investor

Timothy Dickens is Investing for Retirement

Introduction

There are many different reasons to pursue startup investing. Finding and supporting innovative companies is the draw for some investors. Others start out supporting their friend or family members and then find themselves loving the culture of it. But for many, startup investing is a way to plan for the future.

That’s the case for our latest Investor Profile with Timothy Dickens. He works full-time as the general manager for parts in Chrysler, a position he had held for 34 years. And he wants to retire as soon as possible.

Note: The following interview was conducted via phone and email. It has been lightly edited for clarity and length.

Inez Sanjaya
How did you get into startup investing? How long have you been investing?
Timothy Dickens

I came across Angel and Entrepreneurs, launched by Neil Patel on Facebook. I saw Chris Lustrino is also on the advisory board for it. I joined Neil’s network in August 2019 and since then I have invested in about 200 companies. I have been using platforms such as StartEngine, Wefunder, SeedInvest, Republic, and also some private platforms — like with Cityzenith. Around 90% of my investments are in the online private market. 

Inez Sanjaya
What is your strategy for building your portfolio?
Timothy Dickens

Well, since I do not have a ton of money currently, I invest in the basic minimum amount of investment — $100. I joined Republic, and I signed up for the auto invest feature that they have. I started off by investing $20 per week to just get started investing in companies that I would not normally invest in. Normally, I would look at the higher end ones, meaning startups whose team has prior experience and maybe exits as well as positive cash flow. On top of that, I also want to see a good addressable market. If these criteria aren’t met, I would stay out of it since I can’t afford to risk and lose money at this stage in my life.

Inez Sanjaya
Is there any industry that you are keeping an eye on currently? Why?
Timothy Dickens

All of them — I will take anything. I do know the hot ones, such as robotics, artificial intelligence (AI), and healthcare, and I mainly watch these industries. I met with Mr. Robotics, and I am going to invest in them. Another industry I think is big is education, for example, Caribou — they have done very well. They have actually just converted my SAFE into shares. However, I am not against investing in other industries that come to the table. If I go on Republic, I can see my sectors broken down by percentages, so I know where I am at and everything. I have been investing right across the board so it’s nice that my portfolio has a little bit of everything. 

I also get recommendations off of Neil’s website and since I am a lifetime member, I get private deal flows. In a month, I probably get five to 10 recommendations from him and they are all pre-vetted already. Then, I pretty much go with what he goes with. 

Inez Sanjaya
Is there any criteria that you always focus on when you’re picking a company to invest in?
Timothy Dickens

The most important factor for me is if the team has deep experiences — and especially exits — because I think it takes a lot of experience to build a startup and actually make it work. And if they don’t [have that experience], it can take double or triple the time to build that startup. It can get very frustrating to actually go through the steps — working with the SEC, the audits, going to a crowdfunding platform and getting approved. I think startups with teams that have prior experience have a better chance to succeed. 

Another thing is that they need to know how to scale a business. This shows that they really know what they are doing. Some indications that I check for is if they have revenue or cash on hand — just look at their numbers to see what stage the startup is at. A lot of startups will have cash on hand and have revenue coming in monthly — this is such a good sign. 

I also check if the startups are adaptable and scalable, especially during the pandemic. If something in the company is failing, dealing with debt, and brings something else new to the table, I want to see if they will make it work or make it their own. It’s amazing how much innovation the last year has brought to the table.

Inez Sanjaya
What do you think of crowdfunding and its future?
Timothy Dickens

I think it’s great that even starting this year forward, we have seen huge advancements — especially after the SEC raised the maximum Regulation Crowdfunding investments from $1.07 million to $5 million as well as raised Regulation A’s maximum by a huge amount. These raises give startups more capital, which means they have fewer money issues because it’s a once a year shot and $1.07 million is nothing when you’re trying to build a company. So, increasing it to $5 million makes a huge difference. Because of this, you can also see that the investments have gone way up on the crowdfunding side — they really pumped some money into the platforms. I think we’re just getting started. We’ve seen a lot of companies come up in the last year that have been really amazing and were able to adapt to changes. You can see how they are really aggressive and they want this — it’s a very exciting thing to see. 

Inez Sanjaya
What advice would you give to those who just got into crowdinvesting?
Timothy Dickens

Patience. People keep asking when they will see a return but if you read what’s on the platforms and Google, they will tell you that if you put your money into this space, you basically wait. A lot of people seem to expect it right now, but it’s not, it could take three and a half or even seven to 10 years. It all depends on everything and how it goes. This year has started out really good in terms of IPOs, but then now all of a sudden, it has slowed down again. 

Aside from patience, get educated on how this stuff works and what you’re looking at and know how to value a company — valuation, total addressable market, and know what you’re looking for when you invest. So you don’t just pick one that goes belly up and you lose your money. None of us are into it for that reason. A lot of people will pick a company just because they like it, but if you want to get a return, that may not always work for you. So you need to look at more details, such as the SEC files. When you start investing in a lot of companies, it’s really important because you’re putting your own hard-earned money out there. 

Many thanks to Timothy Dickens for his time and thoughtful answers!

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About: Inez Sanjaya

Inez's background is in the startup ecosystem, which she is very passionate about. Inez has experience working in a startup, a Google-backed accelerator, and lastly in Plug and Play Tech Center. Prior to this, she was a part of VU Venture Partners doing deal sourcing and conducting due diligence. Inez graduated from the University of California Berkeley with an Economics degree.

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