If you are wondering what an angel investor is, Mike Panesis is the man you should talk to. Panesis has been an angel investor for about ten years. He is the Chairman Emeritus of the Board of Governors of Tech Coast Angels (TCA) which happens to be one of the largest accredited angel investor groups in the country. He is also the head of the TCA’s Central Coast Investor Network, and a founding member of Santa Barbara Angel Alliance. As well as the Executive Director for Entrepreneurship at California Lutheran University at the Westlake Campus. 

Angel investors are “private investors that like to invest in startups but [they] don’t necessarily know them, you have to go find them,” said Panesis. They are often the investors that allow a startup to get started, which is the most difficult part for the business and the riskiest part for the investor.  

Angel investors are similar to venture capitalists except venture capitalists invest with other people’s money and are employees of a venture capitalist firm, whereas angel investors use their own money to invest with and are not professionals in the business. They behave similarly but work with no salary said Panesis, and they will not fund business plans written on the backs of napkins in a diner he joked.

There are many pros and some cons as to why startups take angel investors. They are often willing to invest again, they are a useful source of advice, and they have good connections to venture capitalists, potential exits and mentors. Some cons are that it can be time-consuming and distracting. 

There are different types of angels; individual angel, angel group, family office, equity crowdfunding program and super angel. 

Panesis is part of a couple of angel groups- this means those in the group invest by themselves, but they evaluate the startups together.  Most angels invest around $25K at one time, usually, they don’t pay more than that. For startups, it can be a lengthy process to eventually get to the point of being invested in, as the investors want to research and have a good depth of knowledge before putting-a-pen to paper. 

According to Investopedia, there are a few ways to invest in a startup either through ownership equity, convertible debt, crowdfunding platforms or angel investor networks to pool capital together. Return of Investment (ROI) is achieved with exit. To reach an exit there are multiple ways, it could be; initial public offering (IPO), acquisition, acquihire, later round buyout or share buyback. 

Panesis advises to set a limit for private investment, to take a conservative approach in publicly-traded stock, and diversification in your portfolio is very important. 

If you are interested in being an angel investor now or in the future, Panesis suggests asking these questions:  

• Have they got a good idea?
• Have they demonstrated they can sell it?
• Do I think they have the resilience to stick with it? 
• Is there a good market opportunity or potential?
  

Until listening to Panesis’s webinar, I had not heard of the term angel investing although I had a rough idea of how personal investments work along with venture capitalists. I think that as young people we should be aware of this type of investing and educate ourselves about it for a few reasons- in the future we may want to be angel investors or we may have a startup one day, particularly if you are interested in the business side. 

If you want to learn more about angel investing I highly suggest this website which helped me to understand it more in-depth. You could also learn more by working with a Certified Financial Planner (CFP) practitioner or reach out to the Financial Planning program here at California Lutheran University. 

About the Speaker:

Mike Panesis is the Executive Director for Entrepreneurship at California Lutheran University at the Westlake Campus. Panesis previously taught at a technology management program at UC Santa Barbara, where he also played a key role in the new startup incubator at Goleta Entrepreneurial Magnet. He has a wide background ranging from executive management to management consulting.

 Panesis is the Chairman Emeritus of the Board of Governors of Tech Coast Angels (TCA). This is one of the largest accredited angel investor groups in the country. He is also the head of the TCA’s Central Coast Investor Network, and a founding member of Santa Barbara Angel Alliance. Panesis has an MBA degree in Marketing from Rutgers University in New Jersey.

About the Author:

Rosie Baker is an undergraduate student at California Lutheran University studying Communication with an emphasis in PR and Advertising. She is also minoring in Creative Writing.

References:

California Lutheran University. (n.d.). Faculty Directory. Retrieved from 

https://www.callutheran.edu/faculty/profile.html?id=mpanesis. 

Ganti, Akhilesh. “Angel Investor.” Investopedia, Investopedia, 29 Sept. 2019, 

https://www.investopedia.com/terms/a/angelinvestor.asp. 

Watch the archived webinar below:

Mike Panesis – Webinar

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