Angel Investor: The Driving Force Behind Startup Success, with Wlado Teixeira and Milton Daré
At the Epicenter of Innovation: From Silicon Valley to Tel Aviv, from London to Paris and Berlin, Angel Investors Spread Across the Globe, Concentrating in Major Tech Hubs.
According to estimates by The Angel Capital Association, over 300,000 professionals are active globally, forming a crucial foundation for the entrepreneurial ecosystem.
Expanding the spectrum even further, it is speculated that there could be up to 10 million active angel investors worldwide, opening doors for individuals with promising business ideas.
Having by your side a professional with market experience, whether as an entrepreneur, business owner, or executive, who is willing to invest a portion of their wealth and time into the growth of promising ventures, is an incredible competitive advantage.
To explore this vast universe and reveal what it takes to become one of them, or what a startup needs to receive this support, I spoke with two authorities on the subject: Wlado Teixeira, Executive Director and Board Member of GVAngels, and Milton Daré, Founder and Board Member of FEA Angels.
How Did You First Get Involved with the World of Angel Investing?
Wlado: In 2007, I began my entrepreneurial journey by identifying a market opportunity during my work in M&A. Along with two partners, we founded Vivere, which experienced impressive growth, increasing its revenue from 1 million to 37 million in just five years. In 2013, we sold the company in partnership with BTG Pactual, which had invested in Vivere during its second year of operation. Although I didn’t become a millionaire — and that was never the goal — I sought a comfortable life to dedicate more time to my hobbies, like diving, and, most importantly, to contribute to Brazil’s entrepreneurial ecosystem.
At 59 years old, I embarked on my entrepreneurial path, something unlikely and possibly unprecedented in Brazil. Since then, I have remained involved in the entrepreneurial ecosystem, whether as a mentor, judge, speaker, or investor. In 2017, I became engaged with GVAngels, which had recently been founded.
The members of GVAngels are alumni of Fundação Getúlio Vargas, known worldwide for its high standards in education. Over the course of nearly seven years, GVAngels has become a highly respected angel investor network in Brazil, and in 2023, it ranked first in Latin America in a global ranking of 50 networks and venture capitals published by CB Insights, a globally respected entity.
In addition to investing in startups, the members of GVAngels dedicate a portion of their time to helping the entrepreneurs of the invested startups through mentorship and networking. The GVAngels group has already invested in 60 startups and currently has approximately 350 investors.
I met Milton throughout my career and had the honor of speaking at the launch of FEA Angels. I did my master’s at FEA, and I am very proud to witness the success of FEA Angels.
Milton: FEA Angels was born from a personal and professional journey that began long ago, with experiences at Rocket Internet, XP, and Gympass. After my first investment, I realized the lack of guidance and structure in the angel investing market. Inspired by my connection with FEA-USP and the desire to support entrepreneurs, I launched FEA Angels, following an initial MVP startup model.
The rapid success and the need to balance my time led me to create a sustainable structure, funded by annual fees and managed by students from the School of Economics, Business Administration, Accounting, and Actuarial Sciences at the University of São Paulo (FEA USP), who are trained and equipped to handle the startup investment ecosystem. Collaboration with Wlado and completing a master’s degree were crucial in establishing FEA Angels as a reference in angel investing.
Today, we are proud to have around 400 members, 80 of whom are active, mostly FEA USP alumni, but we also attract external investors interested in supporting, mentoring, and investing in startups.
Does FEA Angels Still Operate on a Membership Fee Model?
Milton: Yes, today members pay an annual fee. This fee includes access to various events we organize, such as Pitch Nights, where startups present in each edition and have the opportunity to attract investors.
We stay up-to-date to provide knowledge and maintain our active community core, where we exchange information daily and regularly send news to our members about the startup market. Our focus goes far beyond financial investment; we invest time, knowledge, and act as mentors. These principles are also integrated into the mission of DOMO.VC.
How do you handle investors who have a lot of money but lack understanding of startup investing?
Wlado: I often say that investing is a science mixed with a touch of art. It’s not enough to just work with data; you need to have a feeling for it. With that in mind, my main condition for participating in the management of GVAngels was to be able to educate new investors. That’s why we created courses called Angel Academy for new members, featuring renowned specialists, not only from GVAngels but also from many other notable figures in the ecosystem.
During presentations, it’s common for people to ask about the profile of an executive who is likely to invest. The truth is that investors with a history in variable income are usually more open to investing in startups than those who prefer fixed income investments.
Some executives, members of GVAngels, with little experience in startup investments, seek guidance from more experienced investors. GVAngels members also have the option not to invest, even though they pay an annual fee. There are members of GVAngels who have been part of the group for five years and still haven’t made any investments. They haven’t invested, but they benefit from the startup investment experience of other group members.
Milton: Following Wlado’s line of reasoning, there’s an investment journey before becoming an angel investor, starting with fixed income, moving through more predictable variable income investments, growth stocks, and small caps, and finally reaching the stage of angel investing.
Another important aspect to consider is age. As we get older, it’s necessary to evaluate the risk and return of an investment. For example, it wouldn’t be wise for someone at 60 years old to invest all of their retirement savings in a startup.
What Is the Biggest Mistake Someone Makes When They Want to Start Investing?
Wlado: When someone is stubborn, they only lose. I’ve made a lot of mistakes myself, never asking anyone for advice, and it cost me a lot. Because I’ve been through this, whenever I sense that an entrepreneur or investor has this attitude, I try to warn them, showing them that they’re heading in the wrong direction. This requires special attention, and that’s exactly what we focus on in our mentorships.
Milton: The first mistake I see is people not understanding the dynamics of investing in startups in terms of the cap table, or in other words, equity ownership. Many first-time investors come in saying, “I want to invest, but I’ll put in 200,000 and I want 50% of the business,” but that’s not how it works.
The business is doomed from the start because it won’t be sustainable in the long run. Contractual, legal, and technical issues need to be studied. Additionally, the dynamics of large companies don’t apply to startups. I also always advise that expectations be aligned among the parties involved so that no one is caught off guard or ends up disappointed.
What Do You Look for in a Startup?
Milton: The first thing I consider is the person, as there needs to be an alignment of goals. We’ve made the mistake of investing in a well-known startup founder, but something didn’t quite fit. At the same time, we’ve had cases where businesses that we might not have given much importance to surprised us positively, thanks to a hardworking professional who was eager to grow.
Another important point to consider is the market size. If the niche is small, the risks increase significantly. If there’s technology involved, it’s challenging when there’s no co-founder with a technical background.
Lastly, there’s a topic I don’t see discussed often: reference checks on people who have worked with the startup founder before. Everyone has good and bad things said about them, so it’s essential to evaluate this carefully. If it’s an ethical issue, for example, there’s no way we would invest in the business.
Wlado: It’s crucial to analyze whether the startup has barriers to entry in the market. Regarding the cap table, as Milton mentioned, it’s important to note that if a startup comes into a pre-seed round already giving up 20% equity and needs to give up another 10%, we usually don’t move forward. We advise entrepreneurs not to give up too much equity in a round, as excessive equity dilution can deter potential investors.
What Attributes Must a Founder Have to Enter Your Ecosystems?
Milton: Before anything else, ethics are essential! I learned something from Marcelo Nakagawa, a professor at Insper, called Shoshin, a Buddhist concept that means “beginner’s mind.” The idea is to approach everything with a mindset of always learning, as if you know nothing. This perpetual curiosity is also important.
The best salesperson in the world is the one who is the most curious. The more they know, the more they save their own time and the time of the person they’re engaging with. This is enough to generate results, and it’s precisely what David Vélez applied in building Nubank.
Wlado: A seriousness of purpose and humility, but without subservience. To conclude, I’d like to quote a fantastic phrase by Warren Buffett that applies both to entrepreneurs and investors: “Always surround yourself with people who are much better than you!”
The Future of Startup Investments
After a deep dive into the experiences shared by Wlado Teixeira and Milton Daré, it’s clear that angel investors play a transformative role in the startup landscape. Their stories highlight not only the importance of financial capital but also the invaluable value of mentorship, networking, and continuous learning.
In the dynamic and challenging world of entrepreneurship, it’s essential to recognize that success is not a solitary journey. It’s a collaboration between visionaries who believe in the potential of innovative ideas and determined entrepreneurs who strive to realize their dreams.
Reflecting on the future of startup investments, I recognize that this is fertile ground for innovation, growth, and collaboration. Every new conversation and partnership brings us closer to a deeper and more enriching understanding of this ecosystem. In future posts, I will continue to explore topics that shape our world and challenge us to think, learn, and act. Until next time!
