or founding team, and they value your opinion, they are often willing to lower the minimum ticket size.
What does the advisor role entail?
As an advisor, you often get rewarded in cash & equity, especially if you have built a business in the same space and can use that experience to inform their business strategy. Advisors take an active role, dedicating 1 to 2 days a week, or 1 to days a month to work with founders. It's quite different being an angel, though they aren't mutually exclusive.
Early in the life of a start-up, founders need help learning about new business models and new challenges that come with starting something. As an advisor, I've helped with fundraising materials and made introductions to investors. In return, I often get to invest at a lower ticket size than a non hands-on investor.
How long have you been investing?
How many investments have you made so far?
I have made 5 investments so far.
Do you have an aim for the number of investments you want to make a year?
I don't have a specific number. One of the reasons that I don't have a specific number is because I will adjust the amount of capital that I want to put in based on how much conviction I have.
I don't want to do a typical, standardized investment size and number. I'm a young professional and my capital is limited so I would rather have that flexibility. I wish I had endless amounts of money to invest in female-led businesses because I like so many of them! It's just a frustrating reality that I don't have the capital to do more.
I made an investment in January pre-COVID and then got swept up in pandemic-induced uncertainty. In the summer I started looking at deals again and I’m excited by a number of them.
Has the investing landscape changed dramatically since Coronavirus and the pandemic?
It's hard to get a sense of a person from video. It's a hindrance. I'm one of those people that you can tell the kind of person I am from a video call. But not everyone is like that. That will result in a bias in the industry for extroverted founders and those more accustomed to doing investor meetings remotely.
[Video] will result in a bias in the industry for extroverted founders and those more accustomed to doing investor meetings remotely.
How much time in a week do you spend on investing?
I'm lucky that it’s my day job and side hustle! Both roles lend credibility to each other. They have their synergies. I work in the industry as an investor at Founders Factory. I meet many early-stage companies solving compelling problems. Sometimes I'll talk to a company and while they may not be a fit for Founders Factory, they could be interesting for me and vice versa.
The time I spend looking at angel deals per week is difficult to quantify and fluctuates every week. Around an average of 2 hours per week. When I attend webinars and events, they're of value to me in my role at Founders Factory and as an angel investor.
At the Factory, some of the female founders in the portfolio will come to me, even though they're not in my portfolio, and ask me for advice on their business, or introductions to certain investors. I want to support female-founded businesses in any way I can, the gap needs to be closed somehow right?
I also scout for Backed VC. It’s an ideal place for me to send compelling deals that are too late or not the right fit for me on an angel basis.
Sometimes I'll talk to a company and while they may not be a fit for Founders Factory, they could be interesting for me and vice versa.
Do you ever run into a problem of conflict of interest between the Factory and your angel investing?
When I joined Founders Factory, I made it known that I was already an angel investor and intended to continue making angel investments. I discussed it quite extensively with the team. I listed all of my investments and all of the companies I've worked with and the ones that I was working with at the time. I cover one (albeit quite broad) sector primarily at FF, so I've never been in a situation where there was a potential for conflict of interest.
When I joined Founders Factory, I made it known that I was already an angel investor and intended to continue making angel investments [...] so I've never been in a situation where there was a potential for conflict of interest.
When you're doing your due diligence, are there any unique questions that you normally ask founders?
I try to dig around first. I invest super early, sometimes pre-product pre-launch. At that point, it's about the founder and I probe into how they came up with the idea to assess how passionate they are about solving that problem.
I meet a lot of entrepreneurs who are entrepreneurs for the sake of being entrepreneurs. I invest in entrepreneurs who really want to solve a specific problem, the founding team I believe is best equipped to solve it.
For example, a founder in my angel portfolio is the founder of Wild AI, an app for female athletes. The premise of the product is that all fitness and health-related information from your coach on a sports team, your wearable, are developed for the male body. Females are viewed as small males, but females have a different physiology. We should be training for sports according to our menstrual cycle. We should be eating according to our menstrual cycle.
When I met Helene, the founder, I asked, "What do you do in your free time? Why did you build this?" She told me she was an athlete, she had done ultra marathons and triathlons. She needed this tool. To me, someone who has the mental stability and resilience to run 100 kilometers can push through. This woman is not going to give up. There are different ways to assess these things but I spend a lot of time with founders before I put money into their businesses.
The other thing I do try to assess is what kind of team can they attract. Helene got one of the cofounders of Clue, the company that coined the term "Femtech" to join her as the Chief Product Officer purely on equity at the beginning. This person could be doing anything he wants. That was encouraging to me.
I meet a lot of entrepreneurs who are entrepreneurs for the sake of being entrepreneurs.
It sounds like you've forged a strong relationship with the people you invest in.
It varies from company to company. There are some founders who only reach out when they have a question: "This employee is giving me trouble, have you ever dealt with this before?" They have operational efficiency issues, they're fundraising or they want me to vet their pitch deck.
I tell the founders I invest in to reach out to me via text/Whatsapp if they want to get in touch. They can call me when there's a problem. It's an informal and friendly relationship. Often, founders are fun to socialize with and have interesting friends as well. They have strong networks and they refer some interesting deal flow, which is a nice bonus!
Has there ever been a situation where you were interested in an oversubscribed round and had to convince a founder to take your check?
I just passed on a round that was oversubscribed. I couldn't make my mind up in time. It was a deep tech company. I had 5 days to make a decision. I couldn't read the entire internet in 5 days. I needed to pass even though I knew it was an interesting round and they could have taken more money.
If founders have an oversubscribed round, they will take the additional money, especially nowadays because there's uncertainty about what the next year will hold. In Founders Factory's portfolio, we have companies getting oversubscribed rounds and some of them do a rolling close so that they can take in money as it comes.
With certain companies, I'm the target user and I can give honest feedback. That would be my selling point. I also put my founders in touch with each other to discuss and debate problems that both of them are facing.
Most other investors also have a good network. If the founder is choosing a check between me and another angel, it'd be hard to choose based purely on network. Selling your network is going to be hard as an angel investor because in a smaller community like the UK, we pretty much all know each other.
If the founder is choosing a check between me and another angel, it'd be hard to choose based purely on network. Selling your network is going to be hard as an angel investor because in a smaller community like the UK, we pretty much all know each other.
What tools do you use for angel investing?
I have everything in Google Sheets and that's really it. I'm too early in my angel investing journey to have to track portfolio value.
What is one investment that you're proudest of and why?
There are two I love for very different reasons.
Wild AI. I'm beta testing the app right now. I started using it 2-3 months ago. It has optimized my lifestyle. It's not a recent investment but I'm proud of them for their fundraising approach. They haven't raised since when I last invested. The team has rallied during the pandemic and quickly adapted the app for athletes that are in lockdown and still training for a swim or a race. The speed of execution and the turnaround to respond to the global pandemic was amazing.
On the training plan, there's an option that says "I'm an athlete, but I'm locked in my room". They give you alternative ways to train and to keep up your endurance and your technique. The amount of partnerships that Helene and her team secured is amazing. For example, she has Stacey Sims, a leader in this field.
The other one that I'm really proud of is Rubiesintherubble. They work directly with farmers to create a market for unsold produce and sell their range of ketchups, plant-based mayos, and relishes to retailers and restaurants across the UK including Waitrose, Sainsburys, Marriott, Pig Hotel, Hippo Inn group and many independents.
Jenny is the founder. She grew up on a farm on the coast of Scotland, and food and sustainability was always close to her heart. Around £20bn worth of food goes to waste annually in the UK, and while she was working at a hedge fund, Jenny started researching food waste. Upon realizing its scale and implications, she quit and started Rubies. Fun fact: the mayonnaise is made with aquafaba, this goopy chickpea water that comes out of the can. She realized that it has the same consistency as egg whites and it could be a substitute.
I've experimented with vegan food. These are interesting alternatives, like using cauliflower instead of flour & eggs for bread.
When I invested it was a weird time because they had proven the business model and they were ready to scale. The business was doing well, they had gotten awards and the products taste great. For somebody like me, I needed to love the product to invest. That was my first question. Jenny gave me a bag of all the samples. I ordered a ton of fries so I could try everything. If it's a condiment company where the product doesn't taste good, no way am I investing. But honestly, Rubies is better than Heinz.
After I tried the products, I was ready for a second conversation with Jenny. She is one of the founders who I don't have a close relationship with but when things are difficult or when she's having an issue, she'll message me or call. She's super transparent.
She's also an experienced founder and she's done this for a while. She's had other formal and professional experiences that make me think she can deal. She's built a business for good: they're taking a problem and solving it practically. She's secured many partnerships and there's just an amazing amount of progress in a tough market.
What's the number one piece of advice you want to share with aspiring angel investors?
Consider the opportunity cost and your ability to add value when considering investing.
From an investor perspective, the opportunity cost is key. if I'm investing in this company, what am I not investing in? Usually, the reason I don't invest in something is because I want to invest in something else.
I also put myself in the founder's shoes to understand what they need the most. I tend to pass when I know I can't add value to a company, other than capital. From a founder's perspective, having value-add investors is crucial. You want to be able to go to people that are on your cap table and get good advice. If I don't feel equipped to do that, I will be less likely to invest, even if I love the company.
Consider the opportunity cost and your ability to add value when considering investing.
That makes sense. You're trying to figure out founder-investor fit. Where can people follow you?
You can find me on LinkedIn.
We would love to hear from you. Do you have any questions for Saloni around angel investing? Feel free to leave a comment below.