We're back with another round of interviewing some of the most prominent angel investors right now.
Meet Amber Illig, founder and solo GP at The Council, a pre-seed VC firm investing in software for fintech, healthtech, vertical SaaS, and legacy industries. She also runs one of the most active angel communities operated by women and for women!
Amber has an extensive background as an operator at companies like Apple, Snap, Eli Lilly, Cruise, and Atmos. In our interview, she shares how that's shaped her angel investing journey and how it wasn't something she accidentally fell into, like many angels do.
At the moment, I'm a General Partner at the Council Fund. We are focused on backing proven operators as early as possible in their journey as they build software for existential industries like construction, logistics, manufacturing, and healthcare.
These are all industries that we as humans depend on in the year 2023. But they haven't necessarily received the same amount of VC funding and tech talent as the core tech industry.
So I'm really passionate about vertical software solutions built for those areas and then many horizontal solutions that will serve as great equalizers.
I started angel investing and did that for three years before I launched this fund. So in total, including my angel track record, which was 30 companies, and then fund track record, which is 14 companies, I've now invested in 44 companies, all pre-seed or seed stage.
Before I went full time into investing, I was also an operator. So those three years that I angel invested before launching my first fund, I was doing it outside of my full time job.
Basically I spent the first half of my career in consumer electronics and medical devices, interfacing with logistics, supply chain and manufacturing at Eli Lilly, Apple, and Snap.
In the second half of my career, I kind of pivoted to software and go-to market while still at Snap and then joined Cruise for three and a 3.5 years as they scaled from 400 to 2500 employees. After that I was head of ops at a startup called Atmos, focused on construction and home design.
I got into angel investing as soon as I could afford it. I knew a long time ago that I wanted to go into VC someday and that I would need to build a track record if I didn't want to completely start over.
I waited until I had a couple of high growth moments, so I was able to carve off a piece of my personal net worth and just invest that over 3 years into 30 startups. I did around 10 a year and I did small checks only to figure out if I was any good at it, and to see if I loved it enough to do it full time.
As you can see, I didn't just fall into it, which I do hear a lot of people just accidentally made their first angel investment and then got addicted to it. Mine was a little more calculated, I will say.
As angel investor, you can be pretty opportunistic. You don't have to have a really specific thesis, you can look at 1000 deals over the course of a year and you could invest in a consumer deal that could be a social media platform, and then you could invest in an enterprise SaaS software.
But when you start launching a fund, you're investing other people's money, not just your own. And so there's a whole element of fundraising and then making sure that you're being responsible from a fiduciary perspective and that you're delivering on the vision that you got people excited about when they invested in your fund.
So, for instance, we're very focused on B2B for these legacy industries, so it would be weird for me to all of a sudden invest in a consumer social platform.
There's a reason why I chose my thesis, because that's playing to my strengths and that's where I want to be investing.
Then there's a whole business building element to it as well. So you're still working with founders all the time. You're still reviewing pitches, doing second calls, doing due diligence, just like you would as angel investor. But the level of due diligence that you do goes up a level again because you're investing other people's money. It's a full time job.
You have a portfolio construction model that if something happens, you need to make sure that you're revisiting that and that it fits with everything that you're currently working on. You are making sure that all your documents have been reviewed by legal. You're filing taxes. You're making sure that LP commitments are coming in on time because some of them are on a capital call schedule.
So there's a whole background of being a fund manager that isn't just investing in startups.
If you look at these different industries, like construction, manufacturing, logistics, healthcare, education, and transportation, they’re the most existential industries that we have as a civilization. Those ones represent over 25% of the US. GDP (conservatively).
I did the math on the backend, and each one of them is a market in their own right - a massive market.
So if you can find a software with an incredible founder that's building it in one of these industries and back them at pre-seed when the company is very young and the price is really approachable, and then they end up tackling even a tiny percent of one of those massive markets, the opportunity could be huge.
So that's our thesis. We want to get in as early as possible and write checks into those companies.
Our goal is to get pro rata in every deal that we do and then build up an incredible relationship with the founder to actually earn super pro rata and then offer that up to our LPs in the form of SPVs and follow on in specific scenarios from the core fund.
At first when I'm just kind of getting to know the founders and trying to figure out whether I want to invest in the deal, I'm focused on the deal itself. Of course, I want to be helpful to them, so as soon as I know I'm definitely wanting to invest in this deal, or when I start getting to 80% or 90% on it, I know I have to prove my spot on the cap table.
That's when the power dynamic kind of flips and I want to show them that I can be as helpful as possible. I start sharing my network with them, and if I'm getting close or have just committed, I start to list out 8 to 10 different investors that I could introduce them to.
I make those introductions within 24 hours of them responding, and that's really how I get involved at the very start. But post investment, I spend a lot of time with them coming up to speed on different changes that they're implementing and what their top needs are and where I can be helpful.
I'm constantly looking within my network to see if I have someone to fill a role that they're looking for. Luckily, I have an operator network from my own background, but then I also lead a community of 100 operator angels who are working at companies like Square, Slack, Airbnb and Lyft, which means I can look for both customers and potential hires.
I try to backchannel with bigger VCs that I know would need to lead those next rounds to figure out what they will be looking for and feed that information back to the company.
I want to be a resource for them and somebody that they're not afraid to tell that they're having a problem.
Definitely. The top two qualities that I look for in founders are: resilience and vision.
Resilience is the reason why I target proven operators, which can mean a lot of different things. It doesn't have to mean you are a VP of Dropbox or something. It could be that you were early at a startup or you helped build out a function for the first time, you were the first customer support person, you talked to every single customer at your last company and now you're starting your new company.
I like that because that means that as a founder, they're not going to run away the first time an obstacle comes their way. And within resilience, I also like to see that they have a personal tie to the mission they're building for, and not just because they saw a huge monetary opportunity for arbitrage.
That's not that compelling to me because I know they're not going to be as resilient when they face an obstacle if they have no personal attachment to the problem that they're solving.
Since I'm investing so early, I'm actually in it for the long game. So I want to know that they want to spend the next 10 years of their life on this problem and they see the world as a different place with their solution in it.
I run the angel community because once the fund invests in a deal, or if we're looking at a deal, we actually benefit from sharing it with experts in our network and getting their opinions on the deal.
Many times the founder is open to sharing it with investors, and for angel investors to get on the cap table and help them fill out their round after they have their lead.
We share select deals that the Council Fund has already invested in with the angel network, and that's advantageous to basically everybody involved.
One is Respell.
Respell is a horizontal B2B solution, but because it's related to no code, I think that it's going to positively impact industries that have less technical talent. It’s allowing people to string together multiple AI large language models to create their own workflows and apps which means you don't need to be a coder to pull together some complex workflow to get your job done faster.
I'm really excited about that one. I was the first check in the company because the founder and I actually used to work at Atmos, the last company I was at before I went full time into VC, and he was a co-founder there. This is his second or third company.
Another one is Mate Fertility.
People are having babies later in life. There are only limited fertility clinics throughout the United States, in major cities primarily. So there's all these fertility deserts where you can't find a clinic to get IVF, but so many people need it, so they'll travel hours for an invasive procedure where you should really be close to home.
This company has worked on a platform and an upskilling-like offering to ob-gynes to help upskill them into being able to perform fertility treatments in their existing facilities and then managing those patients through their platform.
The third one is Sienna, which is building an AI customer support platform.
Their AI is so good that people are literally telling them that it deserves a raise. They don't even know that they're talking to an AI at all. I think they've built something really special and they allow brands to uniquely design the voice that they want when they're communicating with customers and their customer support.
I’m really excited about all three of these investments. They're all very recent deals and several of them have already had some incredible milestones I can't share yet that have come up since then. So you'll probably be hearing more about some of them!
Start small. No matter how much capital you have, I would definitely start with small checks and maybe write checks into syndicates at first, because then you can rely on somebody else to source the deals, somebody else to perform diligence on the deals and make sure they are performing some levels of diligence, because not all syndicate leads are doing that.
But at least you can see how they've laid out a memo and how they're thinking about the deal, so it just starts to build that structure into your own mind when you're looking into a deal.
The reason I say start small is because people inevitably always make mistakes throughout their entire careers as investors. But at the very beginning, you learn some lessons that you take with you for the rest of your career.
The lesson that I learned was sometimes you meet somebody and it's like the perfect founder and you really want to invest in them, but you're not totally sold on the business. Or you meet a founder who's working on a business you're obsessed with and you've been waiting for somebody to build this, but you're just not 100% sure about the founder.
I really believe that both have to be right at pre-seed. You'll never know exactly what the business is going to look like at maturity because so many things could change, but you have to be bought into that initial vision and that founder 110% on both sides.
One person that I've been tracking and in contact with for a long time on this end has been Oliver Cameron.
He was the founder of Voyage, which raised over $30 million from firms like Coastal Ventures and ended up being acquired by Cruise. Then he was VP of Product at Cruise after that.
We overlapped in my time at Cruise, and when I left, we stayed in touch because both of us were investing. He's still angel investing, and he purely invests in deep tech, AI, and machine learning.
So when I think of who's the top person that I want to share a deal with in machine learning or AI, that's who I think of. The ultimate person that I think if I was a founder, I'd want on my cap table.
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