Nicholas Slappey, program coordinator at TechTown Detroit, recently interviewed Catalyst Angel Program participant, technologist and angel investor DeWayne Williams. He shared his experience as an angel investor and insight for people looking to become an angel.
Tell me a little bit about yourself and your investing journey.
DeWayne Williams: I’m a network engineer. I’ve worked for a couple of technology companies that went through acquisitions. Going through that process as an employee made me interested in angel investing and venture capital. I did some research and started looking for angel investment groups to join. That process led me to meet Dr. Marlo Rencher, TechTown Detroit’s senior director, tech-based programs. She told me they were starting up an angel Investment group called Commune Angels. I have been a member of Commune Angels for about two years now. And then I joined TechTown’s Catalyst Angel Program.
What has been the most impactful part of the Catalyst Angel Program?
DW: The most impactful part has been the training we received from the Angel Capital Association. I think that was really beneficial in understanding angel investment as a whole. The ups and the downs, understanding how to read a term sheet, what the landscape is, and what type of companies get funded. You learn the rate of returns for angel investing and the percentage of companies that make it to exit. I think that having access to that training was extremely valuable.
Did you do any other type of investing prior to joining the angel investment groups?
DW: I have several things that I do currently, including Airbnb’s, vending machines, investing in publicly traded companies and other small businesses around the Detroit metro area.
Are there specific kinds of tech businesses you would like to invest in?
DW: Not specifically. I think due to my background I have more knowledge of the tech industry. Products that do connectivity, products that have a software-as-a-service business model. I have more experience understanding how the business works a little bit better than a lot of the other companies.
The reason I picked Commune Angels over other angel investment groups is because I wanted to focus on underrepresented communities and underrepresented founders. I know that they have trouble getting funding. They have good ideas and good companies, it’s just a matter of getting in front of the right people to help them get to that next step. That is one of the focuses of Commune Angels.
I know the Catalyst Angel Program is focused on getting more people from underrepresented communities involved in angel investing, too. That’s another reason I joined the Catalyst Angel Program.
Is angel investing important for the ecosystem?
DW: It depends, right? Of course, it is not for everyone.
It’s a separate asset class. I tell a lot of the founders that I mentor to remember this is an asset class and that it is not philanthropy. They should know that when we are critiquing, they should not take it personally. We’re looking for a return and we are not just giving you money.
For founders and startups, they need to have multiple avenues to get funding and angel investing is an avenue for both parties.
Is there anything else you would like to share about the Catalyst Angel Program, Commune Angels or angel investing? Any advice you would give to others seeking to join the program or thinking about becoming an angel investor?
DW: Yeah, make sure you’re doing as must research as you can. Angel investing is a high risk, high reward. You have to be patient because it’s early-stage investing. You are looking at minimum of three years but most likely somewhere in the five to eight-year range of getting any type of return. Pursue this asset class. If you are joining a group or thinking of investing individually, depending on your financial situation, you want to meet with as many companies, founders and startups as possible. Invest in a decent number of companies to get the return you are looking for. In other words, once you decide to do it, you want to make sure you are active, but do not feel the pressure to invest in a company that you do not feel comfortable with because it is a long game.
Just like with any wealth-building strategy, it is just a long game. If you play the long game, you’ve got a good chance of being successful.
Note: The interview has been edited for length and clarity.
TechTown Detroit’s Catalyst Angel Program helps emerging angel investors in the Great Lakes region who identify as Black, Latinx and/or women gain knowledge about investing, engage in curated courses through partner organizations and connect with other investors in local and national angel communities. If you’re interested in learning more, complete this interest form.