SuperAngel #184: Charley Ma, first angel check investor attracting follow-ons from giants like A16Z, Coatue, First Round, Index, & Sequoia

0:02Is this a dream? No, it's not a dream I'm an angel. Why would God send me an angel? Because God knows that everyone needs a little coaching now and then. I'm loving angels. I saw an angel. All angels say. For a long day. Please say it's me an angel. With a smile on her face. Be in it together. But don't love me, Angel. I think that's why I'm an angel. Girl, girl. Hi, and welcome to the Super Angel Podcast. The go-to podcast for angels backing the next generation of European unicorn founders. If you love our show, do drop us a review, share it with your friends and join our community at eu.bc. Today, we're happy to welcome you to Charlie, the man responsible for building and scaling multiple enterprise software startups and leading their marketing, sales and customer success teams from zero to$200 million as their first revenue hire for companies such as Plaid, Ramp and Alloy.

1:02Charlie has also been an early investor in companies such as Stitch, Unit, Kodat, Move, Finch and many more. If you're an angel listening in and wanting to get closer to the European angel scene, do not hesitate to reach out to us. We'd love to connect and see how we can play together. And now, some words from our beloved sponsor. Verban from Carter is the easiest way to launch and run your syndicate. Verban's end-to-end platform automates your back office so you can focus on what matters, supporting the next generation of entrepreneurs and building your network. Angel investors are the fuel to innovation, and they've created the Atom SPV to allow for more deals, more ownership and less fees.

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2:13Charlie, welcome to the Super Angel Podcast. We are so excited to have you with us. Excited to be here. Thanks for having me. Thanks for joining the pod, Charlie. As a bit of a fintech fanboy myself, I'm so thrilled to have you on. And also so excited for your unique perspective, you know, being an active US angel, but also having looked at the European tech theme. So let's get started. Maybe you want to share with the listeners like your story and what got you into angel investing. Yeah, for sure. And I'll try to keep it short, but we'll see how it goes. My quick background, I was born and raised in the San Francisco Bay Area.

2:47My parents actually moved to the U.S. from China to go to school here. And I ended up starting my life in Daly City, specifically right outside of San Francisco. Long story short, I ended up going to school on the East Coast. First job out of college was actually working for J.P. Morgan. In a bit of a kind of funky role there, I actually joined an R &D team that was specifically looking at emerging technologies and payments. We didn't quite call it FinTech at the time, but I was the weird, you know, 21 year old analyst that was obsessed about payments and thought it was really interesting and was trying to find just interesting new companies and ideas.

3:24I would say quickly realized J.P. Morgan wasn't exactly the fastest moving place in the world, but did a lot of early fun work in Bitcoin and blockchain and sort of APIs and payments and ended up actually moving out to San Francisco to join a company called Plaid out in San Francisco really early on. So he joined as one of our first business people, I guess, and then ended up building a lot of the various kind of go-to-market functions for Plaid. But then long story short, and ended up going to spend a bunch of years there. And my actual motivation for angel investing was kind of interesting. One, I was in San Francisco and was noticing that a bunch of my friends were angel investing.

4:02And I was like, wait a second, I know you don't have that much money. And I thought you kind of had to have a lot of money to do angel investing. Like, how are you doing this? And I quickly realized it was, oh, they were investing in their other friends that were starting companies. And they weren't actually putting in a lot of money, right? I assumed that you needed to have hundreds of thousands of dollars, you need to be writing 25, 50K checks. And what I was realizing, no, if the founder wants to bring on the cap table, right, and they really like you, maybe you have a personal relationship where you have some value add, they're more than happy to bring on a one to two K, five K check and made a lot more approachable.

4:39And then the other side was, I was thinking about trying to find just potential new companies to join. I really liked early stage, sort of realized that, well, I was actually spending a lot of time talking to other investors and angels on who are the best performing companies in portfolios. Can you tell me what investor updates you're getting from there? And that sort of added the impetus of like, well, why not I start angel investing and use it as a way to build a relationship with founders and start to track interesting companies that I really like and potentially would think about joining. So that was kind of my entryway into starting angel invest.

5:12I guess now looking back, and we're going to go more into detail on your investment strategy in the next segment, but looking back to the angel investments you've done to date, are there any particular stories or any particular deals you want to share and maybe a favorite or most memorable deal? That'd be great. The first one that comes to mind, and hopefully it's a company that I think your audience is familiar with, it's a company called Kodat. So Pete and Alex, I actually met initially when I was helping to expand out our UK presence for Plaid. So at this point, I moved from San Francisco, moved out to New York, and was starting to spend time with both expanding out our New York office, And also I had some team members out in the UK office as we were trying to figure out, OK, how do we actually expand to our first international office?

6:05And one of the things that we spent a lot of time on to expand out our presence in the UK was just getting to know the sort of London fintech ecosystem. And one of the companies that a bunch of founders in London, the UK kept on bringing up was, hey, you guys should go and talk with the Kodat team. You know, there's a lot of analogies. They're building out a lot of API integrations into accounting data. They're providing this kind of B2B API. There's a lot of kind of similarities. And I think there's a potential partnership opportunity between Plaid and Kodat. And they're also just really, really nice folks and can get you guys connected into the ecosystem.

6:42And that ended up being 100 % true. So I ended up meeting the founders of Kodat out in London. We went out, I guess, to a classic London festivity, went out for a pub, went out for a few drinks. It's not a London festivity. That's just a London afternoon. Yeah, that's just every day, I guess. Right. And so, yeah, I ended up spending a bunch of time with them every time I would come out to London. Then at one point, Pete and team came out to New York and, hey, we'd love to just kind of catch up and hear a few things that are going. And every once in a while, I would just sort of help them on some various things across go to market.

7:16how to think about early sales hiring, how to think about marketing, how to think about running like an ABM account-based marketing type motion, all that kind of fun stuff, just stuff that we had seen at Plaid and that they were starting to go through for their stage. And was actually fortunate enough to then catch him in New York. And one of the asks he brought up to me was, hey, would love to actually meet some investors while I'm out here, right? We're doing really, really well. And we're opportunistically just starting to build relationships with investors. And one of our investors from Plaid was Index.

7:45We were a big fan of the Index Ventures team. They're obviously very, very big in Europe. And they've done a great job, I think, kind of building out their US team and US presence. And I said, hey, actually, one of the investors, Mark, who's on our board, happens to actually be in town in New York while you guys are here. You guys should meet. I think there'd be a lot to talk to. And long story short, I did that one quick intro, and then Index ended up leading Kodats, I think, Series B round. And at this point, I was started to get interested in angel investing. And I just kind of put the ask out there like, Hey, Pete, I know you're fundraising and this is happening.

8:17Could I put in a small check? And I think I was the smallest angel check on their cap table and we figured it out. But it's been an amazing partnership just working with them over the past few years and having that relationship grow. And they built an amazing team and amazing company there. On the one hand side, venture and tech investing is all about relationships. And on the other hand, we're all very, very busy people and we're really trying to have the biggest impact we can and make our time really matter. And as such, it's always a balance between, well, is this relationship building or is it actually more transactional relationship building, right?

8:53Because you know that you're also only really working with people that you're also probably going to do something with some time down the line. I'm wondering, how do you think about that personally? Because the way you put out your story here, it sounds all very organic. But at the same time, I'm sure you're as strategic a human being as I am. And as such, we're also making sure that we're spending our time the wisest. Could you share with me a bit how you think about your own relationship building and your investing career and all those things? Yeah, obviously, like the time with time is the most expensive asset that we have, right?

9:29And it's the one thing that you truly can't create more of. And it's extremely unscalable to leverage time, right? I think the first thing that I think about is probably when it comes to personal relationships, and that's both sort of friendships and professional and investing or whatever, I think I guess I tend to be, I want to say selective, but tend to be, I think, strongly opinionated on the types of people that I want to work with, surround myself with and go deep with, right? And so I do believe in the power of weak networks, right? And so I do have a lot of people that I will catch up with and will figure out the most sort of efficient way to catch up with a lot of those people.

10:08That tends to be around things like conferences, events. I don't do that many happy hours. I'm actually quite introverted and I don't like actually doing that type of thing. But dinners and stuff like that, right? Where I can spend a concentrated amount of time with a lot of interesting people and people that I think are really interesting or can provide an interesting perspective to me. And I'll figure it out kind of more scaled ways of doing that. And then for people that I want to spend kind of more one-on-one time with, I tend to be very, very, I think, directive and selective around that.

10:38And then this is something I actually learned kind of via angel investing, where when I first started angel investing, I had a pretty broad aperture. I wasn't really specifically interested in anything. I was kind of just excited about, oh, cool, I can angel invest. That's like all of a sudden it's sort of this like big unlock of that's just a thing that you can do. And all of a sudden you just call yourself, I'm an angel investor and doors weirdly open, right? The moment that you say you're an angel investor and you've angel into a few companies. And that was a bit overwhelming initially. And I was talking to a lot of founders, a lot of pitches and sort of realizing, oh, this is taking up a lot of my time.

11:13And I also had a full time job, right? And friends and family and everything. And so one of the things I specifically started to do that I think started to compound for me a lot more, particularly related to investing and sort of approaching it towards personal relationships is just being very, very specific around what are things that I tend to be interested and excited about and what is also my sort of value add and why should someone talk to me too, right? and I ended up triangulating early on around you know what at this point I'm really interested in just b2b fintech fintech infrastructure and developer tooling as the kind of three main categories I'm interested in also tends to be the three areas that I think I tend to have an interesting highly opinionated sometimes weekly held perspective around those ecosystems and start to kind of communicate out into the market these are the type of founders that I'm interested in and these are want to see.

12:05If it falls outside of that, if it's something consumer fintech, unless you think there's something super crazy and weird and I think it'd be kind of fun to learn, I'm probably not going to be super interested and it won't be the best use of their time either. So long story short, I think just for me, it's just been a lot more opinionated on what I get excited about, what I'm interested in and kind of filtering that funnel early on for both professional and also personal a little bit. What I was thinking while you were saying about kind of like weaker networks and then like a closed circle where you deepen relationships, in some ways, you know, you could think of angel investing as a way of like deciding for some of those, let's say, relationships to solidify them into kind of tighter networks.

12:46It's more like, okay, Pete is really great. I think there's so much to be done here. I really want to build a long lasting relationship with him. It's not a transactional relationship, right? And the moment you invest anyways, you're like, you know, super aligned on the really long-term upside of that business and of that relationship. It's also kind of potentially a way of like really, you know, coupling yourself closely to a node that you want to really deeply develop a relationship with, right? Yeah, 100%. And kind of take me a step back now before we go into the second segment around investment strategy and the likes.

13:17You know, having been angel investing for those last years, what would you say it's given you kind of personally and professionally? Besides, you know, some of the discovery and business opportunities you already mentioned. For me, at least it's given me a really wide aperture on, there's a lot of different ways as to how interesting and amazing companies are made, right? I think that oftentimes, you know, you read these investor stories, and you read sort of the lookbacks upon an exit, right? And different types of media want to portray, oh, well, there's a certain sort of phenotype or persona that the founders should look for what you should look at, right?

13:55And I think that's been really, really interesting to see. No, there's actually a lot of different ways to build a company. And there's no right way or wrong way. A lot of it is dependent upon the market, timing, competitive landscape, what the founder cares about, how they want to build it, ethos of the company, etc. And then on the flip side, I think from the investing perspective, there's a lot of different ways to pick an investment. I think for the longest time, I was spending a lot of time just trying to understand, well, how do people pick really good companies early? I'm still very much in the early stages of my investing career, I would say.

14:29I think there's some promising companies in the portfolio. It's a very long feedback loop. And I think that's something that actually took me a while to get somewhat comfortable with. It's particularly coming from an operating background, where I think from an operating perspective, particularly through operating in a high growth environment, you're often just really used to really fast feedback loops. I hire someone, fire someone, I'll roll out this activity. I'll see the results pretty instantly kind of flow through the company. When it comes to angel investing, it's great. I'll invest at a pre-seed seed and then, all right, let's take 10 years and let's see if it actually plays out.

15:04Right. And there are some things, milestones along the way that you can kind of see there. But the feedback loop is really, really long. And what I realized talking to a lot of other angels, a lot of their GPs, investors, is that there's no one way to pick a company. and you kind of have to be, I think, specific to yourself and true to yourself around what gets you excited about backing a company. And to me, it then also goes back to why are you investing and what drives you around investing and being really clear around that. And that, for me, has actually changed over the past kind of different years, depending upon what I've been trying to optimize for.

15:37Before going into the investment strategy segment, I have to ask you, because we're really going through a tough period in the market, right? And if you're just in one company, then you can kind of be boxed in and it's hard to see what is actually external factors and where we've gotten ourselves inside this company. But having that exposure to many different companies while being an operator, I can only imagine has been quite valuable. Could you put a few words to how you've been able to leverage that when you think about your own operator role and also bring that to the executive team? No, I think that that perspective is probably the most valuable aspect that I get from an operating perspective, right?

16:19Where in my day job, I always spend a lot of time with our founders, our exec team, trying to navigate through all the various headwinds and tailwinds that we've seen across the market and the macro, right? And that's something that we're often asking ourselves is, how much is this macro-based, right? Versus how much of it is self-inflicted and it's things that we can correct for and build for and figure out, right? One, I get this amazing testbed of founders to also bounce ideas off of, right? I think what's really unique about being an angel is that you're often also able to get a lot more information and play a very sort of different and special role for a lot of founders than typically their largest investors, right?

16:57Where for the largest investors, right, there's a bit more polish sometimes. There's sort of this interesting, I think, tension between how much information that you want to share about how you're feeling about the company, what's going well, what isn't going well, because they are your largest investors, right? And there's different motives and motivations as to what you want to tell them and why. As an angel, I tend to be pretty clear, right? Where, hey, I'm here to support you as the founder. I've already made my investment. I'm not trying to come in and box you out or do a takeover. I don't even have the power to do that, right?

17:31And so I think that having this amazing roster of just like really great founders to also bounce ideas off of and also tell them, hey, here's how I'm feeling, what I'm feeling? Do you feel the same thing? How are you guys approaching your business? And how have you been talking to your exec team has been just really, really valuable perspective for me to be also be able to share back to my team there too. Also, just the mere fact that you can identify with a lot of that, right? Puts you in a very different position to like a lot of big, like VC investors, I would argue, right? I hope so. Yeah, I like to think so.

18:03Oh, no, not about the VC.

18:10I would love to hear your take. Are you thinking about building a portfolio of 150 companies or do you want to go more focused, more concentrated? How do you think about your investment segments, your verticals, ownership? Do you care about that or do you go in whatever you have available in the month? I'm so curious to hear more. I would say there's definitely been phases around how I've approached, I think, investing and angel investing. And I'll kind of talk a little bit about that. And actually, I'm happy to also go into specifics. So I feel as a lot of angel investors actually don't go into specifics.

18:46And I always found that be really, really annoying. And I can go a little bit into the actual specifics on how I thought about it. Go as detailed as you, Glenn. So when I first started, great. I had this crazy unlock of, oh, you can do angel investing with smaller checks. That is fascinating. And if you just kind of ask founders, asking is the first part, right? Of being like, hey, I heard you're raising around or you think about raising around or the next time you're raising around. Or, hey, whenever you think about starting a company, I would love to be in that discussion and be an investor.

19:15Right. And this is my check size. So I first started off with at some point I made a decision. I was starting to save a lot of money to potentially go to B school. That was something that I was really, really interested in going. And at some point realized, well, I'm not going to go to B school anymore. The opportunity cost was a little bit, I think, expensive for me. And there's a lot of stuff I still wanted to do at Plaid and the other companies I joined that B-School just didn't quite make sense timing-wise. And so I'd ended up saving a decent amount of money. And I was like, well, maybe what I'll do is I'll take the money that was going to go into the money pit that is B-School.

19:47I'll take$100 ,000 of it, right? So I had the luxury of taking, being able to save up $100 ,000. I'm going to put it into the money pit that is angel investing, right? I'm going to be very clear of this is money that I expect to never see again, right? And the number one piece of advice that I've gotten from every single angel is that if you go into angel investing, think you're going to make money, you're not going to make money. Just don't, right? That probably isn't going to happen. It's really, really unlikely, just given the amount and number of investment that you can do and duration and portfolio construction and all that, you know, not the best way to make money.

20:21There's a lot more better ways if you just purely care about money maximization, way more interesting ways to go make money with$100 ,000, right? And so, great, I'm going to take this. But my framing as to why I wanted to do angel investing was, I'm going to use it to invest in my career, right? I was going to use the$100 ,000 for business school to invest in my career. How can I use angel investing as a way to invest in my career, right? And the way that I've approached, I've been very, very fortunate to join a few kind of hyper growth companies early on. A lot of it was luck. A lot of it was I had a thesis about the market, and I found this team that I was really excited about.

20:57And I remember thinking at one point, it is kind of crazy that we expect early employees to be really good pickers, right? Where, like I applied, I think I was the 11th or 12th employee or something. And I got really lucky. And the question I would often get is, well, how did you know? Like, how did you know they're joining this company? How did you know that they're going to be so successful? You picked them super early. And the honest answer was, I mean, I really believed in the company, but am I a better picker than, you know, Sequoia, than Andreessen? Like these people, they're professional investors.

21:28They theoretically see the best companies, the best founders. They have multiple years of being able to pick really, really early on. And I'm supposed to say I'm a better picker than them. Like that's kind of a ridiculous statement to say, right? But I want to get better at picking, right? Because as we talked about, the most expensive thing that I have in my career is my time and where I spend the vast majority of my life is going to be at work. And that's where I've gotten historically a lot of my sort of leverage from an income and career perspective. And so if I want to join an early stage company, I need to get figure out what is it that I get excited about for picking early stage companies and and how do I pick them and why?

22:07And so that was sort of my first North Star when it came to angel investing. So I took $100 ,000. The next thing I did was, okay, I'm going to divide that into 10. I'm going to do 10 angel investments. I'm going to add a little bit of duration in the portfolio. So I'll do this over a two-year period. Every single investment I do is the same check size. The other piece of advice that I heard from a lot of angels was don't vary the check size based off the excitement of the investment. It should be either a yes or a no and keep this check size the same. You have no clue which one's actually going to work out.

22:37And oftentimes, the angel investment that you're a marginal yes on could have oftentimes it's the most successful angel investment versus the one that you were extremely excited about and you shouldn't vary the check size based off the level of excitement keep it consistent right so you're keeping that as a control and so i did that i took hundred thousand dollars divide that by 10 that's 10k per range for investment right and i started to do angel investing the first set of investments that i did were people that i knew really well people i built relationships with friends that i knew that were starting companies and so the The first set actually was a bit of a hodgepodge of companies, mostly friends and people that I knew.

23:16I ended up actually deploying that capital a lot faster than I probably wanted to. I did it within a year. And at the time, I think I was just very founder-orientated. I was a very founder-first angel investor where, hey, if I just got excited about the founder and how they got to that space and what they're interested in, what they're excited about, I tended to be, you know what? I'm down to support it. I'm in. We'll love to put 10K into whatever round is happening, right? Or whenever you do think about a round, like I'm in, right? Some founders, I'd be like, I don't even care what you're working on.