Angel investor is just one of the many exhilarating titles that Laura has. Along with being a brilliant angel, she is also a founder, innovator, and fintech whiz. In other words, she is a force to be reckoned with!
Laura is the co-founder and President of Alloy, and in 2021 she was recognized by Crain’s New York as a Notable Woman on Wall Street. Before Alloy, she led Business Development & Partnerships at an ACH payments startup and was on the Research & Investment team at Imprint Capital Advisors.
Like many angels, her journey started somewhat unintentionally. She was exposed to her first angel investment opportunity (which we discuss below) through her vast network and experience in fintech.
The first angel investment that I ever made was probably my most lucrative one, for now.
I got started because an investor from Better Tomorrow Ventures reached out to me, and asked if I was interested in a deal they were doing because they thought I was already angel investing.
At that point it had never even occurred to me before that I could, or should, or would angel invest. I told them I didn’t have much money to invest because I’m a founder, but they said small checks were fine and so I dove in. I thought the founder of that company was very compelling and it seemed like a good opportunity.
The company was called Unit Finance. The founder, Itai, was a second time founder, and his first company in Israel had been quite successful. I felt excited because he was an experienced and interesting founder. On top of that, I was familiar with what he was building (something not a lot of people were building) which was banking as a service platform.
I invest in fintech because it's where I come across deals the most, especially since founders will come to me through my network which is almost entirely in fintech. They’re also easier for me to evaluate because I know more about the space.
There are two things: my network and fundraising. My network is very specific to fintech, so it’s not always helpful to all founders.
As a founder myself, I’ve done a lot of fundraising so I love to help with fundraising strategy and pitching investors. I can show founders how to go through the process, what their pitch should look like, and then who to actually pitch and how to strategize that part.
My first angel investment was in August of 2019. I personally do it as a hobby, but if you’re doing it semi-professionally, then that’s totally different. I think it’s very distracting to be a super active angel investor if you’re a full time operator as well as a founder.
If it’s just making intros, that’s pretty straightforward, but what’s time consuming is when you start actively taking calls, and for example, you get on the phone for two hours to brainstorm. But in my experience, most founders don’t ask for that.
Overall, I don't think there's necessarily a right time in anyone's journey - it depends completely on how your brain works. For me in particular, scaling Alloy is a very different challenge from starting Alloy. In many ways, I really missed the early days of starting Alloy, and for me, angel investing is a way to do what I loved doing in the early days.
My hot take is that it's not about being smart in finance. I had done some investing before in a professional sense, but I don't think being good at investing helps you when it comes to angel investing specifically.
So much of it is luck and access and putting yourself out there. If you are lucky and can access a company at the right time, that's amazing and you're going to go for the ride. But it's not because you have some interesting financial background or intellectual ability that someone else doesn't.
From what I’ve seen, if you look at it from the traditional finance lens, you might overemphasize the role that market size plays, for example. And you might underestimate how important founder characteristics are.
Something I really value is what the first investor in Alloy, Jenny Fielding, taught me. She talked about coachability of founders - the ability to take information and react to it. That really resonates with me even today where if you sense that founders are just super hardwired for one version of the world and aren’t going to be able to be creative and adaptable, it's not going to work out very well.
So one of the things I look for is adaptability and coachability, and if that doesn't show, that’s a deal breaker. Your first two years as a founder until you get to product market fit is to learn and adapt.
If you're not learning and going in with an incredibly dogmatic perspective about the exact solution for the exact problem in this exact market, then you’ll have to be extremely lucky to be successful.
Yeah, there's a startup founder called Angie Moody that I met at a cocktail party. I talked to her for only two minutes, but I found her so compelling. She’s the founder of a company called Ruby Money.
The idea resonated with me because it's a financial platform that deals with taxes for freelancers, and since my husband is a freelance writer, I totally understood the pain points she was aiming to solve. I started hounding her over email afterwards and eventually invested in her startup.
Showdrop is one. In fact, it's a special one to me because the founder is a very good friend who introduced my husband and I many years ago.
Then there’s a company called Omella and another one called Sunfish, and I’m a fan of both of them.
Middesk! We work a lot with them at Alloy. The founder is brilliant and the product is brilliant. We use it a lot and we work with tons of people who love the product.
I think Maia Bittner is an angel I look up to a lot, in part because she's really transparent on Twitter about her journey.
I also really admire Addie Lerner. She's one of the people who left to go do a solo fund as a GP and has raised a good amount of money.
I'm always excited about fintech, but fintech had a hard year. Last year, anything and everything was getting funded. Now, you'll see more high quality companies in fintech getting funded, so it's sort of good and bad.
I'm also excited about enterprise stuff, where I think you're seeing the tech industry is dealing with reduced headcounts. There's a sort of pressure to be more efficient and I think software can play a really big role there.
Don’t overdo it on market size! I think it's really easy to get caught up and think the market is too small. The reality is if you back really smart and gritty founders, they're going to figure that out and do something else. So I think the market size is an easy way to get lost.
There's a really good blog by Lenny Rachitsky about angel investing where he says that looking back at his portfolio, he realized that conviction in a deal doesn't mean it's going to be a really high quality deal (at least in his case). My takeaway is to say yes to lots of things, and don't get too caught up with your own assessment. A lot of it is luck and access, and being in the right place at the right time.
I'm sure part of it depends on a bull market, too, versus a bear market. Last year (2022) everyone looked like a genius with their markups, and maybe this year everyone will look terrible with their markdowns.