Hands-on angel investing Evaluating people and crunching numbers key to success for New Hamburg man
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uccessful angel investing — providing funds to early stage companies — requires paying attention to details, expecting high financial returns and being okay with losing everything, Dale Brubacher Cressman says. “You’ve got to go into it recognizing you could lose your entire investment,” says the New Hamburg man. “It’s not like any other investment. If you are not prepared to lose (all) the money, you shouldn’t be investing.” Over the past 12 years, Brubacher Cressman has done four major investments. One firm failed, one has not yet provided a return after many years, another has had some moderate growth, and another achieved “a World Series winning home run” in terms of its financial payout. “Out of four deals, I’ve done much better than the statistical average.”
“I think 10 times (the amount invested) is what you are looking for in a deal. That’s what your hopes and expectations are, for the amount of risk you are taking.” “You don’t angel invest expecting to break even” unless doing it as part of personal charitable activity, he said. His philosophy for success in investing is to become actively involved in companies, getting a seat on the board in order to help shape its chances for success. “Part of me says, and this is my Mennonite ethos: If you are just throwing money at a company and hoping they will succeed, you’re just gambling.” “I don’t want it to be a game of chance. I want it to be a game of skill where you can actually influence the outcome.”
Brubacher Cressman’s faith community was a key part of his upbringing. “It definitely shaped a key part of who I am. It absolutely affects how I deal with people, how I do business.” “There were business deals that I did not fight for because I said: ‘I don’t do business that way, and I don’t want to do business with somebody who does.’ If it means giving up that business opportunity, that’s fine. I’ve got lots of other business opportunities.” He recognizes that he has been fortunate not to have to be chasing dollars and has had business partners who share the ethic of being unwilling to compromise their values. “I think that perspective helps me in evaluating people. That’s a Dale Brubacher Cressman makes a point about his investing philsophy photo by Kamil Ahmed
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The Marketplace November December 2019
