Business mentor and angel investor Mark Lyttleton provides founders with the financial and strategic support necessary to
establish and scale successful businesses. This article will take a closer look
at angel investment, exploring the key motivations and pitfalls from the angel investor’s
perspective.
An angel investor is typically a high-net-worth
individual with intimate experience of launching, running and scaling their own
successful business. Angel investors come from a variety of different
backgrounds but are defined as an individual who invests funds in a small
business in exchange for a minority stake.
Jonathan Fitchew made his name and fortune as the co-founder
of Pareto Law. He subsequently left the company following the death of fellow
co-founder and good friend Andy Sawer. Today, Jonathan Fitchew serves as CEO of
Apprentify Group, which recently bought out The Juice Academy, a company that
provides digital marketing apprenticeships.
One of the best-known entrepreneurs in the North
West today, Jonathan Fitchew’s other business interests include Venn Digital,
Netcom Training and Next Connex. In addition, he is also one of a growing
number of angel investors in the UK, having invested a ‘significant six-figure
sum’ in over 10 enterprises over the years.
For those contemplating following his example and
becoming an angel investor, Mr Fitchew warns that founders often have
unrealistic expectations of what their businesses are worth and what they will
become. Jonathan Fitchew also points out that one of the biggest mistakes an
angel investor can make is throwing money at too many things. After all,
successful business people typically invest all of their time and effort into a
single business that makes them a great deal of money.
When considering a pitch, angel investors need to
weigh up several key considerations, including the business plan and concept,
financials, the team, market understanding and opportunities, the competitive
landscape, and their exit strategy.
Investing in high-growth start-ups is a high-risk, potentially
high-return investment strategy that can be both exciting and rewarding.
Executed well, angel investment can be used to diversify investment portfolios,
creating scope for significant returns, which is a primary motivation for many
angel investors. Indeed, it is not uncommon for successful start-ups to deliver
in excess of 10 times the initial outlay of savvy investors. However, as with
all investment vehicles, there is also a degree of risk. Angel investment is a
high-risk investment strategy, as if the business fails to live up to
expectations this can culminate in significant losses.
