In the latest episode of Angel Insights, our regular podcast on angel investing, investment trends and all things startups, we spoke to Peter Cowley, a tech entrepreneur and angel investor who has, to date, invested in 76 startups, led 30 investment deals, and been a director on over 40 boards. He was President of the European Business Angels Network (EBAN), chair of the board of the Cambridge Business Angels, and the Investment Director of the Marshall of Cambridge, Martlet Corporate Angel division.

We highly recommend listening to the full conversation below:

But if you’re looking for some immediate insights, here are three key takeaways.

1. Invest in people before plans.

Peter: “It was the beginnings of what is so important nowadays, which I lost for a few years and then regained, which is investing in people. So this was investing in a super good technical person with a really good backup person in finance and ops. So actually, I was investing in the people. You don't invest in plans, plans with people is not the right way to do it. You invest in people with plans, because the plan won't be the thing that happens, there’s too many unknowns. So it's understanding how to invest in people. And of course, people invest in people, which is trust, and all kinds of other things, and it takes time to work out whether the people you’ve got standing in front of you, that you've got to know, are the right people to invest in. And of course, sometimes you get that wrong."

2. The importance of break-even timing can vary by market, but don’t ignore it.

Peter: "There's a big difference between investing in Europe and investing in the States. In the States, investors will go in on the basis of customers being found and in working out how to monetise. Whereas over here in Europe investors like to see that some sort of break-even is available at some point, because the problem is, if you haven’t got a break-even and investment money dries up, where can you go? You can shrink, or you can exit, but you try to exit when you're in a hurry! You don't have to worry about that if you've got to break-even, basically.

It hasn't got to break-even, and investment’s dried up: that’s been the case with almost all my failures."

3. A bond between founder and investor is crucial. But as a founder, be ‘coachable’, and adapt when you have to.

Peter: "If I'm deal leading, I will have worked this out as part of the due diligence process when I'm actually mentoring and helping the entrepreneurs. I wouldn't even invest if I felt they weren't coachable. And it’s not coachable as in listening to me, it's listening to all the other stuff and information going on. It's listening to the market, and the staff and the suppliers, the regulators and all the rest of it.

Many organisations pivot, but the only way to do that is not to be over arrogant; you’ve got to be focused and driven and everything, but you must also listen at the same time. If these people are not willing to listen, then I'm unlikely to invest. If they are willing to listen, I'm willing to help. For the ones that I'm closer to, I'm helping the whole time, I'm on at the moment, nine boards of various sorts. Of course, even the ones I'm not on the board of, I hope they know, they can reach out to me if they want some help. But another very important one I must just add is this business of building up trust and being truthful, and that's for both parties. Because in the end, I as a human being are investing in you as a human being to use my money wisely and grow the business and be central with it. So it's trust in the founders to justify the valuation you're buying in at.""

Read more about SyndicateRoom’s unique data-driven approach to investing in startups here, follow us on Twitter here and follow Peterhere.

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