Are Investors and Entrepreneurs species ahead of their time?
11th June 2018, Cambridge: The Invested Investor, a social enterprise aiming to increase the success rate of early-stage start-ups, recently interviewed two key figures in the investment world. Rajat Malhotra, Managing Partner of Wren Capital and former UKBAA Angel of the Year, and Modwenna Rees-Mogg, the dynamic CEO/Founder of Angel News. Serial entrepreneur and seasoned angel investor Peter Cowley was once again the interviewer, with his talent of enticing interviewees to open up and speak with a refreshing honesty.
Asked why how he transitioned from being a top notch lawyer to being an angel investor, Maholtra replied, ‘it's worth saying – I didn't know anything about angel investing, didn't really know it existed very much from scratch. Researched it, thought about it. And over a period of months, - thought yeah, this might be fun’.
He further explained, ‘...I've never been massively risk averse. I remember a particular instance…We were giving some very early advice to a major household name bank on this whole issue of whether overdraft fees and credit card penalty fees were going to be illegal or not. I remember saying to this guy who was head of risk management ,"Just scrap them. Make it your USP. Make it your competitive advantage. Don't spend millions of pounds on legal fees...”. Being able to visualise what the future might be like (with regard to credit card penalty fees), this personality angel went on with his co-founder to build one of the most active investment companies in the UK with over forty-eight investments over seven years and with four positive exits (and another one coming soon). He was also awarded the UK Angel of the year 2013 for his significant contribution in this area.
When asked what advice he would like to share with entrepreneurs, he said, ‘As a start-up, what you care about is the thing that you can make or sell or provide that can actually be bold. So you need to understand supply chains, you need to understand decision making processes, you need to understand budgets. It's in the weeds, it's in the nitty gritty, I think, where product market fit actually goes wrong, whether it's not understanding NHS supply chains, or budgetary pressures.’
Another investor/entrepreneur who could also see the ‘future’ ahead of its time is Modwenna Rees-Mogg, the founder of Angel News, the leading info provider for the angel market in the UK, who said, ‘At the age of fifteen or sixteen, I remember saying at a family party, "What we need is somebody who goes round supermarkets and picks up the food for busy, working people and drives it in a little van to their homes after work." That was in about 1981, so sadly I was ahead of Ocado but I was only fourteen. And I did say, "Will somebody lend me the money to buy a van?" And nobody would.’ Moving on from this enterprising mind-set since a young age, Rees-Mogg has successfully made Angel News into a world leading investor news provider. She started www.AngelNews.co.uk in 2003 focusing on media and events in the angel and VC market. From £1,000 of start-up capital, she has grown it into the leading information provider and commentator on the business angel market in the UK. The monthly Angel Newsletter sent to over 10,000 angels and other investors is the broadest commentator on and a thought leader in the UK angel and wider private investor market (including VCTs and crowdfunding).
When asked about any tips for entrepreneurs, Rees-Mogg said, ‘Know your co-founders. Don't let things get to a bloody fight such that you can't talk again.’
‘And for investors,’ she advised, ‘Don't invest alone. Write your investment down to zero when you first invest.’
Inspired by Peter Cowley, the Invested Investor is improving the journeys of startups by educating angels and entrepreneurs to make fewer mistakes, work better together and produce more successful exits. They want to empower angels to invest their time, emotion and experience into start-ups, and help entrepreneurs with how they should start to talk to investors and then build an open and trusting relationship with them. Run by Peter’s son Alan, the project’s underlying message is that more honesty and transparency between investors and entrepreneurs will lead to more successful startups. They have a series of podcasts on their website, www.investedinvestor.com, and a first book being released in the autumn of this year.