How to Become an Angel Investor with Domingo Guerra

For many tech founders, angel investing is the next logical step in the startup journey.

Angel investing remains a lucrative endeavor with one study finding a median return rate of 2.7 times the investment. 

The past few years have also given rise to angel investment syndicates with 80% of angel investments being syndicated with other investors.

And despite the overall slowdown in startup funding, 2022 was a record year for angel investors. Last year saw 4,679 angel or seed deals worth a combined total of $36.2 billion, an increase from 4,422 in 2021.

But making the transition from founder to funder means understanding the other side of the deal table. On April 6, Founders Network hosted the first in a series of events on angel investing. The event featured a panel discussion where angel investors provided insights on how to become an angel investor and the benefits for startup founders.

Among the speakers was Domingo Guerra, a tech startup founder and angel investor. We talked to Domingo about his experience as a startup founder turned angel investor and his advice for other founders considering the move.

To learn more about how to become an angel investor, check out our video from the event and see if you qualify for membership to join Founders Network.

Advisor Turned Investor

In 2011, Domingo co-founded Appthority, a mobile cybersecurity startup. He served as president until 2018 when Appthority was acquired by Symantec.  After the acquisition, Domingo went on to lead the go-to-market strategy for Symantec’s Endpoint Security division. During this time, he got into angel investing to maintain a connection with the startup ecosystem. He has now rejoined the startup life, and currently serves as the EVP of Trust at Incode.

“I didn’t want to lose touch with the startup ecosystem. So I started advising other startups. I found that my experience as a founder allowed me to share learnings from my own successes and failures. Later, I also started investing as well,” Domingo says. “ My personal experience in the space allowed me to bring relevant  advice along with the investment. At first, it was really just an extension of advising, but then gave me a little bit more skin in the game in the startup’s success.”

Taking the First Step

While becoming an investor might be daunting, Domingo says he didn’t experience a steep learning curve when making the transition. He also says founders considering angel investing shouldn’t be put off by the high price tag often associated with startup funding.

“It might seem intimidating from the outside because you think you have to write large checks,” Domingo says. “But especially with syndicates or angel groups where you’re able to pull investments with a large number of investors,  I’ve seen investment deals that the minimum is only a few thousand dollars, which again, it’s money. But it’s not like the VCs that are writing millions of dollars, right?  So it’s more accessible to folks to come in.”

Diversifying Your Investments

At first, before Domingo established his investment thesis, he said it was tempting to want to invest in everything. 

“Being an entrepreneur, being a founder, you’re very optimistic in general,” Domingo says. “You want to see folks succeed and you try to find the value in every idea you hear. But you realize very quickly you can’t invest in everything unless you have unlimited money.”

Now Domingo tends to invest in security and enterprise Saas because those are the industries he has experience with. However, he also recommends diversifying your angel investments so that you don’t miss out on opportunities outside of your expertise area. 

“I realized that if I only focused on the segments I’m familiar with, I was going to miss out on a big part of the market,” Domingo says. “So I’ve been expanding into other verticals or other focuses as well. In general, I try to find something where there’s a space that’s being disrupted or a technological breakthrough enables a business model that wasn’t there before.” 

To learn more about how to become an angel investor, check out our video from the event and see if you qualify for membership to join Founders Network.