Investor Circle

Why Southwest Tech Startups Need More Angels

• Stewart Noakes • Season 2 • Episode 4

Share episode

Send us a text

Ben Cooper, co-founder of Angel Investors Bristol and director of Tech Southwest, shares insights on building the largest angel investment network in Southwest England and redirecting capital to support regional tech innovation.

• Angel Investors Bristol formed in 2023, now has 150 members and has completed 10 investments
• The group receives 30-40 investment applications monthly but can only fund about two companies
• Current market conditions have shifted investments toward later-stage companies with existing revenue
• Average investments range from £50,000 to £200,000 at valuations of around £3-4 million
• 85% of angel investment from Southwest investors currently goes to companies outside the region
• Key investment criteria include market opportunity and strength of founding team
• New angel networks are launching across the Southwest including North Devon, Cornwall, and Cheltenham
• Founders need commercial capabilities alongside technical skills to be successful
• Self-awareness about personal limitations and team gaps is critical for startup success

To apply for funding, visit www.angelinvestorsbristol.co.uk and follow the application process through the founders page.


#TRIBE
Community Membership at Canopy

Scribe
Find and connect with angel investors in the UK Founded by Rob Cossins

Virtual Incubation at Canopy
Virtual Incubation for new and emerging Founders. Zero to One.

Revolut
Business banking from Revolut

Disclaimer: This post contains affiliate links. If you make a purchase, I may receive a commission at no extra cost to you.


Note: you can also watch these episodes on youtube.com/@canopycommunity617

Stewart Noakes:

fantastic. Well, lovely to have you here, ben. Thank you so much for sparing some time today and for those people that have never met you. Angel investor bristol or tech southwest, who is ben I'm ben cooper.

Ben Cooper:

Um yeah, I'm co-founder of angel investors bristol. We're probably the largest uh angel group in the southwest. We We've got about 150 members. We've been running since about 2020, or the end of 2023. And also I'm a director of Tech Southwest, the cross-regional tech cluster for the Southwest. We look to promote and support early-stage tech companies in the region. My principally focus is on the sort of funding and finance aspect of that, so that's investor readiness but also links into investors both within the Southwest but also increasingly London based investors.

Stewart Noakes:

OK, and what's your background, ben? What brought you to all of this? And and trying to replenish the southwest with tech startups all over the place?

Ben Cooper:

yeah, so I spent um about 25 years in um financial services um, everything from starting my own unit trust company to working for Axa Wealth.

Ben Cooper:

My sort of last real job, I suppose, was a management buyout of a stockbroking company in Bristol called Rowan Dartington and I was brought in there initially as a compliance and operational risk person, I suppose, to try and help turn the company around, and then ultimately, five years later, we sold the company to St James's Place to be their discretionary fund management function. That was 2016. Spent a couple of years integrating that into St James' Place and so left there in 2018 and then I was kind of okay, what am I going to do now? I was invited to join an angel group in Bristol called Bristol Private Equity Club by one of our board advisors and that's what got me into a sort of early stage angel investment. But also I started to do a bit of work with the University of West of England on commercialization of IP and from there my interest grew in sort of early stage startup, particularly tech businesses, got more and more involved in the sort of Bristol and Bath sector and then just it just kind of grew from there really.

Stewart Noakes:

So why are you so passionate about the southwest, ben? Why not just take this to London or Manchester or Birmingham or somewhere? What is it about you and the South West?

Ben Cooper:

My particular attempt wasn't particularly intending to come back to Bristol, but it's just where my first job came up, just south of Bristol, in Nelsie, and not necessarily known as a hotbed of financial services, but we were dealing in derivatives and warrants and things like that for clients. So, yeah, it was an interesting first and that was kind of my. That's what got me into, I suppose, investment in the financial services sector. But I love the Southwest. I spent a lot of time holidaying and spending a lot of time in the Southwest. We have great affection for, uh, you know, the region, um, but yeah, so I think it was about building something, about where I lived, uh, about building something, uh recognizing the fact that, um, I wanted to live in the southwest really, rather than wanting to live in london, and so, um, you know, I wanted to build something here amazing, amazing.

Stewart Noakes:

So you guys have been going a couple of years as this angel in the network because I think BPX now, uh, disappeared completely, right, so you are the best game in town when it comes to Bristol and Angel investment well so now? So Bristol Private Equity Club? No, it still exists.

Ben Cooper:

So what happened was Bristol Private Equity Club had done an amazing job.

Ben Cooper:

They well at the time, so they must be running now for seven, eight plus years.

Ben Cooper:

They made sort of 35 to 40 investments, invested about 12 million over that period, and I was a member of that group along with the co-founders of Ancient Investors Bristol. But I think they got to a point where they had made a huge amount of investments, hadn't experienced a great number of exits at that point, and decided that they wanted to focus on that portfolio, I suppose, and wanted to support those companies with follow on rather than, rather than, I suppose, using that dry powder on new things. They wanted to use their liquidity and financial resources, I suppose, to support the support the companies that they currently invested in. So that meant that they closed their doors to new business and so myself, john Bonnick and Pete Lockett all members of Bristol Private Equity Club we span out of there basically and with their blessing, and created Angel Investors Bristol. About 40 of the members also of BPAC who wanted to continue to invest in early stage or new businesses came and joined us. We've grown the network since then, really.

Stewart Noakes:

And what's the stats been? How many investments so far?

Ben Cooper:

Yeah, so, like I said, we started at the end of 2023, made our first investments last year. We made three investments last year and we've made another seven already in 2025. So we're up to 10. We've announced nine of them. We're just talking to the co-investors and the founder of the 10th before we uh, before we announced that one um, and we've got another three in our pipeline which we expect to close probably by the end of july.

Ben Cooper:

So, um, it's been a fairly busy first half um for us.

Ben Cooper:

Um, so, yeah, I mean, it's um, you know, we, we you know, so we kind of semi-close for july and august, um, the summer months, um, and then we're back in sort of september when we'll have our next uh, our next pitch event.

Ben Cooper:

So we, so we, generally the way we operate is that we have monthly pitch sessions, physical face-to-face pitch sessions, where normally two companies would pitch to our group. So it's probably about 10 in a year, if we miss out a couple of summer months, yeah, and so we get 30 to 40 applications for investment every month. So I think this is an indicator of the demand for investment in the Southwest, but that means that ultimately, we have to filter that down to what we feel are the opportunities which our members will be most interested in, that's not to say the others aren't great investments or great potential investments. I think we've just got to. You know, we're constantly trying to learn what our members would like to see, what our members want to invest in, and therefore we try and find the best opportunities that fit that criteria, I guess.

Stewart Noakes:

And Ben, what's the sort of average ticket size and average kind of equity percentage that are going with these deals? You know, don't give away too much of the game but you know what broadly are the parameters that the group works to so I say um, out of those 10 deals that we've done, we've probably invested about a million and a half um.

Ben Cooper:

So that gives you an indication of you know what our average ticket size is. But that can vary everything from as low as sort of 50,000 in total to 200,000. It's probably less than I expected as a ticket size when we launched the group. I think it's probably indicative of the nature of the investment market at the moment, certainly in private equity. I think we've. You know you don't have to look far to find indicators that it's difficult for founders to raise money at the moment, certainly from early stage. Um, I think our own report, tech southwest report, uh, from q1 showed investment in the southwest was down sort of 40 percent year on year. And so you know, I think our, you know, whilst we're active and there's lots of deals going on, I think the ticket sizes on the on the whole are lower than the normal okay, and what sort of percentage equity is it for that?

Ben Cooper:

Well, I suppose, off the top of my head, I suppose, if we're looking at value, so actually. So before I answer that question, I'll probably give you an indication of what's going on in the market, I suppose. In the market, I suppose. So we are seeing a lot more investments which we wouldn't normally see as an angel group. When I started the group, what I expected to see was, or be investing in, is a lot of early stage first raise SEIS type investments. But what we've found is that we're getting a lot more involved in a lot more.

Stewart Noakes:

Thank you very much. More sort of like second round kind of investments. But what's the percentage equity that involved Fall Park? Don't get me to be specific about the deals.

Ben Cooper:

It's a good question. I'll probably just put it in a little bit of context, because I think, yeah, some of the deals that we're seeing are sort of later stage rather than early stage. So you know, you'd expect, if you, you know, so, if a company is raising sort of 250 as an early stage, first round company, you'd expect it to be giving up sort of 15% or so of the business, a valuation of sort of one and a half, two million. The valuations that we're investing at probably now are more around sort of three to four million because they tend to have revenue. I think that's probably a key. They've got some traction. No, it's probably nowhere near profitability, but they have, but they have some. But they have some revenue. And some of them some of them have got substantial revenues at the time we invested, some of them have got substantial revenues at the time we invested. Distill, for example, we invested in last year At the time of investment probably we had they were sort of 600,000 annual recurring revenue, you know, driving that to sort of a million. And so yeah, I mean and I guess that was the point I was making it's the type of deals we're seeing at the moment.

Ben Cooper:

I think you know what's happening is we're. You know companies are coming further down the chain looking to fill rounds that would normally be filled with VCs. So, like I said, a couple of deals that we did last year were kind of filling small gaps in larger rounds. So I think in every investment that we've made so far, we've co-invested with a VC and that's not what I expected to.

Ben Cooper:

You know, when I went into this, that's not what I expected to see. I expected it to be this more traditional early stage SCIS, first raise. You know, some angels, groups of angels getting together and filling the rank, but which, you know, it's great. It's great for us because we're getting to see some really interesting companies that have really got traction, valuations that um are relatively attractive, uh, for what they're, for the revenue they're generating. What it is bad for is early stage companies who are looking for that first raise. Because we haven't done, you know, I'd say that predominantly, most of our investments are eis now and I was expecting most of them to be scis. So we've done a few scis, but predominantly and I think that's just again it's just the nature of the market at the moment and where companies are having to, as I move a bit further down the chain to try and complete those rounds. I'm not sure if that answers your question.

Stewart Noakes:

No, no, no, that's great. Thanks very much.

Ben Cooper:

But it's, you know, those are the types of valuations, you know.

Stewart Noakes:

so if we're talking sort of 200,000, a 4 million valuation, Okay, and what's the sort of number one criteria for you when you're picking an investment? You know what's the deal-breaking moment for you. Is it about team? Is it about traction?

Ben Cooper:

You know what is the magic factor? So I think there's two aspects actually. So, as early stage investors, um, we don't often have a lot to go on, um, and so, you know, the things that are really attractive to us are big opportunity, a big, you know a situation where there's a there's either an established market which has a problem or is open to disruption, or there's a new opportunity and it's hugely scalable. And then the other key aspect is does the team have the ability, or, do we feel, the team time analyzing the proposition? Um, what's the what, what the proposition is?

Ben Cooper:

But half the time, through experience, we know in 18 months time they might well be doing something completely different. Their initial expectations around product market fit weren't correct and they needed to, they need to pivot. So what we're looking for is opportunity and a team that can deliver that opportunity. It's not necessarily in the format that they think at the moment that's going to be, but it's, you know. So it is increasingly about the strength of the founders and the founding team, but also and again particularly with early stage companies, it's about the people they've got around them, um, those advisory boards, those people they've got around them, those advisory boards, those people they've got helping them, that network, that knowledge and the commercial aspect of the commercial knowledge. So the number of times we come, you know we see companies who are technical but don't have that commercial edge and we need you know we need to see that commercial edge.

Stewart Noakes:

It's super interesting, ben. Thank you so much. So I've got two questions to round you out today. Firstly, what is your superpower and secondly, what is your best advice for an early stage founder looking to raise money right now?

Ben Cooper:

Wow, what's my superpower? I think my superpower is um convening and I think you know my. My superpower is the ability to get angels together and investing in early in and banging the drum for the southwest. I think it's the, you know, it's my ability to convene people in the southwest, but also increasingly outside the region, to try and shine a light on what's going on, because there's fantastic amounts of technology and fantastic amounts of development and innovation that's going on in the southwest and I think we probably do get a bit of a bad rub um, compared to other regions. Um and I said, you know, certainly from london, but with the other as well we don't get a lot of attention from central government. We don't get a lot of attention. There's a great deal of attention sort of Midlands and upwards. There's not a lot in sort of south and across and down. And so what we're trying to do, with my Tech Southwest hat on, is what we're trying to do is shine a light on the fantastic technology, clean tech, defense, energy security, food security they're all real big strengths of the Southwest and, like I said, there's a lot of great stuff going on. The superpower that we have, I have have as tech southwest we have as angel investors bristol, I think, his ability to to showcase that um and and reach out to the rest of the uk and say, look, you know, this is great, this is what's happening. You don't just have to invest in london, you know, there are amazing opportunities down here in the southwest as well.

Ben Cooper:

Um, to your second question what's the? You know what what's a founder got to do? I suppose to get investment. I think it is. You've got to think about your team, the strengths and the gaps you've got in your team, and how you're going to fill those gaps. Think very carefully about your journey of attracting talent, your journey of filling those gaps and recognizing your weaknesses. Okay, so what?

Ben Cooper:

The most refreshing thing I can come across is when you come across a, a founder or founders in a company. In the first, you know when you're talking to them, they say, look, I realize I'm not going to be the ceo of this company in a few years time. It's, that's not my strength. My strength is the technology. My strength is this that the marketing or the branding you know, I know we're going to need to bring someone in to replace me.

Ben Cooper:

Um, going forward, and that is the most refreshing thing that you can see where people recognize their skills. They recognize the limitation of those skills. Um, and that's what I say, they can't, they're not going to grow as people and they're not going to to develop skills and wisdom and knowledge along the way. And they may well transform into those people, but they do recognize the fact that they need the person they need to run the company in a few years time is going to be different to the one they need now and you know that that that's always always a refreshing thing to see.

Ben Cooper:

So I think I think for founders, you know, particularly spin outs things like that is recognize if you have recognize this thing's got to be sold. You know there's got to be a commercial aspect to this and you might have the best tech in the world but if you don't sell it, you can't, you won't succeed. So recognize the fact that you're going to need a commercial co-founder or you're going to need commercial support. You're going to need a real, you know great salespeople. And also recognize recognizing the sales people are probably going to be the best paid people in your company and that's and that's.

Stewart Noakes:

That's not a bad thing these sound all like very american traits you're talking about here, ben, this kind of self-awareness of a stage that you're good for, on stage that you're bad for, and that sales people are the best paid people in the company and stuff. You know, do you have american training? Is that where this has all come from?

Ben Cooper:

no, not, not at all. I think it's just been developed through um. So you know, so we were kind of pe backed and that for our purchase of um rowan dartington, and you know so I think there was a real aspect obviously. So there's a big commercial aspect on that about how we can grow the value of the business, how we can grow the business itself. And you know, that's that, that's kind of drilled into me, I think um, no, I think it's just, you know, since I did a, you know I did a business degree and it's always been my you know the great thing about the, the degree I did a long time ago, I have to say.

Ben Cooper:

I have to say there's a lot of the lecturers etc were had were consultants. They had other consultancy firms and they were doing real, you know real work I suppose they they had jobs and you know their, their lecturing and their um positions at the university were aside to having businesses of their own and um and I think that so that kind of commerciality was kind of drilled into me at that point as well. But it's always been my thought that you know you've got to sell. You know if you can't, you can't sell, then you know it doesn't matter. If you've got the best proposition in the world, you know you're going to get beaten by someone who's not as good as you but sells better than you thank you for that, ben.

Stewart Noakes:

It feels like we should finish off with some shameless plugs, so why don't we start with what was the business school that you went to? And also, if people want to apply for funding with angel investment business, uh, angel, uh, investment, bristol, uh, where should they go?

Ben Cooper:

yeah, so I went to uh, I actually went to what was at the time southampton institute of higher education so which is now Solent University. So I did very badly in my A-levels, uh, went through clearing um, and I think it was probably the best thing that could happen to me, um, because exactly that, the, the, the, the place I went to get my unit, to get my degree was was full of people who were professionals, um, lecturers were professionals, and that, I think, was a huge, huge, I think was a huge, huge benefit. I don't, you know, in a way, I don't regret what. I don't regret not working on my A-levels now, although that's not what I tell my children, but it's, you know, it's, you know it works out well for me and so, yeah, that's what started me off.

Stewart Noakes:

And I went from there.

Ben Cooper:

Really it's kind of early stage traits that I suppose I developed with marketing professionals, with strategy professionals, with all these people that were working with real companies doing real things. I had an inkling a lot of the work we were doing was actually for them half the time, and so that's what things that they might have been working on.

Stewart Noakes:

That's how it?

Ben Cooper:

works and an absolute fair play to them. Yeah, absolutely, I would have done the same. Yeah, and for your second question, around angel investors, bristol. So I get approached a lot from you know, obviously, understandably, being, I suppose, one of the faces of early stage investment in the Southwest, I get approached a lot, but the best way to get into our pipeline is to go to our website and it's wwwengineinvestorsbristolcouk. There's a founders page, there's a button to press, you look into investment and you go through a process. And that's the best way because as much as I want to speak to every founder and I want to talk about every company and I just don't have the time and I wouldn't give them the attention that they need track all the companies that are looking for funding um and appraise them all in the way that we need to do that to unfortunately drill it down to kind of two, which which again is a frustration of mine because, um, we don't have the liquidity in this in the southwest that I would like um.

Ben Cooper:

So we're doing a lot of work around engine investment development. We've just launching a group in north devon or we've launched group north devon angels. We're looking to do, we're looking to launch groups in uh, torbay and plymouth. We're looking to launch groups in taunton, um. New groups are sprouting up cornwall angel network, um. There's a new group in gloucester, um investing in cyber, or sorry, cheltenham investing in cyber. So you know there's.

Ben Cooper:

You know we're doing a lot of work to promote angel investment in the southwest, um, but um, you know there's still not enough. So, like I said, you know it's a frustration for me that we have to reduce 30 to 40 down to two uh every month and um, you know, I want to be able to do more and I want the region to be to be more self-sustaining, um from an investment point of view. And so it's finding angels, people who could be angels, people who would like to be angels, and finding those angels and almost coordinating um, because one of the one of the disappointing stats is the angel investment that's done in the southwest. About 85 of that funding actually leaves the region. It's it's to companies that are outside the southwest. So we need to redirect, we need to redirect some of that money.

Ben Cooper:

Um, you know, don't need to turn the dial too far to make a significant difference in the investment that's uh, that's happening in the in the southwest. So you know that this is all the sort of activity that you know, various acts and various activities. I do is pretty much around turning that dial to redirect that investment into sideways, but also to identify people who just don't know about angel investing and you know probably could benefit from the tax Tax planning that can be. You know, through SEIS and EIS and other tax benefits. Highly paid professionals will benefit from it, those sorts of things. They probably just didn't know about it and so there's an opportunity to invest in your local area, invest in your local economy. So, yeah, that's ultimately what I'm trying to do through Ancient Investors Bristol, what I'm trying to do through Tech Southwest, that's what I'm pretty much focused on fantastic listening to this and they've got coming up this year.

Stewart Noakes:

That now's the time to go and talk to ben and sort that out and, uh, put a little bit through an seis or an eis race, okay, but thank you, ben. It's been a technically glitchy day today. Really appreciate it yeah it.

Ben Cooper:

Yeah, sorry about that.

Stewart Noakes:

Yeah, I think yeah, Bringing your message across right. You know, the whole goal of these podcasts is empathy and being able to show how an investor role and a founder role kind of fit together. I really appreciate that you've given the community today with sharing your story. Thank you so much.

Ben Cooper:

No, thank you Stuart, I really do appreciate.

People on this episode

Head Shot

Stewart Noakes

Host
Head Shot

Ben Cooper

Guest