Peter Cowley: Introduces The Invested Investor
Podcast transcription - 21st September 2017
Chris Smith
Welcome to the Invested Investor. I'm Chris Smith from The Naked Scientists. And sitting to my right is Peter Cowley, the brains and motivation behind this enterprise. Peter, what actually are you seeking to achieve? What will a person who listens to this series and others get out of this?
Peter Cowley
What I'm trying to achieve is to share the many decades literally, of experience I've had as an entrepreneur and an angel investor, to help both angels and entrepreneurs in improving the journeys they have from the point where an entrepreneur comes up with an idea to the point where it's a successful business - it floats or is sold via a trade sale.
Chris Smith
Why is this needed?
Peter Cowley
A combination of two reasons. One: that I see many entrepreneurial journeys that have failed. But I believe that with my experience and those of the other contributors to this podcast series, and then eventually the book, that we'll be able to help reduce some of those failures. I also hope that the education you'll get from this podcast series will mean that the relationship, you as an entrepreneur or you as an angel, with the other party is more open, is more trusting, and therefore would have a better result.
Chris Smith
Where do you see the problems then? Because you're saying that there are a lot of difficulties. A, why are there a lot of difficulties? And what are they?
Peter Cowley
The problems. Well, let's look it one side at a time. For the angels, there are many angels now. Partly due to crowd funding platforms, there are probably several hundred thousand.
Chris Smith
And angels are?
Peter Cowley
An angel is someone who invests in an early stage business where the risk is very high but the potential reward is very high. So the problems I see are that the investors are not necessarily-- and many won't want to anyway, but not enough of them are contributing to these journeys, using their own experience, the governance they bring to help the entrepreneurs. On the other way around, I think the entrepreneurs are making mistakes, as they will do. I mean, particularly with a young entrepreneur. How can you expect a 23-year-old to understand how to hire and fire for instance? And they can reduce the number of mistakes they make, by accepting help from their investors.
Chris Smith
So investors are generally a canny bunch. Entrepreneurs are a canny bunch. Why has it taken until 2017 for you to came along and say, "Look, we need this"?
Peter Cowley
Canny bunch. That's an interesting statement there. There's levels of canniness, experience, and intelligence that are relevant. But I think that certainly for young entrepreneurs, they clearly lack experience. And that experience can be provided, I believe, if an entrepreneur needs external investment by those investors. And the other way round, there are many investors that could contribute to the entrepreneurial journeys that don't, and would accept guidance on how to help.
Chris Smith
Tell us what your vision is for this project. So a person who joins up at the early stage and follows this through, what's the journey you're going to take them on? What will they get out?
Peter Cowley
So if you take it from the angel viewpoint, which the project will be aimed at initially, it's giving them the tools and the experience and the stories and anecdotes which allow them to both choose the investments they make more carefully and help those investments with the journeys. If you take it from the entrepreneur, they will-- I hope at the end of it, will understand more what the angel wants, the investors want, how to relate to them in a way that's more open and more successful so that when the entrepreneurs need future funding, that funding comes to them more easily. So in the end that the journey for the entrepreneur and the angel is more successful.
Chris Smith
Can we talk a bit about your journey? Because I had a look through your CV. I hadn't realised that a seasoned investor like you actually really only got into the game relatively recently.
Peter Cowley
Yes. Compared with some of my friends in the industry, yes. I've 10 years less than several people. I mean, there are angel investors that I know who have been investing for nearly 20 years Many more angels in the last 5 years. My first angel investment was about 9 or 10 years ago. What I'm also bringing to the table is a long entrepreneurial career with lots of ups and downs. So my first business was back in the early '80s, so that's 36, 37 years ago. I've had failures, successes. I've run a set of businesses which are business-to-business and business-to-consumers. I've hired people, I've fired people. I've raised finance. I've had all kinds of customers, etc. So it's that experience which makes me, I hope, more useful to entrepreneurs.
Chris Smith
Just to establish your credibility Peter, I mean you've won awards for being an angel investor. And you have a pretty substantial portfolio yourself now, don't you?
Peter Cowley
I do. I have more than probably I should have. I've just have 60 investments now. There are probably only about 30, 40 people in the UK who have taken it as far as that. It's quite hard work to look after the investments. But of course, what I've done is been on 60 investment journeys. So again, I've got a lot of experience as an angel for the ups and downs. I've probably invested in about 130 investment rounds. So that is also useful, which I will be using to feedback to the industry and therefore help angels and entrepreneurs.
Chris Smith
And what's the sort of scope for this project? Is it going to be weekly? Is it going to be monthly? What will a person who follows the Invested Investor journey actually see materialise?
Peter Cowley
So the current plan is that there will be a fortnightly podcast and blog. And that will lead to a book, which will be an e-book and a printed book towards the end of 2018. It appears there are a lot of people who want to help with this journey. So initially, the first two podcasts will be me interviewing a couple of entrepreneurs on their five, six-year journeys. So there will be me talking to angels, there will be angels talking to entrepreneurs. VCs will come into the mix, we'll have one or two professionals in there as well. So the idea behind it all is to provide interesting anecdotal stories which will help angels and entrepreneurs.
Chris Smith
What are you going to ask these potential investees?
Peter Cowley
Well, the one that we recorded a couple of days ago was very interesting. This was a business that was set up about nine years ago. We invested about seven years ago, and now it's installed in several thousand houses around the UK for suppressing fires, should they occur. But the interesting bit of it was the fact they didn't raise enough money to begin with. They ran out of money, they raised some more money again, and it's only when the product market fit that they believed, and we believe it was correct, was proved to be completely wrong and something else was found, the pivot, the famous pivot occurred and suddenly there was a pull for the product.
Chris Smith
And so is the idea here to show people various ways in which it can be done, various ways in which it can go wrong, so people can learn to identify some of Donald Rumsfeld's famous unknown unknowns?
Peter Cowley
Exactly, the unknown unknown. For instance one person who is very keen to do a podcast, and we'll probably do that before Christmas, is somebody whose company failed. He'd raised low millions of pounds finance and it failed, and he's learned a huge amount from that. The investors have learned a lot from that. And his story is really-- and he's gone about it in a very intellectual and measured way, but he's-- when you hear the podcast you'll realise it's a no-brainer that somebody-- it's a great way of advertising to an incredibly different market to get to, but he still failed. So it will be the positives and the negatives.
Chris Smith
So this is the classic thing about getting back on your horse, isn't it? That if you try something once it doesn't go right and then you walk away and never try it again-- ,any people say you've got to take some of these knocks because then you do learn by your mistakes. Hopefully, you don't get too demolished, never being able to walk again. And you do then get yourself back on your horse, and the next time you do make it over the fence.
Peter Cowley
I've heard it several times on the West Coast of the States, you've got to have failed first before you really are ever going to achieve success. My first business failed in 1991, at a time when-- if you talked to people who'd been around then, things were very, very tough. It was probably tougher than in the 2000 Dot-com bust. And in those days, back in '91, it was regarded very negatively in the UK. Nowadays it's much more positive, failure. The fact that people will pick themselves up and carry on. So, the experiences of failure clearly are useful. However, it would be better still if those failures didn't occur because a failure does mean loss of confidence clearly, loss of money, even if it's only the shareholders. And hopefully, no trade creditors. So, if we can reduce those number of failures then the outcomes generally from the early stage startup scene should be better, which will be good for the investors clearly, be good for the entrepreneurs, and will be good for the UK.
Chris Smith
I know I'll be tuning in. Peter, thank you very much. Peter Cowley.
Peter Cowley
Thank you very much, Chris.