Episode Summary:

In this episode of First Cheque, Cheryl and Maxine dive deep into financial planning for angel investors—how to avoid running out of money, manage liquidity, and strategically deploy capital across investment cycles. If you're an aspiring angel investor wondering how much money you need to start or an experienced investor looking to refine your cash planning strategies, this episode is packed with essential insights.

They discuss the importance of staying liquid, diversifying check sizes, and the dangers of deploying too fast. Plus, they break down the realities of payback periods in startup investing, why you shouldn’t expect quick returns, and how power law dynamics shape investment outcomes.

Cheryl also shares her personal approach to budgeting for angel investments, alternative funding sources (like self-managed super funds and term deposits), and how investors can avoid the all-too-common mistake of running out of capital too soon.

If you want to build a sustainable angel investment strategy, ensure you're making long-term, high-return decisions, and avoid costly mistakes, this is an episode you don’t want to miss!

Key Takeaways:

00:00 – Introduction: Why budgeting and cash planning are critical for angel investors

01:49 – The golden rule: How not to run out of money when investing

02:37 – Why staying liquid matters: Power law, economic cycles, and risk mitigation

05:15 – Angel investing vs. stock market investing: Why you can't just sell down a position

08:04 – How Cheryl funds her investments: Breaking the myth of needing huge capital

10:00 – Alternative funding sources: Super funds, ETFs, term deposits, and more

13:41 – The importance of knowing your risk tolerance and financial boundaries

17:48 – Varying check sizes: When to double down on winners and how to strategise

23:15 – Why new angel investors should start with consistent check sizes

30:47 – Australian angel success stories: Real returns and lessons from Clarity Pharmaceuticals, Autra, and Instacluster

34:56 – Final takeaways: Planning, patience, and how to build a sustainable angel investing portfolio

Resources Mentioned

1. Angel Academy – The most comprehensive angel investing course for Australia & NZ: www.venture.academy
2. Aussie Angels – Cheryl’s platform for angel investing
3. Coventures – Maxine’s venture capital firm
4. Central Texas Angel Network (CTAN) – Study on angel investment returns
5. TechCoast Angels California – Report on long-term angel investing performance
6. Australian Angel Success Stories:

• Clarity Pharmaceuticals – 50x return for early investors
• Autra (Agil) – Acquired by Schneider Electric, 91% IRR
• Instacluster – 63% IRR after acquisition by NetApp

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Mentioned in this episode:

November 2024 - Galah Cyber

Angel Academy - Best online angel investing course in Australia and New Zealand

Don't forget to check out the best online angel investing course in Australia and New Zealand, Angel Academy. It's fun, engaging, and packed full of insights from experienced investors to help you get started or level up your angel investing, visit www.venture.academy

February 2025 - Angels Academy

November 2024 - Rocking Horse

November 2024 - Galah Cyber

June 2024 – Vanta First Cheque

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