By: Modwenna Rees-Mogg
One of the facets of the angel market that gives me the greatest intellectual pleasure is the names VCs, angel investors and entrepreneurial advisers select for their businesses.
Over the years entrepreneurial minded investors and advisers have chosen to name their businesses after everything from street names, to Roman and Greek goddesses, famous military figures, the angelic choirs and even aquatic animals. And more recently there has been a distinct trend towards our adopting the names of our avian friends.
My interest was piqued when I heard that the latest organisation making a splash in the market (no pun intended!) is called Flamingo Sky [www.flamingosky.com]. The people who had the creativity to select such an evocative name must surely be a bit different to the norm, I thought. And in a market like ours, which is ripe for change, that, perhaps, would not be such a bad thing.
There is definitely something special about Flamingo Sky – on its website it describes itself by the outcome it achieves, not by some standardised business nomenclature. So it is not an adviser or boutique or corporate finance house, but an organisation that “bridges the gap between early stage high-tech/high-growth businesses and suitable investment sources”.
I caught up with Robert Steele, one of the founders of Flamingo Sky, to find out more about him and his co-founders. And, from the moment Robert opened his mouth, I knew that I had come across someone who will make a significant impact on us all. Why? Because what he said made profound sense and it is absolutely clear he is no fool.
Worldly-wise Steele has seen it all before. He sold his first business when he was 26, has created and sold more for himself and for others. He understands risk, when to flex and when to stand firm. And most importantly of all he has recognised that money is only one tool that is used in entrepreneurial endeavour to create success. And that it is not the most important one at that.
Steele believes that, like any other asset a business uses to generate a profitable outcome, it is not about how much money is used, but how and when the right amount is applied to get the desired outcome. And in the end (or at exit if you prefer), the money you do or do not receive is really only the physical manifestation the rewards you receive for the effort you have put in and for the risks taken.
Perhaps I can explain. Robert and his team (all successful cashed out tech entrepreneurs or serious executives by the way), have spent years watching what growth models do and don’t work in our market – both as entrepreneurs and investors. What they have spotted is that it is the people, and not the money, that makes a business tick. If you get the team right, they will implement the right strategy. Adopting the right strategy will generate great profits or profit potential. And as night follows day, investment chases great returns. So they see their job as helping to get the team right (perhaps even becoming part of it for a time), and to help that team get the strategy right. By doing that they not only get the right commercial outcome, but get investors beating down the doors to join the party too.
Those of you who have been reading AngelNews for a while or who come along to our events and conferences will know that quite simply I could not agree more with what Robert and his friends say. It’s not the equity gap that we need to worry about in this country, it’s the team and strategy gaps that need sorting and included in team and strategy is the investment piece.
What is so refreshing to me is the fact that the Flamingo Sky is quite determined to succeed. Over the last year or two the Flamingo Sky team has repeatedly swallowed its own medicine. The team has been doing to itself what it offers to others, namely committing hours of time to structuring, shaping and smoothing its own business until it works and has the business model and strategy that will make it attractive to investors. And sure enough the investors are now flocking over it. What they like is the tone of what Flamingo Sky does – the proactive engagement before during and after an investment round, the transparency of communication and more. Entrepreneurs like it too – they are treated like adults and not only does their business come out better shaped but also with real investment!
The big difference is that Flamingo Sky is not speaking to investors to raise money for itself, it is engaging to help raise funding for is clients.
I think one of the reasons that investors like Robert is that he speaks more like the investing cashed out entrepreneur that he is.
These are the sorts of things that he says.
“Don’t spend too much time focusing on the exit – just don’t invest in a business where there is no exit to be had”
“Don’t be scared to tell an entrepreneur with a bad business model to give up and go and get a job”
“If the reward you want for your endeavours is money, make sure you only back something that is going to make money”
“Don’t worry about how many shares you are selling today or even for what price, worry about making sure you still hold the stake you want, when the exit comes.”
“If you cannot do the due diligence yourself, make sure you find someone else who will do a good job for you.”
“Watch the pipeline, don’t just wait for the water to drip from the tap”
“My goal is not just to get you funded now, it is to set you up so you get all the funding you need, at the times when you need it.”
If this is the sort of language that appeals to you, it may be well worth giving Robert a call.
Robert knows that real success comes from doing what you know best, so he is specialising in working with what he understands: high-tech, high-growth businesses in renewables, network monitoring and security, telemedicine, biotech and e-learning. It is fortuitous that these are the sectors where the solutions to today’s most significant global threats and challenges will emerge and so will create the really big winners from an investment perspective.
And what as I ended our interview were the most significant threats and challenges facing Flamingo Sky at the moment, I asked?
“It’s going to be finding the other people who think like us when it comes to growing businesses”
Robert told me. “I need more people who really get what sweat equity means, who don’t just want to be a titular NED of a young company, but get in there and provide what a company needs. For some this will be hours of hard graft, for others it will be cash investment and for some it will be contacts and introductions, but they will all have one thing in common.They know that you have to put in before you get out and that putting in what is right is more important than putting in the most.