The angel investor

Elissa Freiha is only 28 years old, but she has already invested in her first ‘‘unicorn’’: a company that is valued at $1bn or more. She talks about why she is championing female investors in the UAE, and how entrepreneurs can improve their pitch when trying to secure money.

What does an angel investor do?

We invest in companies in exchange for equity – but more than just investing finance, we also tend to invest time, experience and connections to help start-ups grow.

How did you get into this?

I'm very lucky. My family primarily invests in public equities and real estate and I managed to get an allocation from the family to start investing in venture capital both in the US and in the Middle East. I saw it as a bit of a life-hack,

where, as a young 23-year-old woman, I could circumvent the idea that you have to work your way up to gain enough credibility to have a voice and to implement change. Angel investing allowed me to immediately get involved with a company, give them finances, but also provide my expertise in marketing and PR – and some relatively valuable contacts that they could utilise to grow their business.

How similar is it all to TV’s Dragons’ Den?

I'm a big fan of Shark Tank and Dragons’ Den on TV; they are a very glorified, edited version of what we do. There’s a lot more that goes on in the angel investing process beyond what you see on the show. After the short presentation on Dragons’ Den they make a quick decision, whereas angels – at least in the Middle East – tend to do a lot more diligence in between the pitch of the entrepreneur and deciding to invest.

Is it exciting or painfully methodical and business-like?

It’s probably one of the riskiest asset classes, but also the one with the highest return if you make the right investment – and because of that it is really exciting. You might invest in 10 companies, and of those seven might fail. Of the three that don’t, two might grow steadily and one might take off – and you’re part of that ride. Even those that fail teach you a lot.

Is it becoming easier to be an entrepreneur in the UAE?

Sure. I think that many entrepreneurs have grown up here and are seeing issues that they want to fix and they are fixing them – the UAE is the kind of country that makes you believe in your strength and your power to contribute and to make it a better place. There's still a few bumps, but when I first moved here many entrepreneurs were leaving the UAE because it was cheaper and easier to start elsewhere, but now they are coming for the long-term.

What was your greatest success story? Probably a company my family office invested in in the US where the market moves a lot faster; it’s called Quanergy. The company managed to skyrocket in its valuation in the 18 months after we invested. It now has a value of over $2billion. We still have a stake in that business.

You founded a platform which empowers local female investors named WOMENA: why was that?

I saw within a few weeks of arriving in the UAE in 2013 that my female colleague and I were the only women at most of the investment events. We were often mistaken for interns or someone’s daughter to watch daddy do his thing. So we decided to fight against this and go out of our way to search for women that we felt could be really good investors or were investing already but more discreetly – and give them a platform to do it together. We wanted female investors here to be a force to be reckoned with. We have now evolved into a much larger platform and we're about to launch an accelerator that is focusing on female-led tech businesses in the Middle East.

What’s your biggest turn off when someone is making a pitch for funding?

Arrogance. There’s a very fine line between confidence and arrogance and entrepreneurs have to walk that line very carefully. Funnily enough, the other turn-off is a lack of confidence: entrepreneurs who don’t see the real value of what they are doing, who dream too small and are insecure in their abilities.

What’s the most amount of money you’ve ever invested?

Through the family office we invested US $200,000 in one early stage company in the US. In the Middle East the highest amount would be about US $50,000.

To what extent does gut instinct feature in your decision on whether or not to invest? Maybe 30 per cent, but I have a team dedicated to assessing the businesses and vetting them.

Finally, which business from history do you wish you'd been able to invest in? Amazon. That’s my favourite company – one of the scarier ones, maybe – but I think when it comes to the potential it still has, I feel like it’s still very exciting 25 years after they started. They're still growing and (founder) Jeff Bezos is still trying to build a behemoth of a worlddominating business with morals and an ethical set of values.

womena.com

Angel investing allowed me to get involved with a company, give them finances and provide my expertise that they could use to grow