Over the past decade, the European early-stage investment market has been growing steadily, Statista shows. Even the pandemic didn't mislead it — this year, Angel Investment Network indicated the venture capital engagement across the globe.

Namely, there is a 6% increase in the number of angel investors requests along with a 7.5% fall in the number of startup pitches, which means the ratio of investors to startups is optimizing.

In other words, investment activity is gaining momentum, and impressive capital is no longer a must-have for those wishing to take part: nowadays, startups are looking for deep expertise and broad connections. By offering this, you can become a so-called "operator angel".

What are operator angels

The wave of IPOs, unicorn births, and cryptocurrency boost — all these factors contributed to more startup investment opportunities in 2012-2013. Top managers, SME owners, and crypto enthusiasts raised their first money and demonstrated that venture investments are not just for professional funds. 

Volume of business angels active in early-stage investments in Europe from 2011 to 2020, Statista

That is when micro-angels hit the stage — less sophisticated and wealthy but more adaptable, fast, and risky. As Tyler Willis, an active angel investor and co-founder of the data analytics platform Unsupervised, said, "They are a bit like free radicals in the venture ecosystem — more experimental and far less predictable or stable than traditional investors. They introduce more variance into the startup financing landscape."

This layer became known as operator angels. An angel investor, director of product design at Webflow, and design partner at On Deck David Hoang describes them as "...the amalgam of operator and investor typically working full-time at a company while investing on the side." 

There are also reasons why founders might want them on the cap table:

• Operator angels face the same challenges as founders and can share practical tips;

• Operator angels do not have overwhelming portfolios and are not as busy as traditional investors. They are likely to listen quietly and guide carefully;

• Operator angels invest at super early stages — generally, they have a large network, know the founders well, and can foresee important market trends;

• Operator angels are not about VCs and syndicates. They invest their own money and work individually or in very tight partnerships.

Before you start 

To get started as an operator angel, you need some tricks up your sleeve.

1️⃣ First of all, motivation. Early-stage investing is very risky and stressful, so it is better to have a strong motivation as an anchor, tells David. "For example, my purpose and motivation to invest in startups is to give back to the ecosystem that has been so helpful to me in my career," written in his blog. 

So ask yourself, what motivates you to get into investing?

2️⃣ The second point is capital. It is possible to get into angel investing with not-so-full pockets, as proven by the experience of Kim Fai Kok, a co-founder of angel collective Framtid. Citing him, "Founders look for more than money from angel investors. If you have unique experiences, networks, and skills, it won’t matter if you write a $5k or $500k cheque, founders will want to have you on board." 

Just advising does not mean getting nothing in return. The compensation is usually "...a fraction of 1% over an 18-24 month vesting term: 0.1% is common, 0.5% or more is often only given to someone with deep domain expertise and/or devotes a material amount of time, 1% is unusual but not unheard of," according to the experience of Susan Kimberlin, an angel investor and startup advisor.

So reflect on what real advantages would you bring to the table?

3️⃣ Then networking goes. This happens organically over time if one leverages referrals from other investors and founders, keeps contact with former clients and colleagues, and uses other social resources. "You’d be surprised how helpful people are if you’re genuine and clear about what you need help with. Of course, respecting people’s time and learning when to accept a ‘No’ is also important," Kim recommends. 

So remember everyone you meet and conjecture how you can be of service to each other?

What else: Update social media profiles from Linkedin to Twitter. Join thematic groups, follow trustworthy investors and promising founders, keep an eye on successful incubators and accelerators, and attend industry events.

4️⃣ Last but not least is involvement. According to David, the main ways an operator can help founders are the following: product review, customer experience, design feedback, mentorship, and introductions to other investors. "No less important is to get a sense of what you cannot help with either. Here are a few examples of what I do not help with: hiring, the actual design work, and anything I don't know," he adds.

So evaluate, what are your true strengths and weaknesses?

What else: Concretize the field you are willing to work with from the very beginning and keep up to date with the relevant market trends. Posting your expert content on social networks and getting feedback from partners and colleagues will be helpful.

What features Europe has

Regarding the specifics of Europe, for now, the biggest barrier to becoming an operator angel is the imperfections of the legal regulation system. Not all EU countries harmonized the law and beginners might face certain administrative obstacles while grouping. 

On the other hand, in the United States, for example, it is mandatory to get an accreditation to begin investing which is unlike most European countries where it’s accessible to everyone. 

“The European startup ecosystem is significantly segmented as opposed to one in the US. We have 27 countries with different jurisdictions and languages, which results in grouping founders and angels in local networks rather than operating on the EU-wide level,” says Dmitry Samoilovskikh, founder and CEO of Uniborn.