Angel Investor Spotlight: Morgan Lemaitre
An investment industry veteran who has worked with top firms like Raymond James, Goldman Sachs and UBS, Morgan Lemaitre, CFP®, knows a thing or two about building financial certainty. Here, the founding partner and managing director of Park City Family Office, who also happens to be a two-time United States figure skating gold medalist, tells writer Amy Hourigan about her first angel investment, what she’s learned since, and the advice she’d give others who are considering backing an early-stage company.
Amy Hourigan: Hi, Morgan. Thanks for your time today. Let’s dive right in: What led you to become an angel investor?
Morgan Lemaitre: My first angel investment was presented to me by a friend who couldn’t tell everybody about the deal. It was a cancer drug that had the possibility of changing the industry, and the technology made sense. After conducting some research on my own, I felt called to invest. I knew I might never see my investment again, but I knew I would always regret not being part of the solution.
AH: Ah, interesting. So, what types of companies do you invest in now? Has anything changed?
ML: As a more experienced investor than I was when I did my first deal, I now have very specific criteria for the types of companies I’m willing to invest in. These are derived from my core values and purpose. If the deals don’t speak to what I believe in, then I know right away they’re not a good fit. For instance, I believe in investing only in companies that leave the world a better place.
AH: That’s admirable, and a belief I know many in our Tidal River investment group share. Beyond funding, how involved are you with the businesses?
ML: Typically, as an angel investor, there aren’t too many asks beyond the initial investment. At times I have taken a board role when the team needed advisement early on. However, I stay involved by asking questions. If something’s on my mind, it will be on future investors’ minds too, so I like to give the management team a head start on getting in front of questions, issues or other things they might not have thought about.
AH: What’s the most rewarding part of angel investing?
ML: Working and interacting with founders. Founders are a unique subset of people because they have a fire blazing inside. Their passion is contagious, and their aspirations are pure. It’s a beautiful reminder that the world is still full of people who are building and creating, and who are excited to share their gifts with the world.
AH: What type of due diligence do you conduct before you invest?
ML: There are many different types of criteria I look at during the due diligence process; however, I find an often overlooked piece is the management team. I spend a lot of time trying to understand what type of experience the founder and management team have. For instance, have they ever brought a product to market, or did they just have a good idea they cooked up in their garage in the past year? As a savvy investor, I know that trial and error cost a ton of investor dollars. I want to see founders who are aware enough to know when they need to bring in help to fill experience voids. The best product in the entire world won’t make it to market without the right team leading the charge.
AH: How often do you check in with founders?
ML: At a minimum, founders should be providing quarterly updates to investors. As an investor, I want to see transparency. Transparency in sales numbers and financials, and updates about what’s going right and what’s going wrong. Any founder who is telling investors that everything is going great is sending major red flags. In early investing and early startups, there are tons of road bumps. Sharing the wins and losses with investors helps create a collaborative environment and lets investors jump in if they have resources to help with an issue.
AH: What’s one thing you wish you knew before becoming an angel investor?
ML: That in today’s environment, the smart money is often some of the last money in a deal and not the first money in. But that’s okay. Because angel investing for me is about giving someone’s idea a shot on goal that they never would have had otherwise. It’s spreading the love to fellow entrepreneurs, knowing that we can do more together. And then sometimes, it’s about getting lucky, because that one shot on goal happened to pay off.
I’ve learned a lot about angel Investing since my first deal, including what to ask. It is our duty as investors to ask questions and seek answers prior to and after writing checks, which makes the product and the team better. I’ve also learned that angel investing should be driven by the heart and not the pocketbook. Today, when my clients ask me about early-stage investments they’re interested in, we run a process to ensure the opportunity is aligned with their purpose and passions. The money is secondary.
AH: Did you make any mistakes along the way?
ML: Well, even though I have a background in finance, at the time of my first deal I didn’t know what questions I should have been asking, because early-stage investing is very different than the public markets and late-stage investing. I’m embarrassed to say that I was worried I would look inexperienced if I asked the “wrong” questions. But I so admired the cause and the story that I wrote a check anyway.
Then I learned that not much happens in those early stages—not for investors anyway. Unlike the public markets, which are always moving, and late-stage deal flow, which has a lot of action, angel investments need time to marinate. They thrive on duration.
AH: What other advice do you have for those new to angel investing?
ML: Consult with your advisor before investing, and if you don’t have a family office or wealth advisor team, get one first. Angel investing is risky, and it’s not for everyone. You need to make sure you’re set up for personal financial success first. For those just jumping into angel investing, you also need to know that this type of investing isn’t a strategy that should replace your core portfolio. It shouldn’t make up your entire alternative investment strategy, either; it is just one piece that supplements the other pieces in your wealth picture.
AH: When can angel investors expect to see a return?
ML: For me, this is where it comes back to investing in purpose and passion. Knowing I helped something advance that will better the world is my return. Any investment return typically comes years later and is always a pleasant surprise! I look to my traditional investments and late-stage alternative investments for my real portfolio returns.
AH: Are you particularly excited about any industries right now?
ML: I’m really excited about the MedTech space right now. This is an industry that has been quietly working away while the world was focused on COVID and is now preparing to meet years of backlog and demand.
AH: Speaking of medical advances, what happened with your first investment, the cancer drug? Any updates?
ML: Over the years, I’ve received updates for this particular investment—on research that is being done in the labs, progress that has been made with other branches of the technology, and roadblocks that have extended the drug’s timeline. Then, just last month, I received an update that the drug has been approved for human clinical trials and that a Series A round might finally be on the horizon. This is very exciting, not only for investors, but for mankind.
While I don’t know if or when my investment might see a return, I sleep peacefully knowing I invested in a cause I was passionate about and, in some small, small way, was able to help advance research and healthcare for my fellow person. That’s all the return I need.
AH: Thanks so much sharing your insights, Morgan.
ML: Thanks so much for including me.