Meet Tessa de Flines: Angel Investor and founding partner of Masters of Scale!

Meet Tessa de Flines! Tessa is a founding partner of Masters of Scale, an international group of experienced entrepreneurs and experts supporting companies with scaling challenges by providing strategic advice and fractional leadership. Tessa personally helps startups and scaleups with strategic planning, process improvement, project management, and team development both as an advisor and Fractional COO. After a long career in large multinational corporations, Tessa made the step to entrepreneurship over 6 years ago. As an angel, Tessa invests in pre-seed and seed rounds, both through the angel cooperative Great Stuff Ventures and the female angel group The Angel Initiative. She also invests as an independent angel. Passionate about female empowerment, Tessa serves as chairwoman of the foundation Female Ventures which aims to empower women in their careers with knowledge, inspiration and networking through events, a community and mentorship program.

Hi Tessa! We’re thrilled to be chatting with you today at FEM-START. Could you share what sparked your angel investor journey and the driving force behind it?

Through Masters of Scale, I was advising startups and scaleups. However, around two and a half years ago, I felt a growing desire to have a more direct financial impact. This led me to explore avenues for active investment participation. Through a former colleague at ABN AMRO, I was introduced to Great Stuff Ventures (GSV), an organization dedicated to backing exceptional individuals driving meaningful ventures. Working alongside a team of twenty like-minded individuals, I found myself deeply engaged in the process, considering it a serious pursuit that extends beyond mere hobbyism.

While I had prior knowledge of investing in general, my experience with GSV afforded me invaluable hands-on learning opportunities for startup investing. Collaborating with others enriched my understanding and bolstered my confidence, empowering me to pursue independent investment opportunities alongside my commitments to GSV. Beyond GSV, I’ve chosen to focus my individual investments on supporting women entrepreneurs, recognizing the persistent underrepresentation of women in both entrepreneurship and funding. To further this commitment, I am actively involved in The Angel Initiative, a foundation dedicated to empowering women in angel investing. My participation in this initiative aligns with my broader goal of fostering diversity and inclusivity within the entrepreneurial ecosystem.

What does the term Angel Investor mean to you?

An angel investor, also referred to as a private investor, informal investor, or business angel, is an individual who invests their funds into startups in exchange for equity or another form of investment return. For instance, a convertible loan represents a commitment to future ownership or equity. Unlike venture capitalists, who manage pooled funds from external sources, angels invest their capital and are driven by personal passion and impact.

It’s important to dispel the misconception that angel investing requires substantial financial commitments or full-time dedication. Contrary to popular belief, investments can be made with smaller sums, even in the single-digit thousands, and involvement can vary in terms of time commitment. This misconception warrants correction to encourage broader participation and dispel unnecessary barriers to entry.

What do you look for in an entrepreneur as an angel investor? What are the criteria and characteristics to look out for?  

When evaluating potential investments, I prioritize impact and solutions that make the world better, focusing on problem-solving rather than just product-pushing. For instance, I’ve supported Elfin, drawn to their mission of empowering women financially and their customer-centric approach. I value founders who deeply understand their customers and have a clear roadmap for execution. Passion and ambition are crucial, but so is the ability to execute plans effectively, either through personal expertise or a strong team. Collaboration is essential, as lone wolves may struggle to lead effectively. Concise communication is key, and the ability to handle challenging questions demonstrates preparedness and depth of understanding.

What companies have you invested in and how successful are they today? 

I diversify my investments across three primary avenues. Firstly, with Great Stuff Ventures (GSV), we invest a minimum of €50,000 on a case-by-case basis. Even if I choose not to invest in a particular opportunity, I still have a stake in all investments through our portfolio approach. This is a set-up I haven’t come across anywhere else. Through the GSV portfolio, I’m a shareholder in approximately 15 companies, including notable female-founded enterprises like Augmedit, Moonrise, and Cilter.

Additionally, I independently invest in female-led companies such as Elfin and Mastermatch, addressing crucial issues affecting women and striving to enact meaningful change. My investment range for individual tickets typically falls between €5,000 and €25,000, with follow-up rounds as necessary.

Furthermore, I participate in The Angel Initiative, supporting ventures like Vini Mini, recipient of the FEM-START UP Awards 2023, focused on addressing core allergenic issues for newborns. As these companies mature, many are gaining traction and generating sales, while others, like Augmedit, are preparing for subsequent funding rounds. Since I on;y started 2,5 years ago, it’s not a surprise that  I haven’t experienced any exits or bankruptcies within my portfolio. Angel investing has a long-term return horizon. 

Reflecting on your journey, what were some significant mistakes, and what lessons did you learn from them?

Fortunately, I haven’t made any significant mistakes, I’ve just gained some learning experiences. My first independent investment was through a Convertible Loan Agreement (CLA), which typically includes a cap, ensuring conversion at a predetermined valuation. Additionally, these loans often offer discounts to investors, providing an additional incentive for joining as an early investor. While this round lacked a discount, it featured a cap, prompting my investment. In hindsight, I wish I had negotiated a discount, but I was keen to invest and at the time I didn’t completely understand the significance of the discount. As an angel investor, navigating complex terms, including legal deal jargon, is part of the learning process. Collaborating within a group proved beneficial, offering insights and support from those more experienced in the field. Though the learning curve was steep, mastering these intricacies enables me to mentor others effectively.

What stands out as your biggest achievement since becoming an angel investor?

I take great pride in my ability to elevate the visibility of female founders and promote angel investing among women. I consider myself an ambassador for this cause, making it my mission to raise awareness and advocate for increased participation. My goal is to inspire more women to become angel investors and instill confidence in founders to seek support from angels.

What’s next for you? Anything we can look forward to?

In the realm of angel investing, exciting developments are underway. With Great Stuff Ventures, we’re on the cusp of closing our second portfolio and launching our third in June, accompanied by the addition of new members. I’m actively engaged in this process, which is invigorating. Similarly, within The Angel Initiative, I’m deeply involved as we forge new partnerships and make fresh investments, signalling promising growth on the horizon. 

On the business front, as Masters of Scale, we recently introduced a new Fractional Leader proposition, which offers a blend of experience, cost-effectiveness and flexibility in the form of Leadership as a Service. I’m also in discussions for a Fractional COO position myself since I get energy from combining strategic advice and hands-on support. We are also currently working on some exciting advisory projects with very innovative companies helping them to solve challenges like fundraising that are standing in their way of scaling. 

Lastly, at Female Ventures, we’re piloting an inspiring program aimed at empowering girls at a younger age, specifically targeting secondary school students. We aspire to refine and expand this initiative to make a meaningful impact on the lives of young women.

If you want to know more about Tessa’s company FLTRD, click here!