Powering through the pandemic: Super Angel, Chris Adelsbach tells us how he adapted and continued to invest in 2020
The past year has been a challenge for everyone as we adapt globally to living with the on-going pandemic. After the initial shock of the first lockdown in March 2020, angel investors rallied to keep the ecosystem going, determined to continue supporting their portfolio and investing in new early-stage businesses. Prolific angel investor and former UKBAA Angel investor of the year, Chris Adelsbach, had a particularly active year making 17 new investments, bringing his total to over 140 companies, and recently being named the most successful Fintech angel in Europe by Sifted. We sat down with him to find out how he managed to adapt and to discuss what he’s learned.
Shortly before the first lockdown was implemented in March, Chris found himself caught up in the travel restrictions imposed in-and-out of America by then President Donald Trump. Having to make a split decision whether or not to fly to the US for a surprise 80th party for his father, Chris decided stick to his plans but upon arrival he found that everything he had planned, was cancelled due to rules around the pandemic. He managed to return to the UK on the final day before the travel ban was fully implemented, and on returning home he self-isolated and took the time to regroup.
While Chris was isolating, Prime Minister Boris Johnson put the UK in a complete lockdown for a 12-week period. That inspired Chris to start a WhatsApp group consisting of eight of his FinTech portfolio companies as a support network and a place for knowledge sharing to adapt to the challenges that were evidently on the horizon. That group quickly turned into a Zoom call, which then became a daily morning meeting five days a week that continued throughout the 12 weeks. Explaining more about why he set up the group, Chris shares:
“We were all at home, we didn’t want to be victims, and we all realised that we had knowledge networks that could actually help both government and businesses and, ultimately, people. We traded ideas, concerns, and access to people in our networks. It was incredibly dynamic, energising, and ultimately, useful. It also gave us all some structure during an uncertain time.”
One example that Chris could share was about portfolio company Crowdz who was instrumental in underwriting emergency loans in the US to black and ethnic minority businesses. In just days, Crowds underwrote in excess of $100 million of Covid-support loans. Crowdz have since gone on to sign a public deal with Facebook who are actively supporting their supply chain with low-cost financing using the Crowdz platform.
Reflecting on those 12 weeks, Chris feels that his approach to investing in founders that accept mentorship and like to collaborate with others was validated. He also believes that having that core group of 8 founders at the end of a phone was a lifeline and it bolstered confidence that things were going to alright.
One of the biggest changes Chris has had to make is being unable to meet founders face-to-face. Until the pandemic, he was used to travelling extensively but due to the restrictions around the world, he’s had to adapt to a digital approach.
“As an angel you are ultimately backing people and I had to learn how to get comfortable making investments without first having a number of in-person meetings.”
“An area where I had to change, for sure, was being able to diligence a team without the benefit of meeting them in person. As an angel you are ultimately backing people and I had to learn how to get comfortable making investments without first having a number of in-person meetings. That felt strange for me. Interestingly, as the lockdown progressed, I began getting calls from later-stage investors who were having similar difficulty. In order to progress investments, many were able to get comfort on teams by speaking with their earliest investors, such as me. All of a sudden, phone calls to angel investors became part of a Series A term sheet sign-off process. During 2020, I probably had over twenty calls with investors about founding teams that I had worked with over the years. It shows how people adapt their ways in order to move forward.”
As to whether his personal investments made in 2020 will prove to be as fruitful as those he has made in previous years, he says it’s too soon to tell.
“I invest very early in the life of a start-up so I’m not going to be able to tell for at least two or three years whether this cohort performs financially any differently than the past. What I can tell now is that this group of founders is resilient and appears to collaborate and share just as much as companies I’ve met face-to-face. When I meet a founder, even before I invest, I try to connect them to value add people within my network. If I introduce the founder to two or three people that I think could help them, I generally get feedback. I value that feedback and I use it in my decision to invest more time and money with the founder. However, if I don’t invest, which is often the case as I speak to hundreds of founders each year, at least I’ve added value by virtue of the connections I’ve made. I encourage other angel investors to use a similar approach.”
At the end of 2020, Chris looked back over the investments he’d made in 2020 and he discovered that 47% of the new investments he’d made were in diverse founders. Explaining his approach to increasing investment in diverse founders, Chris explains:
“I’m investing at the intersection of finance and technology so I’m already somewhat at a disadvantage when it comes to diversity, but I’m conscious of that. A lot of investors who provide start-up diversity statistics take a pretty broad view of what that means. For me, I say, what is the diversity of the CEO? Sometimes you have a founding team of four, and you have a woman who is the chief marketing or operating person, and many investors will pat themselves on the back and declare that they invested in a diverse team. I measure myself to a different standard and track diverse CEO’s – the person you would most often see at an event or on a stage. That’s the acid test for me.”
For Chris, investing in diversity is something he’s conscious of but he doesn’t purposely choose founders to tick a box. He comments:
“I want to choose the best founders, who will give me the best return on capital. People have their own biases, and I’m sure I have unconscious biases in all sorts of things, but I want to make sure, as a supporter of entrepreneurship, that I hold myself to a higher standard, disclose to others where I invest and whom I invest in and see if we can all be more conscious of our blind-spots and improve. Undiscovered and unsupported talent is a travesty and I want to play a role in alleviated this.”
Something else he’s passionate about is neurodiversity, an area that is rarely talked about and is currently very poorly understood. Discussing his research in this area, Chris says:
“A lot of these founders don’t feel safe enough to talk about it. There’s a study which said that the level of autistic children in the tech and entrepreneurship hub, Silicon Valley, was five times the national average. You have these concentrations of highly technical, mathematical and computer science driven people and for whatever reason, their offspring have been diagnosed with high levels of autism. Professor Simon Baron Cohen, who is Europe’s foremost authority on neurodiversity and autism, published a book about a month ago that suggests a link between people that are neurodiverse, and innovation. There’s a further inference that innovation leads to entrepreneurship. However, these same people have some of the highest levels of unemployment and of suicide, far greater than any other group, but it’s never discussed.”
Turning his attention to his investment focus for 2021, Chris knows that the landscape is going to look fairly similar to 2020 due to the on-going pandemic. While there is a light at the end of the tunnel, there’s still some way to go, which means that for the foreseeable future everything will still be done online. We’ve just entered February and Chris has already made three investments this year. Detailing his approach for the year, Chris reveals:
“I’m super conscious that I want to continue backing great founders and I want to make sure that what they do adds value into society. At my stage of investing, what they need is mentorship as well as investment. At a high level, these are the things I look for. I’m just going to have to continue helping founders from the safety of my home with the back-ground noise of my children for the time-being!
Keep up-to-date with Chris Adelsbach at https://chrisadelsbach.medium.com.
