Angel Investing 101: How To Not Run Out Of Money

Win $2,000 in credits with the Day One Network — take our 2-minute audience survey before 30 June: dayone.fm/surveyEpisode Summary:In this episode of First Cheque, Cheryl and Maxine dive deep into financial planning for angel investors—how to avoid running out of money, manage liquidity, and strategically deploy capital across investment cycles. If you're an aspiring angel investor wondering how much money you need to start or an experienced investor looking to refine your cash planning strategies, this episode is packed with essential insights.They discuss the importance of staying liquid, diversifying check sizes, and the dangers of deploying too fast. Plus, they break down the realities of payback periods in startup investing, why you shouldn’t expect quick returns, and how power law dynamics shape investment outcomes.Cheryl also shares her personal approach to budgeting for angel investments, alternative funding sources (like self-managed super funds and term deposits), and how investors can avoid the all-too-common mistake of running out of capital too soon.If you want to build a sustainable angel investment strategy, ensure you're making long-term, high-return decisions, and avoid costly mistakes, this is an episode you don’t want to miss!Key Takeaways:00:00 – Introduction: Why budgeting and cash planning are critical for angel investors01:49 – The golden rule: How not to run out of money when investing02:37 – Why staying liquid matters: Power law, economic cycles, and risk mitigation05:15 – Angel investing vs. stock market investing: Why you can't just sell down a position08:04 – How Cheryl funds her investments: Breaking the myth of needing huge capital10:00 – Alternative funding sources: Super funds, ETFs, term deposits, and more13:41 – The importance of knowing your risk tolerance and financial boundaries17:48 – Varying check sizes: When to double down on winners and how to strategise23:15 – Why new angel investors should start with consistent check sizes30:47 – Australian angel success stories: Real returns and lessons from Clarity Pharmaceuticals, Autra, and Instacluster34:56 – Final takeaways: Planning, patience, and how to build a sustainable angel investing portfolioResources MentionedAngel Academy – The most comprehensive angel investing course for Australia & NZ: www.venture.academyAussie Angels – Cheryl’s platform for angel investingCoventures – Maxine’s venture capital firmCentral Texas Angel Network (CTAN) – Study on angel investment returnsTechCoast Angels California – Report on long-term angel investing performanceAustralian Angel Success Stories:Clarity Pharmaceuticals – 50x return for early investorsAutra (Agil) – Acquired by Schneider Electric, 91% IRRInstacluster – 63% IRR after acquisition by NetAppSponsors:First Cheque is supported by our wonderful sponsors:Deel: Founders scale faster on Deel. Set up payroll for any country in minutes, hire anyone anywhere, and get visas handled fast, so you stay focused on scaling. Deel takes care of onboarding, HR, IT, EOR, benefits, and compliance, so your team can grow without borders.It’s why more than 40,000 fast-growing companies trust Deel to move fast.Visit https://www.deel.com/dayone___Pear Tree: Pear Tree helps Australian and New Zealand founders build high-performing offshore teams without the agency middleman.As local hiring becomes more expensive and harder to fill, many operators are turning to offshore talent across engineering, development, marketing, accounting and operations at a fraction of local salary costs.The offshore horror stories you hear usually aren’t a talent problem. They’re the result of outsourcing agencies that overcharge clients while underpaying staff. Pear Tree takes a different approach through a direct, transparent model where your team is paid fairly, fully compliant, and focused entirely on your business.As part of the Day One community, you’ll receive a free team audit to identify where offshore talent could move the needle in your business, plus 20% off your first hire. Learn more at http://dayone.fm/peartreeFirst Cheque is part of Day One.Day One helps founders and startup operators make better business decisions more often. To learn more, join our newsletter to be notified of new First Cheque episodes and upcoming shows.Mentioned in this episode:Deel x PX_Script 1This podcast uses the following third-party services for analysis: Podtrac - https://analytics.podtrac.com/privacy-policy-gdrpSpotify Ad Analytics - https://www.spotify.com/us/legal/ad-analytics-privacy-policy/