How I Choose Companies to Invest In

1024 576 David DeWolf

I’ve been an angel investor since 2016, when DeWolf Family Ventures made our first angel investment in a wearables company called Valencell. Valencell and its founder, Dr. Steven LeBoeuf, showed great promise in a rapidly growing space. Steven has continued to make all the right moves in the years since, resulting in Valencell being a major player in building and licensing the technology that powers wearables space.

DeWolf Family Ventures has gone on to back several other companies in the six years since that initial investment in Valencell, and there are a total of 6 current ventures that we’ve felt so strongly about that we’ve chosen to invest in them. Many more opportunities have been put in front of me that just haven’t felt right. So, how do I decide which companies pass the high bar that I’ve set for backing with angel investments? There are 2 main things that I’m looking for, generally speaking. 

Early Stage Tech Companies

I’m a big believer in investing only in companies that operate in areas that you know and understand. Early stage tech companies are in that sweet spot for me, and it’s why I’ve invested in companies like InGo, Inco-Check, Capango, and Gravy Stack in addition to Valencell.

My comfort zone with early stage tech companies comes in no small part because of the time I’ve spent building from scratch a digital product development company, 3Pillar Global, that just celebrated its 16th anniversary. 3Pillar has had the good fortune to work with more than a handful of tech companies that have IPOd or been acquired for huge sums of money. Eloqua, Carfax, and PhishMe are just a few examples of companies we’ve served that have created massive value for investors, which has given me some keen insights into how to build a tech company that can rapidly grow and scale.    

Passionate Leaders With Humble Confidence

Even more important than what area the company plays in, I look to invest in founders and executives who have three traits: they’re wildly passionate about their company, they have the humility and wherewithal to pivot when need be, and they are looking to build companies that make a positive impact on the world. Quick returns and massive financial gains will never be the end goals of our investments.

On the humility front, this is such an important trait. So much of what we think we know when we start a company turns out to be wrong. It’s important that the germ of the idea has some solid roots and can gain some traction, but I’m looking to invest in leaders who have the emotional IQ to know that they won’t have everything figured out starting on day 1, or day 100, or even day 1000. Leading early stage companies is a continual exercise in tweaking, fine-tuning, and figuring out ways to make incremental improvements that end up strengthening your business and your foothold in the market. 

Wrapping It Up 

Sometimes, the simplest advice is also the soundest advice. One of my mentors always told me, “Invest in what you know.” That’s one of the reasons why, despite the bountiful hype the world of crypto startups has seen in the last few years, you’ll never find me investing in a crypto-related venture. I’m not saying there aren’t huge opportunities there; I’m sure there are. I am saying it’s not a world that I fully “get,” so I’ll continue to happily look for the right matches for me: early stage tech companies that have passionate leaders with humble confidence at the helm.