One of the first companies I had invested in as an angel investor was GoMechanic. The company today is a household name in supplementary auto services with a network spanning 125 workshops.
When the company recently raised $5 million from venture capital firm Sequoia Capital, I was proud to have been part of its journey.
As one of the first investors who discovered and believed in the company, it was great to see the traction and scale it had achieved.
It also led me to possibly one of my biggest lessons as an angel investor so far. I had an opportunity to reinvest in GoMechanic shortly after my first round of investment.
However, at that time, I could not pursue the investment as the valuation was five times the previous round.
Shortly after this, the company went on to raise capital at a 3x value in nine months.
This led to my learning that short-term focus can cannibalize long-term returns.
As investors, while we need to have a strong grip on numbers, term sheets and look at investments with a data-driven approach, it’s also key to some time making bets beyond the norm.
My instinct had guided my first investment in the company and I wish I had continued to listen to it and made the follow-on investment.
Having learnt a valuable lesson, I have now developed a framework, which allows a certain percentage of my investment to be based purely on instinct.
Sometimes it works, and sometimes it doesn’t. The onus to make these bets is on us as investors.
As part of a bustling startup ecosystem, it’s our duty as investors to encourage and nourish small ideas that could end up becoming massively scalable startups.
A section where investors talk about missed opportunities in start-up investments