In this blog post we’ll be exploring the world of angel investing through a conversation with Peter Lockett, Co-founder of Angel Investors Bristol.
Meet Peter
Peter’s passion for supporting the entrepreneurial space stemmed from his own. With a background in thermal products, he eventually co-founded TP3 Global, a designer and manufacturer of SilverSkin thermal packaging for the pharmaceutical and perishable logistics sector. Peter successfully exited this company in 2018 and has since put his time and resources into helping other entrepreneurs.
About AIB (Angel investors Bristol).
Originally investing via Bristol Private Equity Club (BPEC), Peter found a supportive community of like minded investors. When BPEC closed after investing in 40 companies, Peter, along with Ben Cooper and Jon Bonnick, formed Angel Investors Bristol to continue the club’s ethos and efforts. With over 120 members, the club is made up of exited entrepreneurs and high-income individuals looking to invest and support local businesses with S/EIS tax relief eligibility.
Who they invest in:
Angel Investors Bristol focuses on local businesses in the Southwest. They avoid investing in foreign companies and consumer brands because of market complexities. Peter emphasised that while they see many good businesses, they prioritise those with:
- Defensibility and scalability: Companies with strong intellectual property or deep industry knowledge are favoured due to their competitive edge.
- Strong founding team: AIB firmly believes in investing in the person/team rather than the pitch. The team’s ability to scale the business, their resilience, and their capacity to recognize their limitations and seek help are all attractive traits.
- The companies must be EIS/ SEIS eligible
- A compelling and believable pathway to exit: While emphasising that the focus should be on building a successful business, they encourage founders to consider potential exit routes for investors.
Top three things Angel Investors Bristol look for:
- Good value: Negotiating valuations to ensure a potential return on investment is key for angel investors.
- Defensibility: A unique business model or strong intellectual property helps companies stand out in a competitive market.
- Strong team: A resilient and driven founding team capable of executing the business plan is paramount.
How the process works:
For founders, it’s a competitive arena. Between 20-40 companies apply each month, taking the ‘Are you ready for angel investment’ assessment. Of those, only 8-12 make the grade for being able to apply, resulting in each being appraised for suitability. AIB looks to get one or two companies to pitch each month as the membership can’t absorb more. AIB usually raises between £100k-£200k for each company, with each angel selecting if they want to invest and how much. With the aim of being more accessible, angels can invest from only £1000 but the average investment is around £10k each. Investors are usually looking for an average return of investment of 10 times within 5-7 years. This allows for some investments failing, and some not providing any return if they plateau. Angel are looking for 3 or 4 companies to do well out of 10 invested.
Connecting with Angel Investors Bristol:
Angel Investors Bristol primarily connects with businesses through their website and their integration within the local startup ecosystem. They participate in various events organized by other groups and are open to connecting with founders at those events. Interested entrepreneurs and investors can visit their website to apply for funding and become a member. Membership gives you access to their closed pitch events for their community and wider ecosystem.
We’d like to extend a huge thank you to Peter for his insights into AIB and what Angel Investors look for when making an investment.
