A Great Deal Starts With A Truthful Story

We talk with Matt O’Donovan about what it really takes to sell a tech business, then switch viewpoints to what he looks for when investing as a UK angel. We dig into due diligence, founder integrity, SEIS and EIS, and the big open question of exits as AI reshapes software. 

• Matt’s path from telecoms to building Spark Wi-Fi and exiting during Covid 
• What surprised him most in financial due diligence and how to defend your numbers 
• Why hype and “hockey stick” forecasts damage trust with acquirers 
• How angel investors assess founders first, then market, product and competition 
• Investing at pre-revenue versus waiting for traction and why AI changes the risk 
• When SEIS and EIS matter and why they are not the core strategy 
• Why meeting founders in person still matters even with remote work 
• How efficient, automated businesses become more attractive acquisition targets 
• The human unpredictability inside deals and why there is no one formula 
• Best advice to first-time founders: answer the investor’s why with honesty and purpose 

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Transcript

Welcome And Matt’s Tech Journey

Stewart Noakes 0:01

All right, fantastic. Episode two is here already. I'm absolutely so blessed to be here with Matt O'Donovan. Matt, who are you and what do you do?

Matt ODonovan 0:10

Morning, Stu. Well, thanks for inviting me along. So I'm Matt. My background is I'm a long-term techie, and my career, I won't bore you with all the details, but it started off in electronics and telecoms. I'm old enough to remember mechanical telephone exchanges and to be taught that at uh technical college. Um, however, there's not much call for that now. Uh recently um I've uh I started a business actually in 2003, uh, took that business through um from literally starting my garage uh with a server providing uh Wi-Fi authentication, um, took it through to becoming one of the largest Wi-Fi uh software management providers in uh in the UK. Uh we had customers as big as Starbucks across Europe. Um most of the NHS would use uh Spark Wi-Fi uh as it was. And uh I took the business all the way through to exit in 2020, right in the middle of COVID, which was um they say an interesting time, uh, very good result, and uh a really good buyer, uh, which is an organization called Valaris, part of Constellation Software. Uh I then had five years working with those folks and learned so much about businesses. Um, Valaris is a serial acquirer of businesses. So in the latter part of my uh my term with Valaris, I got to work in MA, got to see many, many companies in the tech sector. Um, and uh there's an expression which you will have heard before uh you have to kiss a lot of frogs to find your prints. Uh you would think that MA was really easy. Uh you just go out with lots of money and buy a business, um, but you got to buy a good business. And not only did I have the experience of running my own business and taking it to an exit, um, I I was privileged enough to see so many other founders with an awesome idea uh that they'd grown into a business that was potentially ready to uh to buy. So that's a little bit about me and what I've been up to uh over the last few years, but very tech focused. Uh love entrepreneurism, ideas, strategy for business. Um, and uh in February this year, uh my wife is not around at the moment, but uh uh I promised my wife I would retire. Um so I've since uh invested in a couple of other businesses, started another company, uh, and just can't stop. So, serial entrepreneur, I think, is is one way of describing me.

Stewart Noakes 2:44

And we first met through Alistair Bank. So, Al, if you're watching this, thank you so much for the introduction. It's been great to meet that and uh and continue

Selling Spark And Switching Sides

Stewart Noakes 2:50

these conversations. So you're a poacher term gamekeeper, is that is that what we would call you at this point?

Matt ODonovan 2:56

I think uh I think yes. Uh certainly through the MA uh side of things, it's incredibly interesting when you sell a business. Um, you don't realize, well, I think some people do, but a lot of people don't realize the amount of effort that goes into um preparing a business for sale, the due diligence. But having gone through the process as a vendor, um, to then sit on the other side of the fence as a buyer, and that MA experience I had was absolutely brilliant. Um, but as I said earlier on, um I I'm not gonna stop. I'm a little um little young to retire yet. Um, and so I'm now in a fortunate position where I can uh look at other businesses, uh, consider whether I can help because that has to be a big factor, and potentially whether I invest. So uh if that's the uh poach-return game keeper simile, then I think yes, that that is me. Uh I'm working with a few businesses at the moment. Um, and um, and yeah, it's it's a really interesting time.

Stewart Noakes 3:57

Well, and thank you for your help on the Uni Days program as well. I know you helped Amelia and a couple of the others that were more hardware focused, and that was very kind of you. Thank you very much. Pleasure. And so so let's I really like the um being a vendor and then being an acquirer type stuff. So I wonder if you could uh sort of chip into that for a second. What's your biggest reflection as a vendor that maybe you did wrong uh or you could have done better on your on your first sale from your Wi-Fi company?

Matt ODonovan 4:24

Wow, could have done better. Um I seem to recall that was written on my school report many years ago as well. Um you know, when you sell a business, the the the fear is on the due diligence side. Um at Spark, we were pretty well organized. I had some excellent staff that I worked with who helped me prepare the uh the sale of the business. I think you've never done one of these before, right? When you when you sold okay. No, we'd uh we'd acquired a couple of companies, but um they were relatively small beer. Um and um and in doing so, yeah, you you learn a little bit about their business. But when uh a larger, more sort of serial acquirer comes along, they're quite formulaic as to how they work and their expectations. Um what I hadn't anticipated was the depth of questions on the financial side that um that these acquirers go through. So they're obviously acquiring a business, they want to know it's um it's got a good product, the market is there, the people are right, but also is it gonna be financially viable? And I think when you you look at buying a business long term, um it doesn't matter if the business isn't perfect. Um it's a bit like when you buy a property, as long as the roof is sound and the foundations are solid, you you're probably gonna be all right because there's expertise that that organization will bring in to your company. I think the the thing that I hadn't expected was the level of um level of detail on the finance side that some companies go to. Um and when you run your own business, that the finance tends to be a yeah, yeah, it'll be okay. It's fine. I I know I've got a VAT return. That's all fine. We've got money in the bank for that. I know I've got a business plan. I'm largely on target with that. Um, but there's more accuracy required, I think, um, when it comes to having conversations around a sale. So you've really got to be able to defend your numbers, um, justify the claims you're making. I've seen so many businesses and maybe do a little bit of this at Spark, where when somebody comes along to kick the tires, uh the vendor will say, Yeah, you know, we're we're we're starting the hockey stick curve now. It's all just about to take off. Um, which reminds me of the, you know, this time next year, Rodney will be millionaires from Fools and Horses. Um, those hockey stick curves rarely materialize. So I think you've got to be realistic um and completely open um when when you're selling your business. Um and yes, there was a little bit of hype that I might have put into it, um, but the acquirers will see through that very quickly. Um, and unless you can justify it, just don't hype it up. You know, just be who you are, explain what you've done, where the business is going. Um if somebody is sniffing around looking to buy you, they probably know the market. Um, they probably know quite a lot about your business already. Um, and yeah, that's that's something I hadn't really factored in. You know, I was the expert of Spark, so nobody else would know anything about it. Yet these guys came in and started explaining to me what my total available market was, um, the opportunities in the sectors that I was in. Yeah, it was really interesting. And you know, it's great fun when you bounce the ideas off somebody who's kind of on the other side, um, because they'll challenge you and they'll they'll put you in in the hot seat and um and ask you to deliver. Um, and when you're the CEO running your own business and you are the boss, all of a sudden you've got somebody questioning you, um, asking you, um, and yeah, you you have to measure up to it. So it a real eye-opening experience for sure. Absolutely.

Stewart Noakes 8:10

And I think it's really interesting. Um, you know, when you look at acquiring from the outside, you almost think of it as a static process, as in the business has stopped still while you sell it. But the reality is, unfortunately, you're you're still on the moving train, right? And it's doing stuff ups and down. Not a train's probably a bad, but it's a moving plane, right? Because it's going up and down all over the place, and you're busy trying to tell the story of the business, and then something happens really great, like you make a new customer or something in the middle of the process, and you can talk the up, or something happens really bad, like you lose a customer or you have a bad uh credit moment or something, and you're still trying to tell that story and still trying to do that sale and still trying to make it believable while still operating the business, while still thinking through well, if this one doesn't go through, what am I going to do with the other three that I'm talking to at the same time? And it's it's not static at all, is it?

Matt ODonovan 8:57

Not at all, not at all. I I do remember um the guy that I was working closely with, uh, it's a guy called Rob, um, fantastic guy, um, very experienced and very smart. And I remember in the due diligence process explaining to him that um we were just about to get a 700k order from one of the network uh rail operators. Um, and Rob was hugely impressed with that. Um and the next conversation that I had a few weeks later was so how are you doing with that order then? Um so five years later, the order still hadn't come in, uh Rob would occasionally tease me about this. Um so yeah, be it's kind of a be careful what you wish for. Um and um you know if if there is a 700k order, then by all means put it forward. But if it's just a slim chance, don't brag about it if it isn't gonna come in.

Stewart Noakes 9:50

Yeah, it's what it's about integrity, right? And it's about that believability factor that if you start over inflating things that don't happen, it just uh deflects the whole thing.

Matt ODonovan 10:00

Yeah.

Stewart Noakes 10:00

All right, so that's really interesting.

Angel Investing Starts With Founders

Stewart Noakes 10:02

I've got 18 different things I'd like to ask you about that, but I'm gonna I'm gonna move on to your investments actually and have a have a think about you know, how do you make your decisions as an angel? Now you're an experienced operator. Are you actually quite a pain in the ass to do business with as an investor because you've done all these different things, or is it a blessing to have you arrive to uh to be part of it? So, what's the first way you look at a company? What grabs your attention and how do you make these decisions?

Matt ODonovan 10:28

Um the first thing that grabs my attention is the founder. Um it has to be the right character. Um, and if you're going to be successful in business, you've got to have that running through your veins, uh, you know, that commitment, that enthusiasm, that drive to make it successful. And when I see that, that's that's the first indicator that yes, um this could be worth looking at in in more detail. Then of course, you know, you can go through and you can look at the uh the Tam SamSom analysis, you can look at the competitors, the product. Um, I've seen a lot of product demos in my time, um, and they tend not to be the most interesting part of um. Are you kidding me? I love a product demo. Yeah, that well, it depends where you go. But when you've been in the software industry for a number of years and you've seen a hundred software package demos of a database with a user interface, it's like, hmm, okay. Um, but uh saying that, it it is all about the idea. Um, the idea is what fuels any business. With Spark, uh, my idea was that I wanted to have Wi-Fi access on my boat. And it just started with something as simple as that. Why can't we have Wi-Fi on boats? Seems really simple. So we we got to the point where we had most of the UK's marinas, um, one of the largest uh operators in Europe using the product, and and we achieved it. Um, and the reason it worked is there was an enthusiasm from me to do that, uh, a need from me, because I had a boat, um, it was fairly modest, but um, I wanted to be able to sit on my boat, tinker with the boat, and pretend I was working by sending emails. So it was a great idea, and then just obviously fell in love with the technology and and the business. And it's the same with the the companies that I'm investing in now. The founders have got to be looking at their idea, thinking this is great, this is this is going place. I want to do this. And it's almost, you know, that what's the best way of describing this? When you wake up in the morning, you just want to do your idea. Um, and founders who are passionate about wanting to build and grow and do this thing because it is a great idea, I think are more interesting than founders who think, oh, I could get into the software business, write an app, monetize it, sell it, make millions of pounds. Um, because you know, people do that in that industry. That's not the way to go. You know, if you've got a widget that's going to change the world, if you've got an idea that's going to make life better for people, then they're the interesting companies. And you know, I've got a couple on the books at the moment. There's there's one I'd uh I'd mention, um, and this is uh this is the chap I used to work with. Um many years ago, um, he started a small business um helping museums engage more with their visitors. And in museums, they're wonderful. You go in, you see incredible things, slices of history, but you're almost overwhelmed with information. And then when you come home and your partner says to you, How did you get on? You say, Oh, it's brilliant. It's all loads of things, like like what? Um, and then you struggle to remember. So he's built an app that allows you to take home that experience in your pocket on your iPhone, not just by photographing, but through you know, engagement, through software. Um, he can bring that museum to your device. So if you're a school school kid, you can take home information, PDFs, video, data, text, audio about the things that you've seen, and it becomes very real. So he's a lovely guy, he's passionate about what he does. Um, he just wants to make it work, and that's the sort of person that interests me, as opposed to the smart aleck who just thinks he can make millions of pounds by building a thing and exiting in five years' time. It's the people who've got ideas, you know, the ones with a passion that um that excite me really.

Stage, Traction And AI Market Risk

Stewart Noakes 14:30

And what stage do you prefer to invest in? Is this before revenues where you can really get stuck in the muck and bullets, or do you wait for them to get some traction before you you get involved with your money and how do you think?

Matt ODonovan 14:43

Um so the uh the museum um example is pre-revenue. Um there's another consulting business that is pre-revenue. Uh, there's another business uh that um I've recently invested in, which is doing really rather well with a lot of good customers and some excellent technology, it it's all about the idea. Um, saying that, there's uh another business that I'm looking at um where I'm kind of sitting on the fence a little bit because this chap has started a business entering a market which is dominated by AI, and it's so fluid that whilst he's got a great idea and he's passionate about it, it's just not clear whether customers are going to adopt it before some of the bigger operators come in and offer something similar. So, you know, I'm not blindly going in there saying, Oh, what a great idea, and I love that person, have some money. Um, we've got to be realistic about is this going to fly? Um, you might have a great idea. Um, you know, you might have come out with the idea for a search engine 25 years ago and you thought you were going to be the greatest, but there were two or three other companies like Google, Yahoo, and Lycos, or whoever was around at the time who were also doing it. Um, I possibly wouldn't have invested in you back then. So um AI is similar. Um, whilst AI can deliver applications and services almost instantly now, um, you know, if you can build it almost instantly, then possibly somebody else can or one of the bigger operators has. So that's where the strategic view comes in. Um, it's easy to get caught up in the enthusiasm of that's a great idea because you know you can build a bicycle frame that's 30% lighter. Um, but um, if there are six companies, big operators already doing it, um, then maybe it's not going to be for you. Okay.

SEIS, EIS And Real Exit Timelines

Stewart Noakes 16:39

So you're obviously angel investing in the UK. Do you take advantage of the SEIS uh tax regimen in the UK? Yes. Yeah.

Matt ODonovan 16:48

Uh a couple that uh I haven't uh and a couple that I have. Um but yeah, absolutely.

Stewart Noakes 16:55

And and like some angels have a deliberate strategy. They have an allocation they put to SEIS every year and they're kind of fixated on how do I, in effect, spend that the best. Is that how you approach it, or is it just a kind of like looking at the deal, some have and some haven't, and you don't really mind?

Matt ODonovan 17:10

It's um it's the latter. Um, it's not part of my investment strategy. Um, my investments are fairly well looked after as uh as they stand. Um, it's all about the idea, the person, and the the long-term probability of success. Um, and if it happens to be wrapped up in EIS um and it's been you know pre-approved or what have you, great. That that's really good. Um it's it's certainly advantageous for people in my position to use that. Um so if it's there, um great. But if it's not, it's not a showstopper.

Stewart Noakes 17:46

Now you've obviously had your own exits and been involved in acquiring other people's companies, but so far in this investment world that you've you've stepped into as part of your retirement, which I'm sure you have great discussions with your partner about from time to time. Um have you had any exits from from those yet? Or do you see any on the horizon?

Matt ODonovan 18:05

Uh not yet. Um the there's one that I've um literally completed this week um that I think is going to go really rather well. They're growing at a good rate, the technology is good. Um, there is a real need in the marketplace, small business, um, but it has uh a number of investors and some fairly interesting characters involved with it. Uh the founders that are running it are brilliant. I really like them. Um, they're good people to work with. Um, I think that's possibly going to be my first um that uh that's gonna be quite successful.

Stewart Noakes 18:42

Okay, good luck with that. Share every success. Now, um a sort of slightly off-piece

Working From The Southwest And Meeting People

Stewart Noakes 18:47

question. You've done so much of this from the southwest, from being extra-based and stuff. How has that been for you? You know, has has it involved a lot of travel? Have you been able to stay sort of fairly static in the southwest? You know, what is it possible to do this stuff for people who are watching this?

Matt ODonovan 19:04

Absolutely, yeah. Um, you can do an awful lot from your home office, which as you can see, you know, my office behind me um is uh there's plenty of space for me to walk around. Uh no. Generally, it's it's fine uh working from home, but what I would recommend is make sure you go see people. Do not do everything by video, by phone, and email. It just won't work. You know, you're not going to get a good sense of who you're dealing with unless you can sit opposite and see the whites with their eyes. Um humans are very social creatures. We pick up so many uh tells and indications about relationships face to face that you just can't do over a camera. Um, for me, I've done a fair amount of travel. I know that train line going into Paddington very well. Um, know most of the staff on those trains. It's uh it's a lovely journey for me. It's two and a half to three hours of relaxation, catching up on emails, etc. Um, but getting into London, um, London is a great hub to meet people, um, and I do take advantage of the capital um to have meetings. Um, but equally, there's nothing to stop you jumping in a car and going see people. But the key thing is go see people. You know, don't do it all from home. Um, so we're fairly well connected in the southwest. Um, the rail is great. Uh, we have motorway links, which we should avoid at this time of year when it's the six to eight weeks of summer holidays. But um, yeah, no boundaries or barriers at all, Stu. Um, lovely place to work in the Southwest. Uh, great lifestyle. Um, being five minutes from the beach is just awesome. And I can be in London in two and a half hours. It's you know, what's not to like?

Stewart Noakes 20:42

I always struggle with the Wi-Fi on that Paddington line. It drives me crazy to be honest. So I end up just uh downloading everything beforehand and working offline on the train. Have you ever cracked that recipe?

Matt ODonovan 20:52

Um, yes. So I bought myself a um a Netgear Nighthawk router, um, which uh with a photophone stem in it works fine. So I get flawless internet. I'd say about 95% of the way. There's a couple of tunnels depending on which route you go, um, but it works pretty well. Um, but it's getting better as the mobile networks move towards 5G. Um, I know how the Wi-Fi in trains works. Um, and uh yeah, you're you're trying to get an awful lot of people through two or three cellular connections. Um, but um yeah, it it also depends, I'm not getting a bit geeky here, but it depends on the rolling stock. So some of the older trains have got silvering on the windows, which prevents um or uh diminishes the Wi-Fi uh and cellular signal. Um so if you happen to be on a cross country train, you're not gonna get get as good a signal as you are in a Great Western, for example. But anyway, I I digress. I'll get No, no, it's it's your subject matter, right?

Stewart Noakes 21:52

And it's and it drives me crazy on that train every time. I feel like it I have I've learnt to embrace it as I think you have to when there's a when there's a problem. I've learned. Embrace it as the opportunity to focus on something else rather than the challenge of not being able to do what I want. I did say to you before we started that turnaround was fair play, so I don't know if there's any questions you want to ask

AI, Hardware And The Future Of Exits

Stewart Noakes 22:13

me. I'm more than happy to take a couple.

Matt ODonovan 22:15

Um I think I'd be interested in what you see the investment landscape for angels um looking like at the moment. Um and uh and also for the next few years. Uh we've got a we live in interesting times, we said before, um, but with what's going on in the Middle East with our uh new Andy Burnham um making all these amazing promises and doing some pretty good things, from what I can tell. What's your gut feel on angel investing for the future uh for the next couple of years?

Stewart Noakes 22:46

So I think uh the UK with this SEIS tax regimen and the EIS stuff that follows on, it provides one of the best opportunities for angel investing in the world because you get to hedge off so much risk uh in what you're doing. And I think it creates this revolving door of liquidity every year, which is very different to the way a typical GPLP structure works with funds and kind of putting money into that. And I think it actually makes being an angel investor in the UK something that's very attractive. And uh one of the things we're working on is how to bring other people from countries like Portugal and the US to the UK to take advantage of that. I think another advantage with the with the mechanism is that the gains from any exits are also moderated, so there's there's less tax on those coming out, which is very helpful. And I think for most angels, the challenge is how do I get an exit in my lifetime? You know, sort of a 10-year, I'm 53, I can't remember your age, I think we're similar in age. Um, but you know, when you're saying taking a 10-year view and you're saying, well, I'm gonna be 63 when I finish this, like with our fund and stuff, I'm like, wow, I've never even managed to make it to 63, let alone working out what my financial is going to be at 63. It's uh it's quite bizarre, but if it takes longer than that, it just feels difficult. When I was 30 doing this stuff, a 10-year mindset wasn't a problem, but now it just feels a little weirder. Um, and a lot of angels I think are in our age bracket, sort of 45 to 55 is a typical, particularly in the Southwest kind of angel age group that uh that I see. Um, and and I think the biggest challenge that we've all got to think about and find mechanisms for is what do exits look like five years from now, and particularly in software stuff. I think hardware is going to be actually very interesting because I think there's a lot of safer place is the wrong phrase, but more reliable place with hardware because you can't AI it in the same way that the software can be basically duplicated, copied, um, substituted, whatever you build now can be copied quicker than you built it in the first place, and any feature you make to make things sticky uh can also be duplicated. So, what are the ways that things retain value in a way that you can then sell them? How do they keep their cash flows generated? Um, and one of the models we've looked at in our fund is to think about okay, is this more like RD for pharmaceuticals now, where what we're doing is investing in an RD cycle of making something? And then to a certain extent, there's a limited lifetime of protection where you've got to make the money and there's no real exit sale. It's actually about how what the area under that curve looks like. Is that in effect the new exit? Or is there using something like an EOT in the UK, a way where you can build a company that you then sell into with the trust for the employees, and that's actually our financial exit as a fund, and thinking about something a bit more in our control as well. Um, and I think for every angel, that's that's the big question that I would be asking myself to say, okay, I get how I get in, I get what I'm interested in, and I get how I get to play with that because that's a big part of being an angel, right? It's like, how do I actually participate a little bit and add value to them and enjoy that journey? What really is the exit mechanism that I can expect from this now in the age of AI? And genuinely that one keeps me up at night is that I'm not entirely sure, and I don't think many people are. I I think the game's being played very similarly now to how it has been for the last 20 years, but I think in the next five years we're gonna see as the VC funds replenish and start new strategies and stuff, I think we're gonna see some very different exit mechanisms turning up.

Matt ODonovan 26:28

I think we are. Um it's a very interesting comment about AI and software. Um, and that's well recognized now. Um, one of the businesses that I was talking about earlier on, um, very low headcount, um, great use of AI for the software development piece, but they've identified hardware is a differentiator. But it's not just the hardware. Um, you need, I think, to have a successful company in tech, um, having hardware, having knowledge of the industry, um, so your own kind of secret source as to how to do things and whatever's supporting software is very important. Um, but building a business that is small, incredibly efficient, very well automated makes the buying of that business easier. So, in terms of MA, um, when I said you have to kiss a lot of frogs, um, we we've seen, or I've seen in the past in businesses that whilst the idea on the surface looks good, the revenue looks good, you lift the lid up and you look at the business. And the complexities, the staff, the structure, the hierarchy is just something that is going to be tough when that business is acquired. You know, you may look at that and say, well, we can make this successful, but we're gonna have to get rid of this, bring in that, you know, it depends on how much work you've got to do. If you don't have to do a lot of work when you're acquiring a business, then as a strategic acquirer, um, if you have a supplier that is providing you a service, uh, and that service is hardware, software, and professional services, and it's very easy to integrate, that makes that company more attractive. So be be wary of what you're investing in in terms of if it's quite complicated, um, if there's a lot of people involved in it, um, there's very little automation, um, it's not going to be as good as if you've got a very uh sort of small, perfectly formed, well-automated business.

Stewart Noakes 28:27

I'm probably going off down a bit of a rabbit run here, but um No, no, and it sparks a really interesting sorry, bad pun, but uh it sparks a really interesting point, and maybe it's something we can we can loop into for a sec, which is people sell for all sorts of reasons, right? Yeah, it's not just oh, it's a great time to sell and I oh sometimes it's a great time to sell and I really want to exit. Sometimes they sell because it's in distress, sometimes they sell because they've topped out, and as a founder, they can't find anybody to take over from them or they can't build the management team. Sometimes it's literally like they're at their wit's end with the business and they just don't want it anymore, and they just need to get rid of it, and the best thing they can think of to do is to sell. And sometimes it's a logical moment that the business will go on and be more successful if they do sell. But it's amazing how many different reasons people are in the room, right? When you're when you're actually doing those deals. What can you able to share within the bounds of confidentiality?

The Weirdest Deal And Human Factors

Stewart Noakes 29:19

What's the weirdest deal you've ever been involved with?

Matt ODonovan 29:23

The weirdest deal.

Stewart Noakes 29:24

Yeah. Or I could I could be more palatable and say more most nuanced deal with the invitation.

Matt ODonovan 29:32

Um I can't mention any names, but there is one business that uh that does spring to mind. And um the CEO was just he was like a mad scientist, you know, a crazy inventor. Um, and this was a business that uh was brought into the portfolio. Um, and the business itself was mainly him. He was such a character, um, so driven um and so hard to say no to. Uh, taking that individual into a new environment where there are certain ways of doing things, certain expectations, um, you know, it's it's like you've you've got a scalded cat that you just can't get a handle on, you know, he's not going to conform. Um, and um and seeing where that went um within Valaris was was very interesting. Um Valaris was great with this because they took the business and they um they they really took it by the scruff and the neck, but they embraced this um this individual and put him in a position where his mad scientist, crazy inventor skills could be very useful. Um, and he's now flourishing. Um, but it could have gone so badly wrong. You know, you when you buy a business, you expect, okay, there are certain parameters, it's going to do this, it could do that. There might be five different models that you uh you you create when you're looking at buying a business, you know, from the absolutely fantastic to the it's crashed and burned. Um, but you can't really budget for what the people are going to be like after the event. Um, but it was just great to see this guy um go from an environment where he had total freedom and control, could do everything he wanted, um, to suddenly thinking, I've got shackles on me. It's not going to work to being placed in an area where he didn't have those same shackles, and it it would work for him. So I think that the moral of the story is that everything is different. All right, there is no formula for you buy a business, it does this, it grows, the CEO does this, the founder does that, the managing director does the other. Every single thing is different. And that's what makes this interesting. You know, we're not just buying a commodity and putting it on a shelf and reselling it. You're buying into people, you're buying into ideas, innovation, um, all the various reasons that you mentioned. I've seen those and many others for people wanting to sell. Um, and they're all different. You know, they they might fall into a category of, well, they're a three to five million pound business, there are 10 to 50 million pounds, and there are different nuances for each size of the business. But the people behind them are the interesting bit. Um, that's the thing that you know piques my interest. It's yeah, of course, technology is great, ideas are brilliant, but unless you've got a person, you know, a real living human being who's passionate about this, um, then it just ain't interesting. And that's the bit, you know, that's the fun of being an angel investor because you've got that unknown, um, that feeling of, well, it could do really well, but also, you know, that lady is a little bit crazy, um, so might need a little bit of steering, uh, guidance, help. But I've done that before, I'd be able to do that. So, as you said, if you can feel you can make a contribution, um, then do it. Um, if you really can't, or if you're scared about the individuals you're going to be working with, then don't do it because it probably isn't going to work.

Stewart Noakes 33:04

I mean, my personal experience on this stuff is trying to, and my learning points, I guess personally, has been I can usually visualize what could be done, but I haven't always been good at understanding what that team could do. And there's a difference between those two things. So conceptually, you could do all this stuff, but this team isn't capable of that. But they are capable of this. And if instead of flogging them for the what you think could be done, actually look at what you could build successfully with those people. And one of the um the CEO of Extra College actually, he's very he's got a very good phrase that I've tried very hard to learn from in this, which he's he's great at saying, play the hand you've got rather than the hand you wanted, because you can lament all you want about what you wanted, but you haven't got it, you've got this to make the most of that. And and for me, in managing and directing companies, that's been one of my biggest learning points is how do I actually balance those things and say it can be done, but by this team, that's the best thing we're gonna achieve. And actually, that's really cool. It's not that when when they're playing down, we're actually doing the best with the past that we've got here. Yeah, I agree. Uh-learning curve, though I've got to say I've screwed that one up more than once.

Founder Advice: Lead With Your Why

Stewart Noakes 34:18

So uh I promised you a final question today, which is um around for first-time investors, sorry, first-time founders that are watching this and they're raising money for the first time. What is your best advice for them in approaching somebody like you, an angel investor in the UK? How should they do that?

Matt ODonovan 34:36

I think the question why is important. You know, every investor is thinking, should I invest? Why should I invest in this business? You need to have an answer to the why. You know, why are you doing what you're doing as a founder? So for me, why was I doing what I was doing? Because I knew that putting Wi-Fi into marinas was going to be really useful and very helpful. And putting Wi-Fi into hospitals where there's no mobile signal and no means of getting on the internet, that's a really good thing to do. So why am I doing it? I'm doing it because I love the technology and I think it's a really good thing to do for people. So you've got that why. If you can't answer that, or if you answer it with a because the ones make lots of money, yeah, okay, it's a reason. But for me, it wouldn't it wouldn't float my boat very much um compared to the person who says, I'm doing this because I can make a difference to people's lives, and I love the thought of it. Um, and there's an individual who uh through the the student engagement program that you introduced me to, kindly Stu, um, where um a lady had uh a wonderful idea for taking uh communication to the next level of efficacy uh with adults with learning disabilities or learning challenges. Um and communication is important to all of us, and she had an idea that was gonna make life better for people. That's the one, you know, as far as I'm concerned, that's what we should be doing. Because she was passionate about what she wants to do, she was going to solve a problem, it was going to have an impact, and the money is gonna be a byproduct of that. Now, if you can do that, and when you do your exit and you have millions of pounds in the bank and you're sitting there feeling quite smug, you really want to be thinking, I did that and I've made a difference. And I feel good about it. You know, I've got my money with a clear conscience that it's been worthwhile. So the why is the thing for me. Any investor um is gonna ask a founder why. Make sure you've got your answer to that question, why, right. And, you know, unless it comes from the heart, you're probably not gonna get your investment, or certainly not from me.

Stewart Noakes 37:05

That particular founder, uh, she's amazing as well. She was uh, and I've told her personally as well, she was my biggest smile moment in the final showcase of uh of uh Revolute uh the stuff at Revolute for Yumi Days. And all of the 10 that did the showcase were truly phenomenal, and I was just electric with with how much they put into it. But for me, she was up first, she gave her pitch, and Simon Squibb turned to her. And like I was flawed in the first 30 seconds, she was just so good, she was everything she tried to be for that moment. She was authentic, she was human, she was herself with her story. And he turned to her and just went, I absolutely love you. And it was so genuine, it was such a brilliant moment to see the passion of the human being being respected and acknowledged by by the investors that were in the panel. It was wonderful. Exactly.

Matt ODonovan 37:51

I agree.

Final Thanks And Closing

Stewart Noakes 37:52

Well, thank you very much for doing this. It's a pleasure to know you. I appreciate you taking some time out to do this, and thank you so much for helping the founders within the community.

Matt ODonovan 37:59

Oh, my pleasure, Stu. Uh, look forward to the next time and um keep doing what you're doing.

Stewart Noakes 38:04

Thanks, Ben.

Matt ODonovan 38:05

All right, see you later. Very good.