Angel Profiles: Milton Sigelmann

I am a retired mechanical engineer with many years of experience in product development and project management.  I spend my time on adventures, special projects, and investing.


What attracted you to exploring angel investing?
Investing in startups seemed like it would be a lot of fun and it has been.  I get to search for good opportunities then dig in to make an assessment of whether or not they have a decent chance of success.  Angel investing gives me a platform to invest in meaningful companies, meet interesting people, learn new things, and hopefully make money.

If you’re still angel investing, where do you find most of the companies?
Networking, networking, networking.  Through various friends and acquaintances, I have been able to connect to companies and groups to get pretty good deal flow.  SAC was a good starting place.  If anyone knows of a good company, let me know!


What are the top three things you look for in companies where you invest?

• The team has to be awesome.  That doesn’t mean that they won’t have flaws or gaps but they need to be passionate, competent, and coachable.  If they can’t execute or hire the people who can, they will fail for sure.  It’s hard enough even with a great team.

• The product or service has to solve a problem and someone has to be willing to pay for it.  Also, it has to make sense to me.  If I don’t “get it”, I don’t buy it.

• The business proposition needs to give me a return that is worth the risk.  I’m shooting for an IRR of at least 25% across my entire angel portfolio.

How did you incorporate angel investing into your overall portfolio?
I’ve always had a portion of my portfolio be high risk.  Startup companies are now a big part of the high risk portion.  Because there is also the possibility of high returns, I put much of my angel investments into a self-directed Roth IRA.

What have you learned since you started angel investing?
No one has proven that they can consistently pick the winners.  So my approach is to pick the losers.  Then I don’t invest in those companies!

What do you wish you would have known before you started angel investing?
The exit timeframe is critical to success.  This is obvious but it needs to be emphasized in all investment decisions.  The longer an exit takes, the more time for various bad things to happen (dilution, market changes, time value of money, etc.)

What space are you most interested to invest in next?
I invest in anything that meets my criteria that I think the product or service matters, I understand it, and it will make me money.  So far, this has led mostly to investments in life sciences and hardware companies.

What resources should entrepreneurs and angels use to learn more?
There are a number of really good books and websites that can help Angels in all aspects of investing.  Examples are Angel Investing by David Rose, Get In Get Out by Troy Kauss et al., and the ACA website.  Ignore statements that indicate an Angel needs to have a background that allows them to negotiate a deal, run a company, provide critical contacts, etc.  The only prerequisites should be interest, risk tolerance, and intelligence.

Angel profiles: Introduction

Seattle Angel wants to open up more opportunities for angel investors to find and invest in more great invest-able companies in the northwest.To that end, we're focused on improving the entire ecosystem. The education events that Seattle Angel puts on are geared towards educating entrepreneurs and angels about the things that are most critical to know to make great investments happen. The angel conference and angel fund are designed to be a collaboration focused investment vehicles. We also encourage investors and entrepreneurs to find the best people to invest with out of all the options available in Seattle. 

Over the next few months we'll be profiling some of the angel investors we've worked with who have invested through the angel conference or the angel fund. Some aren't investing any longer, others have found different people to invest with, and others use the angel conference and angel fund as their primary investment groups.

Here is the first angel profile in the series, if you want to be added to the list let us know.

Tim Shoultz

Tim Shoultz invested in a few of the Seattle Angel Conference programs and added a lot of value to the process. With his focus on Commercial Real Estate and building his new investment firm The SMARTCAP Group, he's found Keiretsu and the Puget Sound Venture Club as better fits for his angel activity.

What attracted you to exploring angel investing?

Starting out Angel investing seemed attractive to me as a way to explore new investment ideas.  Being at Microsoft for 15 years and building a portfolio of stock, over time I realized this was not an investment platform I truly enjoyed.  I had spent the later 5 years building a real estate business and really enjoyed that avenue of investment.  To me, Angel investing was a great way to network with other people and see new opportunities and companies to both learn from as well as invest in.

Where do you find most of the companies?

Currently I am a member of Keiretsu and am looking at joining Puget Sound Venture Club. I’m attracted to Puget Sound Venture club as they are a locally based angel group.  To me, Seattle is important.  It is important to my real estate portfolio, it is important as part of my life and I want to see it thrive.  The idea of supporting local companies rather than companies from other regions is important to me.  I want to see Seattle continue to grow as a hub of angel investing, technology and business development.  

What are the top three things you look for in companies where you invest?

I prefer to look at companies I am passionate about.  There are a TON of interesting companies out there, but when you know nothing about them it is really hard. I have been in Technology for 15 years but that is not truly where passion is.  My passion lies in Commercial Real Estate and more tangible business models.  I also like the idea of the company being local to the northwest.  Again, supporting the Seattle economy is an important aspect to keeping my backyard healthy and thriving.  Strong management is critical to a business being successful.  I think this is prob become the number one criteria for me over the last several years. 

How did you incorporate angel investing into your overall portfolio?

Slowly.  I’m still new to the space and it is really easy to get excited and sucked in quickly.  There are a lot of interesting companies and trying to learn how to invest in them in a methodical, non-emotional way is a challenge.  I believe in taking my time and building a portfolio of years, not months.  

What have you learned since you started angel investing?

I think one thing that is really interesting for me is that when I invest in Real Estate I am very good at keeping emotions out of the analysis process; It is a numbers game. With a startup, that can be more difficult to do.  I don’t own the underwriting model for the business and I don’t own the vision, so learning to look at a business in a different way is important.  You can’t look at it purely for a numbers perspective, there is so much more.  The management team is prob the most important aspect.  A great idea with a bad team is doomed to fail, but a great manager can often make even a mediocre idea profitable.  When you combine the two, great ideas and great leadership, that is when you can see real success.  

What do you wish you would have known before you started angel investing?

This may sound odd, but nothing that I didn’t know, which was very little.  This is about learning and growing as an investor, business owner and a person.  To me, a lot of the fun is meeting amazingly smart people and feeding off their knowledge.  That is what makes you better and allows you to formulate your own opinion over time.  

What space are you most interested to invest in next?

Right now I am in primarily focused on growing my own business ‘The SMARTCAP Group, Inc’ with my business partner Joe Ollis.  I think as I continue to build my investment company I would like to invest in companies that I feel are symbiotic.  Something that I can really add value too and that will help grow my business along with the business I’m investing in.  To me this would be very appealing.  

What resources should entrepreneurs and angels use to learn more? 

This is a hard one to answer.  There are a lot of resources out there and they all have an opinion.  It can be tricky to find the ones with the right options.  I think reading is crucial to success and reading a lot.  The great thing about reading books, publications and articles on your subject and business development is you get a wide array of advice an opinions.  This allows you to think about things in a pretty broad sense and really formulate your own opinions and how you want to run your company.  Be selective in who you take advice from, but listen carefully to all that is given.  I think almost everyone has a nugget of information but there are only a handful that make great mentors.  When you do find someone that is amazing, ask them to be your mentor.  In my experience you almost always get a ‘yes’ from that question.  Don’t expect anything specific out of the mentorship, just try to learn.