The GoBeyond Approach
Ms. Brigitte Baumann, the founder of GoBeyond Early Stage Investing, has 17 years experience as an angel investor and was named European Angel Investor in 2015. Before GoBeyond she was with American Express, where she lead intrapreneurial teams. One innovation led to the creation of Expedia.com. This is where she got the entrepreneurial “bug” and became a business angel. She started the first learning by doing GoBeyond group in 2008, to encourage individuals to grow by supporting startups, so-called angel investing. Primarily, it is focused on the Swiss and EU markets. GoBeyond offers access to angel investing in both a fun and professional way, It approaches angel investing as an asset class. It curates connections between likeminded investors and entrepreneurs. It is key that these are at the forefront of innovation, with talent, drive and determination to succeed. Many of GoBeyond members also seek entrepreneurs with Purpose and diverse teams. GoBeyond aims to provide constructive support by sharing valuable resources, facts, figures, insight and expertise in part from having a comprehensive startup portfolio building, managing and exit process in place, GoBeyond equips investors with intelligent analystics and provide comprehensive training programmes.
As of early 2020, the following facts apply:
884 early stage investors that come from 45 different countries and represent 48 nationalities.
Invested a total of EUR 24.1m (CHF 27.3m) in cash to the investors.
88% of investors who have invested at least once have breakeven or positive returns based on actual exit values and Net Asset Value.
As of now, Ms. Baumann foresees a typical 3-stage finance support process for entrepreneurial start-ups:
Key first round for an emerging start-up: the vision and the team are particularly important at this early stage. An entrepreneur raising financing should understand at what stage her/his company is in the way that investors think about development and what they are ready for. Lay out what they want in terms of money, terms, support and valuation now as well as forward thinking to the next rounds. It is useful to develop a matrix that includes the different types of financing that could fit for each financing round. 2-3 types of financing can happen at the same time.
Second stage: Additional funding is conditioned on positive testing of the basic business concept – does it seem to be viable or not? From an investment portfolio point of view, follow-on rounds are very important. 10 years on angel investor data that GoBeyond has been collected shows that investing or not in follow-on rounds is a strong driver of returns, rather than the static attractiveness of a given project at the first round. So, the key is to assess the attractiveness of strings of investments for a given project, having used the first round to “test the water”.
The third and possibly fourth , and typically final rounds then involve bringing in considerable additional financing. For these rounds Ms. Baumann, as a business angel develops a “mind-map” including who might the potential acquirers of this startup? From whom do they usually hear about the startup? Are some of those investors who may be interested to come in this round? GoBeyond members often coinvest with other investors. Recommendations are key! So, to focus on investors that are likely to bring in others is critical – the power of recommendations.
Ms. Baumann strongly believes in meaningful diversification of investments, both when it comes to her own holdings as well as when it comes to the asset mixes of other investors in GoBeyond, i.e. a portfolio of investments. She emphasizes that diversification can help to get rid of biases. Keeping humility in the process is also critical. (Peter Lorange’s note: an investment portfolio as just described represents the typical meaning of the portfolio label and is different from the string of financing rounds for one given project, described for stage two, which might be seen as a portfolio of sequenced investments for this given project).
So, taking a portfolio approach to angel investing is key. Ms. Baumann applies several approaches to assess and manage her angel investment portfolio:
Published real (rather than self reported) data from other GoBeyond member portfolios
Careful listening to investors’ experiences
Rely on her own network of experts, that she can trust
Curiosity, open-mindedness, willingness to learn and ability to deal with challenges are key features of the members of this investor community, whose principles rely on co-sharing and peer-to-peer.
Lessons from the Corona Crisis
This was a wake-up call. Based on having been through several crises, Ms. Baumann feels:
Investors generally seem to feel that they must let their money work, i.e. continue to invest!
But, more thinking about which ways key developments will now take the world
To adapt fast is more key than ever, i.e. maintain speed!
Be agile! Show new leadership! She uses the term “agility muscle”. Now is the time to use this muscle!
So, entrepreneurship seems to matter more now than at earlier times (a mind-set). Early stage investments will not go away!
The burn-rate issue
It is not only the CEO who should be responsible for keeping the burn-rate under control, but a team, typically consisting of two to three people near or at the top. And, learning is key here. Some learn faster than others how to latch onto a realistic burn-rate.
There are four factors that impact decisions regarding burn-rate.
The strategy: how fast to grow (often with high burn-rate, when growing fast) and when/the timing, with how much
The cash position (“How much reserves in the bank?”)
Exit strategy (understanding how important or not it will be to have the burn-rate under control when attempting to exit)
The founder and his/her team, as well as other shareholders (what can they accept?)
Comparison of GoBeyond with other investment platforms
There seem to be two other such platforms that GoBeyond is typically compared with:
BAS (Business Angels Schweiz)
SICTIC
Ms. Baumann considers both of these as excellent and GoBeyond collaborates with them. It is good for business angels to have choice in angel communities they can join and many join more than one.
To better understand GoBeyond’s uniqueness it is perhaps useful to look more clearly into Ms. Brigitte Baumann’s unique background and investor philosophy:
Baumann was an angel investor for a number of years, from 2003 onwards, before creating the first GoBeyond angel group in 2008.
Angel investing is an asset class and should be approached as such rather than viewed as betting or as a charitable activity
An angel investor is not necessarily an exited entrepreneur or very wealthy individual with excessive business experience,time and money but rather, can also be an individual who is willing to learn how to invest. Said individual can advance from novice investor to lead investor, and at a later stage, to investor group coach and venture partner.
Do not think too local!
The service providers to angel investors are critical to an angel investor’s journey and success.
Besides, doing “good” It is of course great to do well. Angels can indeed make money!
A number of GoBeyond’s members are also shareholders of GoBeyond! They buy into GoBeyond’s philosophy of learning,investing and networking.
Next Generation and Diversity
Diversity is key: women and next generation! GoBeyond since its infancy has had close to 50% women as members – 10x the industry average. It also offers Next Gen programs with its legacy mix of learning, investing and networking. Thus, education while investing with others. The learning is not just via webinars and videos but also by working with experienced angel investors and investor group coaches. This, by the way, seem to differentiate GoBeyond from BAS and SICTIC. These two are perhaps somewhat less hands-on!
Training, now seems to have become a business on its own. Virtual! Global!
Baumann set up Efino to “fill the start up financing gap”. She feels that although entrepreneurial ecosystems have blossomed globally, their development is hindered for several reasons:
Investors often lack early stage investing training to understand the journey upon which they are embarking on
Entrepreneurs may not always know how to properly prepare or run financing rounds, and they also commonly struggle to develop diverse teams for continued innovation.
Efino’s mission is to fill this start-up financing gap by accompanying, educating, enlightening, coaching, and enabling the following participants:
Angel investors: to have a successful personal journey and investment portfolio
Entrepreneurs: to prepare, plan, execute, close and leverage financing rounds
Start-up board members: to prepare new and experienced board members to handle situations associated with being on a start-up board
Ecosystem players: to design, create and sustain ecosystem building initiatives
In collaboration with key local partners and stakeholders, Efino’s trainers are specialized in analyzing entrepreneurial ecosystems and identifying where support is needed, ensuring local players acquire the tools and knowledge to support and scale up the early stage financing ecosystem, and helping them acquire independence in the process. As such, Efino’s expertise is also in training and coaching future Deal Leaders, Group Coaches, Business Angels Networks Managers, and Start-up Board Members.
Cooperation: GoBeyond, Efino and Lorange Network
All are focused on stimulating better investments. All three have “matching mechanisms” between investors and entrepreneurs. All are focusing on learning as a key way to better investments as well as learning by doing. And learning is not only training or specifics, but also about building gut experiences! Finally, each sees networking as central to success - being part of a community enriches, diversifies, tests, challenges and evolves - the project or idea, the person and the company.
More about Brigitte Baumann
Brigitte Baumann has a portfolio of 41 investments (76 rounds). Brigitte is a keynote speaker, trainer and consultant and focuses on designing educational content for investors, Board members, entrepreneurs and corporates. In May 2015, Brigitte received the European Investor of the Year award from EBAN. In 2017, Brigitte was selected In EY’s European Winning Women Entrepreneur program.
In November 2016, 2017 and 2018, Brigitte is listed as one of Europe’s Top 50 Most Influential Women in the start-up and venture capital space and Top Women in FinTech. Brigitte is President Emeritus of EBAN, the European trade association for Business Angels and Seed Funds . Brigitte is Chair of the Global Deal Network at Young Presidents Organization (YPO), which currently has 28k CEO’s. She is currently work for the World Bank as expert trainer designing and delivering an investment readiness program in Georgia.
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