Australia's angel investor of the year: Professor Tim Hirst
Professor Tim Hirst
Professor Tim Hirst's eyes gleamed and he smiled as he recounted some of his investment successes, including two of his large exits last year.
Exits is code for when a company that an investor has put money into is sold, either because it is bought out by a larger company, or it lists on a Public Exchange via an IPO and shares can be sold into the public market. And if the investment goes well, that leads to a large payout to early angel investors. In Hirst's case, two of his investments did very well last year, including being a first investor in local Canberra success story Instaclustr.
In October, Hirst was named Techboard 2022 Australian Angel of the Year – and for a good reason. Not only has he shown he can identify startup opportunities that yield a return on investment, but also that he serves as a trusted mentor to many start-up companies.
Finding interesting opportunities
While many investors have been lamenting the downturn of the stock market or feeling the pain of interest rate rises, Hirst's two large exits have done well. One was an imaging company he invested in ten years ago at 65 cents a share; the company was listed on the ASX in October 2021 for the equivalent of $28 a share.
“I find interesting opportunities that can change the world and save lives”
Hirst is a shrewd investor, but his passion for being an angel investor is motivated by more than just wealth creation. 'I find interesting opportunities that can change the world and save lives,' he said. 'And then I think about how to create value out of that. My thesis is to hunt out interesting opportunities and invest in them.'
One of Hirst's recent large exits was for a company that is revolutionising cancer diagnosis. He is also Chair of the Board and an early supporter of pain relief company Brain Changer. 'Just to hear the stories of people who have gone through the Brain Changer program, and they write back saying "you've saved my life, and you've got me off my medication and I'm now back at work". ‘It's a fantastic achievement,’ he said.
Beginnings as a biochemist
Hirst trained as a biochemist. That then led him to many aspects of the life sciences, from becoming a protein engineer (of sorts), to an immunologist, cell biologist, microbiologist, until eventually becoming an expert in infectious diseases – many years before COVID made this a trendy area of specialisation.
'It's an ongoing passion,' he said of his background in infectious diseases. 'I'm interested in how you control infectious disease and use the human immune system to do good. And I guess that's why I work with and invest in companies developing vaccines.'
Hirst served as Professor of Microbiology at the University of Bristol for seven years and before that Lecturer/Senior Lecturer/Reader in Molecular Microbiology at the University of Kent at Canterbury. He also served as Director of Hunter-Fleming Ltd, a UK drug discovery company developing immunotherapeutic products based on his research at the University of Bristol.
Hirst was then invited to join the University of Sydney to serve as Deputy Vice Chancellor for Research and Innovation. This brought him even closer to the research community. 'All the best researchers in the university used to come knocking on my door,' he said.
In 2006, Hirst was invited to serve as the inaugural CEO of ANU Connect Ventures, a pre-seed investment fund established by the Australian National University and MTAA Super. In this role, he was involved in founding or helping set up start-ups and supporting early-stage companies. During this period, he also held a position at the John Curtin School of Medical Research, where he led a team of researchers and served as chairman of a Sydney-based vaccine company. 'For the first time in my life, I wasn't actually working full-time in any one role.'
After doing this for three years, he branched out on his own. 'I decided to wrap money and people around exciting projects and become a full-time independent investor,' he said.
Angel of the Year
Angel investors are usually private individuals who back early-stage start-ups. They receive an ownership stake in the company and sometimes provide mentoring and support. They differ from other forms of investor funding in that there's generally a personal connection, and the motivation is more than just making money.
'It's very gratifying,' Hirst said of his award as Angel of the Year. 'It wasn't something I sought, and to some extent it might have been good to be under the radar,' he joked. 'Now I'm getting emails from people – which I might not necessarily want.'
Hirst said he doesn't have huge bags of money to hand out to everyone who asks. 'I've only got so much bandwidth to do due diligence on investment opportunities, so I have to be quite selective'.
But he said that one of the best parts of the award was the acknowledgement of his role in mentoring entrepreneurs, getting them off the ground and supporting them, something that he has done throughout his career. 'I was always building teams while working at university. I was often recruiting new staff and putting people in as junior lecturers or new professors, and there was always a mentoring role to create the right type of environment where they would thrive,' he said.
What angel investors look for
Are you a start-up looking for investors? If so, you might be interested to find out what seasoned angel investors such as Hirst look for.
“It’s the identification of something that’s important and disruptive”
Hirst said there is no one formula he uses for determining what makes a great investment. 'It’s a combination of things,’ he said. ‘It’s the identification of something that’s important and disruptive. If it’s in the medical area, it’s an unmet need and you know there’s a desperate requirement for a solution. You look at the team, particularly the CEO of the company and their drive, passion, and ability to do what they say they’re going to do.’
But foremost in evaluating the investment potential is the potential return. Hirst considers how the company is performing, how much money the company will need to deliver a successful company, the time frame and the likely return on investment. ‘So you go through a process of looking at the technology, the people involved and the investment returns. And if it all stacks up and makes sense, I’m open to investing.’
But Hirst doesn’t always get it right. ‘If they’re going to fail, it’s better if they fail early and before a lot more money may have been invested,’ he said. And for an angel investor, a portfolio can look terrible in the early stages because there are more failures than successes.
Canberra HQ, global vision
While he is based in Canberra, the companies Hirst works with aren’t all based in the Nation’s Capital. He is involved in companies in Adelaide, San Francisco and Singapore, and along with his UK background, gives him an insight not only on what’s happening in Australia – but globally.
“I tend to think that companies should be set up to be global companies from day one – even if they’re operating in Australia”
‘I tend to think that companies should be set up to be global companies from day one – even if they’re operating in Australia,’ he said. They should take a global perspective and probably have advisors from around the world and be set up to compete internationally.
Hirst is upbeat about Canberra as an innovative ecosystem. ‘I think the Canberra Innovation Network is doing a fantastic job,’ he said. ‘The Griffin Accelerator Program, in my opinion, is one of the best programs in the country. It’s led by mentors, and the cash it uses to invest in participating companies comes from the mentors. It’s well supported by the executives that know what they’re doing and Dr Craig Davis (General Manager, Growth Teams) is doing an outstanding job in leading it. It is able to attract some of the most exciting innovations that one might want to support and invest in.’
And then there’s the influence of CSIRO, ANU and other universities. ‘So you’ve got extremely bright, intelligent people coming up with solutions, inventions and opportunities all the time’, he said. ‘Canberra hits above its weight in terms of educational attainment – it’s really remarkable what we’ve got here.’
The fact the Government is in Canberra creates another unique business opportunity, with many of the companies choosing to set up here servicing Government requirements.
‘And you know, I love living here. It’s one of those places where most people in Sydney or Melbourne have visited as a 12-year-old in the middle of winter, been carted around and hated it – I don’t think most people have a true appreciation of Canberra.’
But to remain successful, Canberra start-ups need to think beyond the ACT boundary. ‘No one city or country has a monopoly on innovation and successful investing. And I really think we need to think globally and take the time and trouble to understand what’s happening around the world and see where the trends are and what the approaches are. We need to stay globally connected to be successful entrepreneurs and investors here in Canberra.’
Canberra angels
While he might be Australia’s best angel investor, Hirst is not the only one in Canberra. He said the angel community is thriving, with a large number of investors doing what he terms true angel investing. ‘They’re not only providing money, but they’re also providing their intelligence, commitment and help to companies,’ he said. ‘It’s not just about the money; it’s actually the ability to have smart money and be able to engage with those companies, and that’s why getting in early – being a first investor – is a wonderful thing to do.’
“It’s not just about the money; it’s actually the ability to have smart money and be able to engage with those companies, and that’s why getting in early – being a first investor – is a wonderful thing to do”
‘Obviously, it's high risk and you know you could lose all your money,’ he said. ‘But the best way to get to know a company is to be there right at the very beginning, see it grow, develop and mature. And that's what I like doing.’
Advice for start-ups
Hirst has advice for start-ups aspiring to secure funding. ‘It will take longer than you think to raise the money,’ he said. ‘And take advice from as many people as you can, but at the end of the day, you must sift through all that advice and make the decision yourself. At some point, you’ve got to get to a stage where you are sufficiently self-confident to do what you do and follow that through.’
