Celebrating the birth of my son, obviously hasn't brought enough "newness" to my life lately with a bunch of exciting things happening elsewhere too. Heck, when it rains it pours.

One of my ambitions this year has been to step up my angel investing activities and literally just get a couple of toes into the water; mostly to learn and just expose myself to more startups (preferably in various industries). In addition to this - and acknowledging that my investment budget is still very limited - I decided to find startups where I could offer value as an advisor (something which I'm also publicly advertising here).

On both these fronts, I have some exciting news to share and would like to introduce you to three new startups that I'm involved in... 

Dress Rush

I was first introduced to Dress Rush a couple of weeks ago when I saw their amazingly designed investor pitch deck. From the very first moment I interacted with the brand, business & ideas, I knew that I wanted to be involved. I subsequently reached out to the team and a couple of weeks later (having been made to jump through hoops to get funds transferred internationally), I'm now officially an investor in Dress Rush.

Two things make me specifically proud about this: 1) Jeanne & I made this investment together, as she was just as keen - if not more keen - to get in on this action; and 2) I get to experience a whole different industry and business model.

Having also got married a little more than a year ago myself, I could've most definitely used something similar to Dress Rush. I bet I would've saved a lot of time and even more money.

Buffer

I've been using Buffer for a couple of months now and have actually been an early user since the first time I stumbled onto Joel Gascoigne's, one of the co-founder, blog. Having found Buffer to be incredibly valuable to my own workflow and online activities, I'm honoured to be joining their team as an advisor.

I love the idea behind Buffer and I see them going from strength to strength.

PressTrends

PressTrends is a little closer to home and is already something we're trying out at WooThemes. Considering how big the WordPress ecosystem has become and how many people are buying themes, I believe PressTrends fills a massive gap for developers in giving them crucial data & analytics to fuel proper, data-driven decision-making.

I'm advising the PressTrends team and even though these are early days, they've already laid the platform of a very exciting business. These guys will be adding a very valuable component to the WordPress ecosystem.

And in addition to all of this, I might be working on a little side-project of my own that should see the light in Q1 2012. All I'll say for now is that the project was one of the ideas that remained after Radiiate was closed down earlier this year.

Finally, if you wanted to get in touch with me on any of these fronts, feel free to have a look at my AngelList profile or my startup services.

A couple of weeks ago I joined AngelList hoping to get into the angel investment scene and diversify my own business interests (as well as meeting new people and having stimulating / challenging business conversations about their work). I've had a couple of introductions to startups which I thought had some traction, but to date I've resisted pulling the trigger on any of the deals, as I've decided to err on the cautious side.

Bubble or no bubble, I'm not convinced of either of those ends on the spectrum. This article published by the Economist last week introduces a new "bubble theory", one which resonates more with my own thoughts than the alarmist articles that have been published recently.

Here are my concerns:

1. Funding supply is exceeding the demand, which is driving higher valuations. Angel investment has indeed become sexy and - dare I say it - moved into the mainstream. Heck, I'm quite connected and I read a lot, but it's only in the last couple of months that I've taken notice of angel investments to the extend that I'm intrigued enough to get involved. More angels obviously means that valuations are being driven up and I'm not sure that all of these valuations could ever be sustainable.

2. Valuation techniques / models are shocking. Talking about valuations, I recently quizzed a startup founder on how they decided the valuation of their business (for the purpose of raising some funding). He said: "We want to raise $200k and for that we're willing to part with 10% equity. So this values our company at $2m". A little crude IMO (especially since this was prior to $1 of revenue)... I'm no investment expert, but I did my fair share of business valuation models during my Honours Degree and this kind of valuation is risky at best.

3. The Exit Culture. At this kind of pre-revenue valuation, how can I ever earn a proper ROI on my angel investment? I need to hope that the company is valued at a higher level in a subsequent funding round or I need to hope that they get acquired somewhere in the future, in which case I'll probably be rich. Alternatively I need to hope that revenues eventually justify that valuation, which is a gamble at best since your guess is as good as mine when - and if - that will happen (as there's no supporting evidence pre-revenue).

4. Closed Focus. It just seems that so many startups are targeting the same kind of tech-savvy demographic, which suggests that we'll eventually reach a saturation point in the appetite of this demographic to try something new (which in actual fact is only a slightly different spin on something else they've been using until now). This approach is very gimmicky and I highly doubt that we'll continue to see $1m-in-sales, overnight iOS app successes as much as we've seen them until now.

None of these concerns, invalidates either angel investment or the tech / startup community at the moment, but they most definitely make me think twice about make any investment at present. I know that there are a lot of angel investors - especially those that have access to the best deals in the Valley - that will make an absolute killing for pulling the trigger now, but that is most definitely easier, when you can make 10-odd sizeable investments & in the process you're hedging your own risk (based on the assumption that you're actually making good investments).

Unfortunately I'm not in that position to take a 10-deal kinda risk on our personal finances at present and I thus need need to be much more selective about the investments that I do make.

So as I’ve mentioned before, I’m really keen to do some angel / seed investing (via iincubate, which will also fall under the radiiate umbrella) in the future and as a result I’ve been following quite a few influential peeps in that space as a way to build up my own knowledgebase.

Up until now, I have zero experience with angel / seed investments and the bit of theory that I do know, I picked up during my graduate studies in Business Management. That being said, I don’t think that angel investing is overly hard to grasp, as it is not much different to any other form of investing (imho as a newbie).

I’d think that it would be possible to make a solid investment decision based on the following two factors:

• Does the idea make sense? Irrespective of how speculative the idea is, if it makes sense and it’s possible to turn it into a sustainable & potentially profitable idea, then your investment should be fine.
• Does the business / revenue model make sense? How dependent are those on external factors & assumptions? What percentage uptake / number of customers do you need to cover overheads?

As far as I understand (and this is my mentality with regards to angel investments), the idea is to take a small percentage of a startup at a conservative price level (so you need to get in early). Based on that, it is thus possible to limit one’s risk exposure with great potential in terms of earning a proper ROI if the idea & business model does gather traction.

I’d love to hear your thoughts on this, as these are just the thoughts that I have been playing with in my head… I still have a lot to learn obviously and most things I’ll only end up learning with future experiences. In the meantime though, my plan is (as it has always been) to simply wing it and learn on the job…