Peter Cowley: Angel Investor of the Year

Summary:

Project Kazimierz presents Peter Cowley, with Richard Lucas and Sam Cook. Peter discusses angel investing and how
he came to be the UK Angel Investor of the Year in 2014. Richard and Peter talk about the different ventures
they’ve invested in. They also break down why Peter is much better at it. Finally, Sam looks into growing his
business, while Peter and Richard explain what success means to them.

Mentions and links:

Table of contents:
Peter’s Background

00:47 Sam’s introduces to the show
02:16 Richard discusses how he and Peter met
04:04 Peter, the Cambridge businessman, discloses his location
06:54 Peter introduces himself

Investing in the Spirit of an Entrepreneur

10:57 Defining one’s success
14:40 What brings people to angel investing
22:04 The entrepreneurial journey
24:52 Choosing people to associate with
26:23 Developing an entrepreneurial community
28:49 Discussing Peter’s life coach/span>

Judging the Market

29:48 Monetization of technology
32:30 Finding new problems and inventing different solutions
38:41 Recommendations to eastern European startups
41:27 Opposition of the Silicon Valley narrative

Doing Your Investment Research

44:26 How to not get Peter to invest in you
46:55 Type of angel investors to attract
48:31 Properly finding your references
51:11 Entrepreneur-investor relationship

Value of Outside Resources

55:44 The foreigner impact
56:57 Building international trading centers

Ending the Show Right

- 59:40 Proving Peter is somewhere else
- 01:00:53 Sam’s wrap-up
- 01:02:19 Richard’s quick recap

Transcript:

00:47
Sam Cook:
Hello again, Project Kazimierz, my name is Sam Cook and I’m here again as always with my
co-host, as
always,
Richard Lucas. Richard, how are you doing?

00:54
Richard Lucas:
Good evening, it might be morning, wherever you’re listening, so I’ll just say hi.

00:59
Sam:
Richard and I are enjoying a beautiful summer evening in Krakow, Poland – base of both of
our
operations. We’re
here
today, talking to Peter Cowley from… He’s the UK Angel investor of the year.
Cambridge based technology
entrepreneur,
personal and corporate Angel investor, charity share trustee
mentor and non-executive director and, says
here in
parenthesis “dad”. Really, Peter, one of the reasons
Richard suggests that we talk to Peter is to talk
about
this Polish
obsession with Silicon Valley and
maybe and break a little bit of that obsession with a discussion with
Peter,
who’s
from Cambridge in
the UK, which has a huge amount of venture capital expertise, Angel investor and also
great
record of
growing
multi-billion dollar technology companies, so with that I’m going to hand over to Richard here,
to do a
more
detailed
introduction of this friend here – Peter.

02:14
Richard:
Okay, I think I met Peter for the first time after a Pembroke College, Cambridge dinner in,
I
think it was “The
Eagle”
in Bene’t st.

02:26
Peter Cowley:
It was the home of DNA, wasn’t it?

02:31
Richard:
The home of DNA, talk about that…

02:33
Richard:
For anyone, who had the privilege or the good fortune to study in Cambridge University in
the UK
– “The Eagle”
is
something, that everyone knows, but it’s interesting, the way we met, that I’ve
been in contact
with a company
called
Arachness in London and thought that I’d like to meet Peter … I
called up Arachness and said
“Is Peter
there?”,
knowing full-well that he wasn’t and they said “No,
he’s in Cambridge” and I said “Oh, great,
how should I get
in
touch??” and they said “Call him”, so I
called Peter and said I’m on my way to Cambridge, I
heard from
Arachness, that
you’re around and you
called me back very soon and the situation we met and we met after a
Pembroke College
dinner at
the bar
and it’s a sign for anyone listening anywhere on the planet, that you’ve met an Angel
investor. If a
stranger
calls
you up, you might end up having your first meeting at 10:30 in the evening in a Cambridge
bar, but as a
result
of
that, Peter invested in “Vantage power” and then I invested in “Syndicate room” and rather than
me,
trying to
explain
who Peter is, it would be, perhaps better… And this was 3-4 years ago, wasn’t it, Peter?

03:53
Peter:
It was, probably 4 years ago.

03:57
Richard:
Okay, and perhaps, as well as introducing yourself as the Cambridge businessman, why don’t
you
explain where
you’re at
right now?

04:03
Peter:
Where I’m right now – at the moment, I’m actually in the outs, lays off, just sitting in a
friend’s
apartment,
looking
at the Mont Blanc in the distance, but I don’t was quite your question, was it? You
mean where
I’m in life, I
suspect?

04:17
Richard:
Actually, it’s quite interesting for people listening, to know that a Cambridge based
Angel
investor… it might
even be
motivating for people.

04:28
Sam:
He’s been somewhat successful, right?

04:32
Peter:
She said to the guy, who’s a part… , that he’s been somewhat more successful than me so far.

04:38
Richard:
That’s one of the things about the Angel investor – you always hang out with people, who’re
more
successful than
you
are.

04:43
Peter:
Exactly, yes! This guy sold his company around 17 years ago to JEC (Jersey Electric Company)?
in
the UK for $4.5
billion
in cash. I would just point out, that, in case he ever listens to this
podcast, it had floated
on NASDAQ and he
had a
relatively small, but still big enough percentage of
that, anyway…

05:04
Richard:
You don’t need many percentage points of $4.5 billion… to be quite happy, right?

05:11
Peter:
Anyway, I just spent a week with my wife, just wandering across the Med. coast of France,
we’re
buying house
actually,
so we’ve managed to find a house in the mountains, about 45 mins from the
sea and about 45 mins
from the skiing
in the
Pyrenees, so that’s my little bit of my success so far as
an Angel investor.

05:30
Richard:
What you’re doing is, you see, you’re doing your bit for the French economy

05:38
Peter:
I should be down in Greece.

05:40
Richard:
Exactly, you should be down in Greece, helping out…

05:41
Peter:
Or Portugal, or Italy, or whatever. Anyway, so I’m heading out from here to see my son,
who
lives in Geneva and
had to
fit in a meeting with a potential investor, quite large potential
investor about a deal I’m
leading at the
moment, which
is an IRT deal, which you know nothing about,
Richard, which I’m not going to tell about at the
moment, because
the
rounds are already over 4.

06:04
Richard:
Last time you told me that, I barged in on “Syndicate room”.

06:09
Peter:
You did, successfully, you probably had about a 5x, haven’t you, because you went in early?

06:14
Richard:
I got in… Peter always does better than anyone else. So, not quite as good as he did, but
I
did get into
Syndicate
room quite early and I feel that was your thank you for “Vantage power”.

06:32
Peter:
Oh, yeah, Vantage power, lots of stuff going on in there, that you don’t even know about,
‘cause
you’re only a
shareholder. But we’re not online, so… Where do you want me to start?

06:43
Richard:
Give yourself the 1 or 2 minute bio, so people know roughly… just start with that.

06:52
Peter:
Okay. I’m very open with my investments and my background in life. Actually, the people who
we’re buying
the
house from
actually did some TD on me and found I was Angel of the year in the UK and
they were really quite
frightened by
that,
how would they out-negotiate. Which was actually the case.
We negotiated harder than we probably
should’ve had.
That’s
another story. My background – engineer in
Computer Science in Cambridge, then joined the corporates in
London,
working
on microcomputers, which
was in the mid 70’s, which just shows how old I am. From that, I joined a small
supplier in
Bavaria, so I
spent 5 years in sub-Bavaria, just north of Innsbruck, working initially with one company,
that
then
sold
off to another company and I did my first stratup there, back in ’81 – rugged computer equipment for the
SME,
the
“Mittelstand”
in Germany.

07:48
Richard:
Was that Gerkom?

07:49
Peter:
There was Gerkom – “Geraete und Komputers”, or German computers – based in Gerzen. And that
grew… I
was the
founder of
that and then Matthew, who lives in Geneva, that I’m seeing in a couple of
days, was born 31 years ago,
and I
had the
desire to come back in the UK and started “CamData” which I
still have, after 30 years, it’s had its ups
and
downs,
which is a technology company, it’s just a
lifestyle business, I really enjoy running it. Came back to
the UK, I
am
going to skip a whole stack of
things, but I’ve set up a dozen businesses over the years, mainly in
technology
and proxy
development
and proxy development has made more money so far, than technology. I’ve also been heavily
involved
in
charity,
social enterprise over the last 15 years, or so… and things happen in life, I ended up
back
in
Cambridge
after 25 years away and then got re-embedded in the Cambridge system, which took a
while and my first
experience
in
Angel investing was… I was mentoring a guy who’d done CS in Cambridge
and decided to co-found a little
consultancy
company, turned into a product company, that was later sold
to a Cambridge company called Red Cape,
which has
about 300
people, privately owned and he went on to
better things, because he sold the company and gone to Y
Combinator in
the
States, Silicon Valley had
to come in in this conversation and then sold his business to LinkedIn, then
came
back to
Cambridge to
write books on data, etc, but that gave me an appetite for Angel investing and I got to
know the
guy,
who
owns this flat better – Robert Samson and we moved on to join the Cambridge Angels, lots happened in
the
last 5
years,
which got me to be Angel of the Year, which is not based on exit success, it’s based
on one’s activity,
one’s
willingness to promote, to teach, etc in Angel investing. The previous Angel
investor, Rajat, I’ve known
well.
He’s a
Cambridge graduate, taught me lots about, do you know him
Richard?

10:10
Richard:
I haven’t met him.

10:11
Peter:
No, he as an investor in Arachness, but not in Vantage power. And then I moved on, I’m on the
investment
committee of
the Angel co-fund, which has 100 million of govt./tax money co-investing in Angel
deals. I’m a fellow of
the
Judge
Business School in Cambridge, dot-dot-dot, it’s all on my website.

10:35
Richard:
We have show notes, or, like, links, that go out with the podcast and when we publish this
podcast we
also have
links
back to your website. As you say, you’re very transparent and it’s very
detailed. One thing, that I
think is
very
interesting to focus on is the fact, that you said, that
you’re Angel investor of the year, not because
you’re a
successful and you’re also at my humble age of 49,
but I haven’t made it yet. Last weekend I was lucky
enough to
be in
Lviv in Ukraine and I was doing a
workshop and I was talking about Richard and Morris McDonald and Ray
Kroc, who
bought
the chain from
the McDonald was 52 years old, when he started and the question of what one means by
success is
really
interesting,,
because so many people have so many different definitions and do you feel that your
success moment
is
ahead
of you? The place in France, the definition. The beauty of this podcast is that this might be
listened by
a
smart
13 year old in Zimbabwe, or a 79 year old in Azerbaijan.

12:11
Sam:
We’ve got a lot of Vietnam listeners for some reason.

12:14
Richard:
We get the data of where people listen, but imagine being listened to by someone who has
absolutely
no
idea who
you are or what your life is like and what your definition of success is. Because you’re
not
investing
just for
fun, there’s a reason, right?

12:30
Peter:
Absolutely – yes. What is success? The journey is the most interesting part of it. I mean, at
the end,
we all
hope, as
Angels, is that we don’t lose all that money.

12:50
Richard:
My comment here is, that the basic criteria of business success is if you’ve got more money
afterwards,
then
when you
started.

12:58
Peter:
But, in the meantime, investing in illiquid, not quoted shares means your money is tied up,
there’s no
way you
could get
your money out. It’s completely different for any other form of soft
markets or banks, or bonds,
whatever. So,
once your
money’s in – that’s it. You’re just going to wait.
You’ll have to wait a dozen years or more, before
anything
will come
out. It goes back to the phrase I
said early on. You’ll lose money before you make money, unless you’re
incredibly
lucky. I’m 60, in about
10 weeks time, actually, so I’ve spent some time, actually, wondering where I’m
going in
life
and ably
assisted by a wonderful life coach – Katy, who no doubt will listen to this.

13:50
Richard:
You better be careful what you say.

13:51
Peter:
Exactly. She’s used to this and you saw that blog the other day, she got mentioned in that. Or
hopefully
so,
maybe we
didn’t. I’m aiming for 65 as a round number and working towards something in
that time. Now, what that
might
look like I
don’t know, but I do know, absolutely, that I’ll enjoy the
whole of the journey through the next 5
years, as I
have in
the last 5, 10, 15, 20 years. So, success
isn’t necessarily monetary. It’s the enjoyment out of helping
build
businesses, not just the people, that
one helps on the way, but also the businesses themselves, the
markets and
all the
challenges, that one
goes through on those journeys.

14:39
Sam:
Peter, one of the things, that I’m really interested in, you and Richard are sitting here,
having an
inside
conversation
between Angel investors and I’m early in my business career, where I’m
still working on my own company,
definitely
looking at investing in the future, after a potential success
in the business – would be a great future,
but I
think the
Polish entrepreneur scene is very young,
especially in terms of investors and Richard is well known here
in
Krakow as
one of the original
investors in the Krakow business scene and someone, who people give a lot of credit
to,
whether or
not
they’ve given him the money back yet for helping found this business scene here. So, what led you in
to
becoming
an
Angel investor, because Angel Investor of the Year doesn’t necessarily bestow financial rewards and
into
very
illiquid,
probably quite risky and stressful form of investment. Why would go into that. I’d
love to have a
conversation
about
that with you and Richard about the motivations.

16:02
Richard:
When I was in Ukraine last weekend, 8 days ago, on the 13th of July 2015, we have to also be
aware of
the fact,
that
someone might be listening 100 years from now. It’s also possible, that they
might have other things to
do,
assuming
their times and countries named after you, Peter, and your
legacy… I have, like, 3 watch words: have
fun, make
money
and be useful and I think Angel investing
isn’t always fun, doesn’t always make money, but if you’re
spectacularly bad
at it, you won’t achieve any
of those things, but there’s a sense, that if you run your own business,
this is a
way of
somehow
deploying the experience you’ve got in a way, that’s much, much more useful, that simply giving
advice
in
the
aid business, when it was one of the less happy times in my life was when I was working for PA
Cambridge
economic
consultancy, which was co-owned by PA Consulting Group, doing aid work in Eastern
Europe. We were giving
advice,
but
there was absolutely no capital to implement any advice we were
giving and the nice thing about Angel
investment
is that
on the one hand you’re giving people
something, that they desperately need – which is money, but you’re
also
bundling it
together with
advice, which you hope they’re going to take. Advice without money isn’t much use. It’s
like
know-what
without
know-how and money without advice is also pretty dangerous. At least there’s the hope, that it
gives you
the
chance
to use what you know, as well as use what you’ve made.

18:08
Peter:
Yeah, you got to bear in mind, that Angel investing means a lot of different things and I was
on a panel
the
other day,
discussing exactly this at the UK Business Angels Association on a
conference, where I had to hand over
my halo
to my
successor, there was a guy actually – Michael Blakely
King, I didn’t know Michael Blakely.

18:26
Richard:
You introduced me to him, the Sainsbury’s Michael, yeah?

18:29
Peter:
Yes, exactly, I did introduce him you to, was about some retails thing, wasn’t it, yeah. There
are three
of
these, just
a very quick history lesson, the term “angel” came from the 1850’s, 1860’s,
which came from people,
invested in
plays.
They put money upfront, so the stage could be… could have
the props on it, the theater could be rented
and the
cars
could be paid, until it became live. Once it
was live and it was a success, then they would get their
money back
several
times, and if it wasn’t –
it would be closed in a week or two and they would lose their money. Those
were their
original
Angels,
which was 150 years ago, moved forward now. We’re business Angels and they’re really 3 sorts of
business
Angels
–
it’s the Angels like you and I, Richard, who put lots of effort in, we enjoy what we’re doing, we sit
on
boards,
we
connect, we advise and so on. There’s a certain soft of passive Angels, who hang around the active
ones
investing, but
they won’t do it face to face to meet the entrepreneurs and then of course – in the
last 2 years, 3
years it’s
the crowd
and these people will have probably no contact whatsoever with the
entrepreneurs, all the “Duke Dillons”
will be
online
and they’re putting in money, but they’re still
important to the ecosystem, I don’t know where I’m going
with
the
conversation.

19:51
Richard:
I think we migrated the question of what’s your motivation to a discussion about what’s an
Angel,
there’s no
problem
with migration, but it’s a good job to stick to “Today program” and the Today
Program, for those, that
don’t
know is the
mainstream national radio channel, where you have 55 secs to
get across your combined wisdom, we don’t
have that
time
pressure, but the question, coming back to
what your motivation was, I talked about mine and I
completely agree
with you
whether it’s
crowdfunding, whether it’s Syndicate Room or Crowdcube or any of the other crowdfunding
platforms.
Lots of
people
call themselves an Angel, but that’s a little like saying what’s an entrepreneur, an entrepreneur
could
be
a guy
selling bananas in the Hive st., right?

20:47
Peter:
Yes, now I remember the question. You answered your part of it and mine is identical to yours,
Richard,
we do
it,
because we really enjoy it, we do it for the fun, we’ve just got one of the moments,
we’ve always got
one other
moment,
we’ve always got ones around. We’ve got 28 down rounds, that’re
going round by email, that’s not much
fun. When
you’ve
invested 60% and it comes down as 3% in the next
round …

21:17
Richard:
They say it’s like tearing up five time notes in a hell storm, right?

21:20
Peter:
Yes, but the ups are excellent. Growing businesses without actually having an executive role,
not even
necessarily, if
you come in as an Angel, or a non-exec director, you don’t do this every day.
There’s an awful lot of
grief you
don’t
have to see and having had 25-35 years of grief to some extent
running businesses more or less, that’s
very
relaxing,
compared to having to fire a lot people or sack
a customer or something and being slightly distanced
from it is
actually
being more enjoyable, that
being in there with the … of the business.

22:04
Richard:
It’s now

22:55
in Krakow and 7 hours ago I was firing someone. Given the time lag, he’s probably
not
the
person,
who
follows
me on the Project Kazimierz podcast, but it’s a stress, in fact, he took it very well, but you
do things
as
an
entrepreneur, I think the image of the entrepreneur, based on watching the Hollywood movies, they
leave
out a
lot of the
nasty stuff. You regard your entrepreneurship journey as one of trial and
tribulation. Did you have any
happy
moments as
an entrepreneur?

22:47
Peter:
Yes, I had lots of happy moments, I made lots of lifelong friends – not just my staff, but
also
suppliers and
customers.
I’ve had lots of successes, but I’ve also had some pretty nasty failures
as well. When CamData
went
bust, I had
nearly
30 people there back in 1991, because of the UK
recession. Not sure where the listener was, but
the
late
80s,
early 90s
interest rates in the UK
went up to 17% and all … were switched off throughout all industries –
it
was
incredibly tough.
Really,
really mentally tough. I resurrected the business and it’s stayed very small since then,
but
that was
very
painful.
Another example is where I was building 3 houses speculatively, borrowing huge
amounts
of
money
from
all kinds
of directions, including credit cards and everything – then 9/11
happened. 9/11 – what’s
happening
next?
Where
will the
world end up at this point? There was
nothing one could do about it, instead of just hope and as
it
turned out,
everything recovered in the
UK and we carried on and sold those houses, but of course, there’s
huge
ups
and huge
downs,
I
certainly don’t want to make a list of those, but it’s all part of life, isn’t it?

24:01
Richard:
The way I see it is that, this is my personal story and I don’t think, that it necessarily
makes
sense
for
everyone, but
I think it’s worth, people are listening to this, the hero startup
entrepreneurs is quite
powerful,
global image
now and
it’s well worth puncturing to some extent –
this is a life, where your work is more important to
you
than
normal, if
it’s your business, you’re
a shareholder in the business, you can’t just drop it when you go
home
and if
you do
drop it,
it
would be very stupid. Given how many hours of our day, weekend, month and year in our life we
spend
working,
it’s
actually
better, a better way to live, to be more engaged with what you do, than not, so
thoroughly
recommend
it,
even
if it’s a bit different. Do you find, Peter, that it makes you hard for you to engage
with
people,
who
have jobs
they
don’t like, that it’s quite hard to put yourself in the shoes of
someone who has a regular job,
they
don’t care
about?

25:04
Peter:
Absolutely. I don’t mix with many of these sorts of people and never have done.

25:12
Richard:
So, if you’re one of those people out there listening, Peter isn’t going to be your friend.

25:19
Peter:
But one chooses one’s friends.

25:21
Richard:
Yeah, but not necessarily they choose you.

25:24
Peter:
Maybe. Certainly the family, you can’t choose. That’s not a jibe at any particular family
member
of
mine. So, of
course
I’ve got friends from university, the way you’ve got, Richard. We’ve
been through standard
lives,
people’ve been
charted…

25:44
Richard:
Boring, ordinary, dull.

25:46
Peter:
Exactly, I’m thinking about a particular one.

25:51
Richard:
I’ll send him a link.

25:55
Peter:
He’s made some great stuff in architectural work, including the Tate Modern, so he’s done lots
of
stuff,
but
look
at his
life, he joined a company when he was 22 or something and now he’s retiring at 62, so
he’s
stayed
for 40
years
with the
same company. So, I struggle to relate to those people. I
surround myself with the Angels,
particularly
the ones
who’ve
had entrepreneurial careers or the
entrepreneurs themselves, so those are the people I mix with,
I
like
to spend
time
with.

26:22
Richard:
One of the other people we interviewed already for this podcast – Ela Madej, I think her
podcast
has
already
gone out.
We were chatting about this issue and had the idea of entrepreneurial
Kibutz or entrepreneurial
community, where
people
like us will live in a commune and it turns out it
already exists, this has started happening in
America. I
remember the
first time, when it really hit me
was when I was talking about annual holidays and here in
Poland
there’s a very
generous social, like in
Communism, where you get 23-26 days of paid holiday here, plus Poland
is a
religious
country,
so for
those, listening 2000 years from now – religion was something, that existed at this time.
Anyway,
but
the
point
was, we were discussing this and I was saying, that it’s crazy – you call it a year’s salary and
you
don’t
get
an year
salary here in Poland – 26 paid days of holiday plus 14 saints days. They ought to call it a
10
month’s
salary.
It’s
crazy – you pay for the year and you only get 10 months and they looked at
me like I was
completely
crazy: “How
dare you
suggest, that the annual holiday it’s something,
that’s quite unfair?”, but right now I’m really
struggling with
my
directors on vacation right now and
it’s very difficult to run my business with holiday.

28:07
Peter:
Yes. I don’t know how big your company is, I don’t remember. You probably told me, but there’s
a
point
at around
25-30
people, where the entrepreneur will start to struggle with that, whether
it’s a management team
and
below. They
won’t
have the same motivation as the entrepreneur, the
entrepreneurial founders and that happens
again in
the
lower
hundred.
But I, personally, for all
the years I’ve been around have not experienced that and I’m not
looking
forward to.
If still
involved
in a company, that’s got 100 people.

28:44
Richard:
You should talk to your life coaches about that. What’s your life coach called?

28:52
Peter:
Katie. Katie Tuncer. She has a very interesting story, I’ll tell you very briefly. Caius
graduate
in
Cambridge,
McKinsey’s performance coach for the met police in London, interesting stories there and she
now
coaches
for the
sports
industry in the UK, not for the sports men, but for the management. And
in the meantime she had
a
little
startup
called
“Ready Steady Moms” in which I got involved and
me helping her, she noticed there was something
wrong
with my
life – I
refused to say no to
anything, she’s got me saying no.

29:31
Richard:
I think we should talk to her mother, because I suspect we have a strong genetic connection.
Although
the
time
doesn’t
really work, but I always say that one of the reasons my life looks the way it does is I keep
on
saying
yes to
any kind
of strange proposals. Let’s try and draw the spec towards technology,
because I think the point
of
what
we’re
doing is
to give people valuable lessons about what sort
of things are worth doing, clearly in an ideal
world
there’s a
harmony
between what the investor
wants and what the entrepreneur is doing. When you’re considering an
idea
to
invest in
and
anyone
who’s listening – go to petercowley.org.

30:24
Peter:
Org, .com is the Peter Cowley, that brought “Big Brother” into the UK.

30:26
Richard:
Okay, petercowley.org, which makes you sound like the United Nations.

30:31
Peter:
It’s for charitable reasons, that’s why.

30:36
Richard:
petercowley.org, I don’t know why you pealed with laughter at .org, but when you’re looking
at
technology as a
business
and without going into the spreadsheets and the cashflow projections, what
are the things, that
are
really
important for
you to make you feel excited, interested, like this
might be something, that would work. Let’s
say,
before
you’ve met
the people…

31:04
Peter:
Okay. Obviously the people would come first, but we ignore the people. It’s the technology
at
all,
it’s
the
market and
the disruption they’re going to cause in the market, assuming the
market exists, or the market
they’re
going to
create.
That’s what matters. The technology is
unlikely to excite me at that point. It will start to,
cause
I’m
a bit of
a geek
later on,
particularly when I’ve met the people, but it’s not that, really that matters, it’s if
they
can
actually
generate
a monetizable product, which is very European, I know, this is probably my German
background,
having 5
years
there
and UK, if you go to Silicon Valley, they don’t look at monetization at all, they look at
that
moment
later
on.
You just back something and know or not know and assume, that monetization will appear if
it’s
needed
to. But if
you
look at WhatsApp, it was about a 40x revenue, bad example, probably,
because there won’t be many
of
those
around, but I
need to see they will at some point in the first
n years, where n is a pretty small number, be
generating cash
from
customers and it’s probably less
than 1 for that and then some sort of break-even, that’s
probably
less
than
3-4, where
the cash
isn’t required any longer, except to really speed up growth. So, it’s the market
around
the
technology,
although I really tend to fall in love with technology, occasionally, which I
really shouldn’t
do.

32:29
Richard:
Says the market… For me it’s the problem, because when I lose money, I assume other
people
have my
problems
and I
feel, that I’m in a small minority, where people have the same
problems as me, but one thing
it’s
for
certainly
– how on
Earth is it going to make money and I
was actually looking at a business plan, it wasn’t even a
business
plan,
it was a
strange Power
Point presentation, describing some combination between shopping and the lottery,
where, I
think
the
idea
was that on one hand you could buy tickets for the national lottery, on the other hand you have
Amazon
and
somehow
you’re
going to marry up the experience of buying a lottery ticket with the experience of being
at
Amazon. I
just
couldn’t
happen… If they wanted to win the lottery, they wouldn’t be happy with getting a
toaster.
And
if
you’re
on
Amazon you wouldn’t be happy hoping, that someone might win a toaster, but there’s a sense of
a
very
clear
problem.

33:43
Peter:
Yes, exactly.

33:43
Richard:
… where some will be thrilled to have a solution.

33:50
Peter:
Have you noticed, that these problems are getting more than you’d find now? There’s an awful
lot
of
similar
stuff
floating around. The power of the internet, or the hardware solutions, which I
know Eastern
Europe
is
pretty
good at,
then other applications will come out, but I’m just seeing
the same old loyalty type solution in
reverse
e-commerce, or
something that’s improving the ability for
an e-commerce shop to understand it’s customers
better,
using
technology,
etc. That’s a very
different thing to crack and there are a lot of people working on it, bit
I’ve
just
seen far
too
many
similar type ideas floating around.

33:38
Richard:
I totally agree, I think… and again this is something, that’s really valuable for people
based
in
Krakow or
Poland to
be aware just how small subset of global problems we experience here,
but I noticed, that people
who’ve
got
interesting
ideas tend to be deeply exposed to a niche. 3 or 4
days ago, I was talking to a guy, who does AC
systems
for
nuclear
power stations and they were
having problems with their documentation – how you document your
system
design and
they
said it’s
crazy, we have plotters, these big A1 plotters printing out descriptions of what you
meant
to
do
and
it’s
keeping track of who’s got which diagrams and you’ve got these engineers on fabulously high
salaries
wandering
around
in
the nuclear power station and you really don’t want them carrying the wrong diagram and once
this
guy
was
a
potential
business partner, not a startup guy with a business idea. But you think, this guy actually
knows
about
the
problems of
people, how to do maintenance in nuclear power stations, I bet there
really are problems there
and I
bet
there
aren’t
many people trying to solve them, whereas if
you’re a regular consumer business, like people
getting
shopping in
Tesco
or Orscheln there’s any
number of people exposed to problems, then the chances no one working on
it
anywhere are
really
quite
small.

36:18
Peter:
Yeah. Having said, there’s still a market, I believe, not all companies need to global. If
there’s
a
market,
say, in
Eastern Europe, comprised of 7-10 countries, that’s just in those countries, that
will be good
enough to
turn
into a
decent sized business in many areas. Something that’s specific.
One doesn’t have to think
globally
for
everything.
Potentially, taking and copying something, that’s
already in the States and dropping … the
idea,
not
all the
technology and the team and dropping the
idea even into Poland, will be a decent business you’ve
made
out of
that and we
made of that. You
made money from handheld barcode scanners. You made quite a lot of money of
that,
didn’t you?

37:03
Sam:
Still working on it, right?

37:05
Richard:
It is certainly the case, that I’m making money, it’s certainly the case, that I didn’t
invent
the
barcode.

37:12
Peter:
Exactly, there’s a business there, so …

37:15
Richard:
No, no, but… I don’t know if you had that back in February, for anyone listening in the
distant
future,
I went
back
into the lead entrepreneurship role of being the CEO of the barcode systems company and
there
are
things
we’re
making
ourselves, but one of the challenges of that business, from a
fundamentals point of view, is
that we
don’t even
have own
products, we have the pleasure and
privilege and joy of being partners with global corporations
like
Honeywell
and
Zebra, both of
which’s revenue stretch into the tens of billions and they’re important as
vendors,
their
customers are
important,
but our business model is very dependent on other people’s business models, which is
a
little
bit
like
…
people might have heard of a company called Zynga, which made a game called Farmville and Zynga
was
very,
very
successful within the Facebook ecosystem, but once Facebook changed it’s rules, Zynga was
almost
out
of
business
and I
think there are a lot of business, that have a tremendous dependency
on other businesses and I
set
up
this
business 20
years ago, I have the insight, it’s very
important to have something, that you’re good at,
that’s
hard
to be
taken away
from you.

38:35
Peter:
Yeah, that’s right. Defense ability, yeah.

38:40
Sam:
Peter, one of the things… you mention in there, that you don’t need to be global to make a
good
business,
but
you came
to Krakow or Poland a few years ago in Bitspiration and one of the things, that struck me
as
I’ve
been
here is
the
tremendous aspirations of the business here to reach a global market.
We’ve seen that with some
of
the
VC funds
here in
Krakow with Innovation Nest and some of the
other ones. While you say you don’t need to go
global to
have a good
business, what would you
recommend, that Eastern European, Central European businesses do and
look
for,
because
I think
some
of your earlier comments show, that maybe things are getting a little bit stagnant in terms
of
the
innovation.

39:40
Peter:
Yeah, well first of all one’s got to decide how big you want the business to be and not
everybody
can
produce
another
Facebook
or another Google, so if you as an individual, a team are looking for car changing,
house
changing,
life
changing
amounts of money on an exit. For most people it would be life changing as an
entrepreneur,
but
as
an
Angel
investor you may need a smaller amount. They ought to look at it in terms of their like. Are
they
wanting
to
build a
business, that they could pass on to their children or grandchildren, etc or are they wanting
to
build a
business they
want to exit within a number of years – you’ll have to say yes to that, if you
want an Angel
investor.
Say, we
want to
build a lifestyle business, because Angels will run away
tomorrow. Say, it sells for 50 million
euros.
They
probably
have revenues of 20-30M euros at that
point, how fare are the boundaries of the country, that
it’s
formed in,
does it
need to be, if at
all. It’s not always going for the stars. Go for something you want to achieve
in
that
part
of
your
life. And many entrepreneurs, that are 25 or 35 will almost certainly become serial
entrepreneurs,
so
they
can
allocate
10, maybe 15 years maximum, if it’s successful to that business, before moving on to
something
else
and
you
don’t need
to grow a billion dollar business in that time, to have a
massive difference in your lifestyle.
And
the
risk of
going
for a billion dollar business, the
chances are you’re going to fail even more than for a 50
million
euro
business and
therefore temper
your dreams.

41:26
Richard:
It’s brilliant. I think, that such an interesting perspective, because of the Silicon Valley
narrative
is
go for
the big
one and

41:40
Sam:
An unicorn.

41:41
Richard:
Do you know the phrase “the unicorn”?

41:44
Peter:
Of course I do

41:48
Richard:
The unicorn is a startup, that’s worth more than a billion dollars for anyone listening, who
doesn’t
know
that.
I
recently came across that and was a little suspicious it was a bad nightmare and we’re a bit
handicapped,
I
don’t know
what people have heard already, but I certainly think, that from my point of view, the point
of
a
business is to
make
customers happy and make money and if along the way you reach a situation,
where you reach a
business,
that’s
worth a
100 million or a billion or tens of billions or hundreds
of billions, good for you, but it’s by
no
means
a
failure if
you’ve got happy customers and
you’re making 5 mill pounds a year profit from my perspective –
that’s a
huge
success.

42:35
Peter:
Exactly, yeah. In fact, that’s what I was saying earlier on, you might have not heard
–
if
you do want
to create
a
lifestyle business, one you could be running for 10 or 15-20 years,
it’s difficult to
get
investors
involved in
that,
cause they usually want to capital exit. Having
said that, there are Angels out there,
certainly less
sophisticated
Angels Investors, who’ll just want
the dividend, a regular income from a business. So,
there
are Angels
around,
who
don’t just want
to see an exit occurring, but there aren’t that many of them in the UK.

43:13
Richard:
Yeah, my American business partner Kevin Fountoukidis, I don’t know if I told you, but
Argos
translations
is
rebranded
as Argos Multilingual, where we acquired a company in the States, bigger than we are and
is
doing
incredibly
well.
He
always says: “When you’re making a profit you’ve always got options” and I think
there’s
a
really
powerful
lesson in
that. If you end up with more money, than you started with,
you’re not on that
frightening
runway of
running out
of cash
in a few years time.

43:49
Peter:
Yes, exactly. Having cash also means you don’t have to raise money at times you
don’t
want
to, which is
always a
problem
with the journeys of these … At Arachness we’ve been
lucky, that we’ve always raised
the
money on the
way up,
there
have been down rounds, but I’ve
got plenty of examples around, though none appeared in
my
inbox. Well,
I’ve been
speaking about
other companies, that’s looking like a down round in one of my other
portfolios. That’s
one of
the
advantages
in terms of learning and one of the disadvantages in terms of just the size
of
my
portfolio.
There’s
always
activity happening – good and bad.

44:24
Richard:
Okay, I think we’re going to wrap this soon, but I’d love to share with our listeners
what
the
annoying
features
of a
founder. If you think about things that really, really annoy you about people
who found
businesses, that
you’re
considering investing in, or you have invested in and you wish you
hadn’t, because
they’re
so annoying.
Because
British
people aren’t particularly good at
expressing their emotions, but when it’s not face to
face
– this is
your
opportunity
to say the 3
or 4 things you shouldn’t do if you want to really, really annoy…

45:04
Peter:
Yeah, maybe not. I could probably condense those into 2 – one is lying. Being found out
when
lying,
whatever
the
reason,
during the process of doing DD can be really, it would almost certainly lose my
ability
to
invest. We
had one
for
instance, where there was patent, and they were so similar –
this is a cryptographic
piece
of software,
were so
similar,
that they hadn’t bothered to tell us.
Now, it could be argued, that this was part of the
DD,
but they
should’ve
pointed
that out in the
beginning. And then the other big one is being able to listen. It’s so
important, that.
Most of
the
listeners
have heard of something called pivoting, which is where a business changes
direction, doesn’t
pivot
completely,
isn’t going through 360 degrees, but there’s a change of direction. It’s so
important, that
the
entrepreneurial
will listen to the older grey and white, white haired people, the wise
people around,
but also
the
market
specifically. Listen to the customers and then change directions to what the
customers need, so
this a
combination
of emotional intelligence and not having any or much arrogance. But having
said
that
entrepreneurs
need
to
be very single minded, they need to bulldoze their ways through things if they’re
going
to
achieve
something.

46:55
Richard:
I’d also give… All the people listening here, either potential or existing
entrepreneurs,
I’d
also
say: flip
around
the lying and being able to listen to your Angel investors. You can think, if
they guy
gives
me $25 000,
I can
put up
with him being a liar and having no interpersonal skills,
but you’ll regret it within
the
next 5-10
years, if
you’ve got
an investor on your board, who’s a
liar or who can’t listen, because it’s worse than a
marriage, isn’t
it?
They’re there
forever,
right?

47:30
Peter:
Exactly, yes. You can dissolve a marriage but you cannot dissolve the contract you have
between
the
investor or
company
and the entrepreneur. And you’re exactly right. Doing the DD average. This one
I
mentioned
early on,
where I’m
going to
meet the guy, in fact this second guy now in Geneva in
couple of days time. They did a
huge
amount of DD
on me.
Much
more than I thought, I gave them 3
names, including Vantage Power… including Alex from
Vantage Power
and they
went
around and they had
a look, because it’s all on my website. They went around and picked
some
other
CEOs,
just
checking
up on me, before they’d even talk to me. Very, very important, that’s what I’m
doing in
Geneva, I’m
checking my
potential co-investors. So, it’s not just me and the entrepreneurs.
It’s me and the rest
of
the
investors.
Because I
know what it’s like when things get tough. I’ve
got to understand how badly some people
can
behave in
those
circumstances, as well as you can – work
that out.

48:30
Richard:
You’ve led to a point, which is well worth people noting, which is taking references in
both
directions
is
always
a very
good idea is to ask someone here, considering investing in, as someone who knows you
well,
who
you’ve
done
business with
for a number of years. With him I can take a reference and sometimes the body
language
answers the
question. You
know
before they’ve even responded. You see the weird eye
movements and they think they’ve
been
rumbled and I
remember, I
can’t possibly name him online, but
there was somebody, who claimed they had hundreds of
startups and I
asked
them for
some examples and
I’m 49 year old and this guy was 30 and I can’t say I’ve done hundreds
of
startups.
And I was
actually
so
curious, I asked him for a CV and I said I want him to work in one of my startups and
during the job
interview
I
asked him: “How many salespeople report to you?” and he said: “Hundreds.” The idea of
someone having
hundreds
of
reports.

49:43
Peter:
That’s ludacris.

49:45
Richard:
It’s beyond ludacris. I said: “Well, how many sales did you handle this day?” He said
“Ten”.
A
hundred
times ten
and
then I said “What was your conversion rate?” and “How many of those proposals
lead to an
offer” and he
said
“Ten”, so it
was complete nonsense and he was lying, but apart from
the two issues you’ve made of
lying
and of
listening…
The thing
that annoys me, which isn’t a
dealbreaker is the entrepreneur who believes, that the
only
thing I’ve
done in my
life is
investing
in his business and he imagines, that in a drop of a hat, I can be in his
office
or her
office
within
a matter
of days or hours and I think there’s a kind of subconscious negative emotion
among some
founders that
the Angel
investors get him an unfair deal, because all they’ve done is put in
the money and
they’ve
done all the
work and
by
revenge they want you to come into their office by
2pm next Thursday, which you can’t
possible do. Maybe
that’s
a thing
locally here in Poland and your
investees in the UK don’t behave like that, but do you
get a
sense, that
they
feel, that
you
ought to be available more than you are?

51:16
Peter:
No, no. I’m surprised you say that, Richard. Maybe I make sure, that those rules are put
on
earlier
on.
Or maybe
people
feel that I’m so busy – they don’t ask me. But no, there’s hardly any time I feel
I’ve
been
nagged or
people
pushing me
too hard to do things. Alex Shey from Vantage Power had to
remind me today to answer an
email in the
weekend,
but I’m on
a holiday at the moment, so no, I
haven’t met that, Richard. I’m sorry that you have.
Maybe
that’s
something due
to the
Polish-British
divide.

51:58
Richard:
I think, that there’s also a lesson to be learned and I’m not sure how to share this
about
the
professionalism
of
the
Angel investor. Do you think you’re a professional all along, or the presses of doing
with
the
Cambridge
Angels
or
representing Marshalls, it’s not called Marshalls group, is it Martlet?

52:20
Peter:
Martlet is the brand, which is the investment off of the balance sheet of the Marshalls
company,
yes,
it’s like
a family
office, but it comes off the corporate balance sheet. It’s called Martlet.

52:30
Richard:
Because there’s one way of doing it, which is my way, which I’m not sure I recommend,
which
is
learning
by doing
and the
other way of doing it is by bringing professionals, who tell you what to do
and I
reference
you as being
a more
professional Angel investor, because somehow I see outcome in
terms of those wonderful
confidential,
unfortunately,
Vantage Power board meetings, where I wish I
could show them to other people to show
them
how they ought
to be
done,
because it all seems very
well organized, but was it learning by doing, or did
someone…

53:05
Peter:
No, well. The Angel investing I think… I’ve probably done my 10 000 hours now. And
I
don’t
know if
you’ve heard
the 10
000 hours…

53:14
Richard:
Yeah.

53:15
Peter:
They say if you pick up a violin you’ll play it well in 10 000 hours.

53:18
Richard:
That’s Malcolm Gladwell’s “Outsiders”, isn’t it? That’s where the 10 000 hour …

53:25
Peter:
Okay, yes. You’re more learned than I am, Richard.

53:27
Richard:
But you’re richer than I am, so…

53:31
Peter:
Far from it … That’s nothing to do with it, it’s not about doing well, it’s
enjoying
life,
surely. I
hope
nobody at
the end of the podcast thinks, that you need to be
wealthy to be an Angel investor or
that
you’re doing
it for
wealth
… That isn’t the case at all.
I must get that across. You do it for fun.

53:45
Richard:
I think the answer is you have to be like Peter Cowley, right?

53:49
Peter:
Do it my way, exactly.

53:51
Sam:
Angel of the Year, Angel of the Year.

53:53
Richard:
But, coming back to the 10 000 hours.

53:57
Peter:
I’m obviously somewhat older than you, I’ve set up loads of businesses, possibly
more
than
you and I’ve
also
been
involved in charities in a very big way, I’ve been a chairman of
5 charities and we
treasure
a couple of
them
and I’ve
done just stuff with people and businesses
and routes of businesses for so long in so
many
different
ways. So,
that’s on
the non-exec
management side. On the side of the Angel investing… just time and the
number
of deals.
I’ve had
4
deals
coming today, for instance, you know… None of which I’ll probably look at. It’s just
stuff
floating
around
the
whole
time ,just throwing time at it and what must rev off from that is learning and
experience.

54:40
Richard:
Yes, I’d say, it’s something, that I didn’t recognize, when I was in my early twenties
is
that
even if
the
person, who’s
got experience is someone you don’t agree with and even if you don’t share
their values
and
you don’t
share
their
insights, you can still learn a lot from hanging out with
people with experience,
because
even as you
disagree
with them
you become aware of processes
you’re not aware of for example.

55:07
Peter:
Exactly, yeah. Just mix with the right people, you point out the Cambridge Angels. I’ve
learned
so much
from the
Cambridge Angels. 40%… probably 2/3rds of those had technology entrepreneurial exit
and
the
amount
I’ve
learned in the
5-6 years I’ve been involved there was so much. You’re the Godfather of
Angel investing
in
Krakow, maybe
that’s
too
much, Richard, but you must be teaching all sack of
other people, but imagine if there
were
10, 20… 60
of you
in
Krakow.

55:44
Richard:
Well, I think there’s also the role of the foreigner here in Poland is more significant.
Obviously,
Cambridge
is
famous
for sucking in talent from all over the world and I think it’s something Cambridge can
be
very
proud of
– this
openness
to non-British ideas, particularly at times like this, but I think foreigners
somehow
get a
slightly
bigger
status, than
they deserve and there’s an economic impact. Just
because we bring in a certain global
perspective, that
Poland
was
denied, thanks to Communism and
the bad things that came with it, so I think we get
slightly
more credit
over
here, than
we
deserve. I don’t know if you agree with that, Sam.

56:36
Sam:
I think we definitely get a lot more credit than we should, but at the same
time
foreigners
are
providing a key
service
here, in terms of bringing best practices and
outlooks from places like Cambridge and
Silicon Valley and
other
places.

56:56
Richard:
Actually, Peter, that’s one question… I think we’ve gone beyond, we had a break in the
middle,
due to
a
technological
difficulty, but, Peter, do you have much contact with foreigners in Cambridge?

57:06
Peter:
Yeah, absolutely, tremendous amount of foreigners. Students, who come over, post grads,
entrepreneurs,
who
end
up in
Cambridge, either because they’ve decided it’s the place to be based, because of
the
support
ecosystem.
And of
course,
in London as well, if you take Vantage Power, I think it’s
a boardup on the wall now. I
think half the
staff of
Vantage
Power board is not from the UK, over
half the staff of Arachness isn’t from the UK. My
whole
life is
full of
people, who
weren’t born…
who’re not UK people.

57:42
Richard:
Certainly, from my perspective, it’s something I keep on ramming home, historically
Krakow
and
Poland
were very
much
international trading centers and I think this combination of right-wing free
market
nationalists and
racist
things were
bundled together and I’m certainly a free marketeer, I’m
certainly into
entrepreneurship,
but I think
the nice
thing
about a startup and entrepreneurship
community is how almost everyone sees the value of
Japanese,
Brazilian,
American,
Canadian, Irish,
whatever technology. It’s just like you don’t think in national terms
anymore, do you?

58:27
Peter:
Not at all. Not in my working life, working as an entrepreneur, an Angel. I probably
do
in
other areas,
when I
play
bridge in Cambridge, but

58:45
Richard:
You’d never play bridge with a Pole, right?

58:48
Peter:
Why, are they known for doing it a different way or something?

58:54
Richard:
Actually, my daughter, Helena, who’s now 18… when she was 13-15 went to a lower
secondary
school,
which
had a
bridge
specialization, it’s the only school in Poland, that specialized in bridge and so they
produced
bridge
teams and
I think
she’s on holiday in Croatia right now, but I think she’d be mortified to know,
that my
business partner
won’t
play
bridge with her, because she’s Polish.

59:19
Peter:
She’s so good, I guess.

59:22
Richard:
Actually, she wasn’t part of the bridge specialization. She’s very good at magic and
conjuring,
so I’d
be very
careful
about playing card games with magicians, that’s a bad way to go.

59:38
Peter:
Yeah.

59:39
here in Krakow, which is the same in France with your view of
Mont Blanc. Is Mont
Blanc
illuminating
at night. Can you see it?

59:53
Peter:
You cannot see it, no. At the moment, I can’t see the moon, actually. No, I can’t
tell,
sorry. Not from
this
view.

1:00:02
Richard:
Can you give us any other personal detail, to make sure people realize we’re not
sitting
at the same
studio,
lying.

1:00:02
Peter:
Um, what can I say? I have shorts on, it’s been a lovely day, my wife’s upstairs,
wondering
when this is
going
to
finish, so she could come back down to bed. What else I’m going to tell you… I’ve
got
my
hybrid-electric
vehicle
outside. Not that there isn’t somewhere do plug it in to charge it up here
in
France. What else you want
to
know?

1:00:26
Richard:
I think that’s just 3 pieces of information you could’ve possibly made up.

1:00:34
Sam:
Especially the wife waiting for you.

1:00:37
Richard:
As you know, I’m long divorced, but I hope in 10 years time. I can make a very
inappropriate
mark, but I
think
I’ll
just… I’ll hand over to Sam to wrap this up.

1:00:51
Peter:
Good, okay.

1:00:53
Sam:
Peter, thank you very much for the insights, I think, that anyone who’s in the
Eastern
European market,
looking
for what
top investors are looking for, not necessarily at the VC stage, but
definitely at
the Angel investor
stage,
where I
think Poland definitely needs to develop, I think
this is great insights and I think
also your ideas on
what
your goal
should be as an entrepreneur
and thinking first about your marketplace and what
problem you’re solving
is a
great
insight, so
thanks again for joining us and Richard, thank you again as always for
bringing in your
contacts to
show
and
finally – thank you Project Kazimierz listener for investing your own time, whether
you’re in
Poland,
where most
of our
market is, but also one of our other 80+ countries around the world, that
listen to
this show, I hope
this was
insightful for you, in terms of one of the world’s top Angel
investors, especially
in the UK, Angel
investor of
the Year
– Peter Cowley. Things you should be
doing in terms of growing your business, so
thanks again for
listening to
the show
and looking
forward to seeing you on another episode, Project Kazimierz.

1:02:18
Richard:
Yes, good night and remember if you’re not live on air and you can’t listen, then
you
can’t get in touch
with
Peter but
if you are listening and you tell the truth and you have a great
business idea, get
in touch with Peter.

1:02:28
Peter:
Richard, take them to our website, not all at once, please!

1:02:34
Richard:
Okay, good night then.

1:02:35
Peter:
Good night. Thanks very much.

Jed Crews

Podcasts20

Join our newsletter

Get the latest news, podcasts, videos, and updates from Project Kazimierz.

subscribe now!

Peter Cowley

Peter Cowley: Angel Investor of The Year (Episode 16)

Podcast Details:

Summary:

Transcript:

Search podcasts:

Jed
Crews: Inside the Minds of Polish Entrepreneurs (Episode 20)

Gareth Mitchell and Bill Thompson – How Poland Fits in
the European Tech Landscape (Episode 19)

Michał
Borkowski: The Best Learning Experience is in the Community (Episode 18)

The end of Project Kazimierz and a new beginning with NBN

Richard Lucas interviews Adam Davidson CEO of Trident Royalties (s5ep22)

Interview with Mike Southon, a serial entrepreneur and best-selling author (s5ep23)