An interview our founder Mike Lebus did with The Sups

Mike Lebus is co-founder of Angel Investment Network , the world's largest angel network that connects entrepreneurs and investors worldwide.

Carrie: Mike I have to ask-how did you manage to go into business for yourself at such a young age?

Mike: Well I started a business with my best friend when we left Uni. Everyone always says it was a brave decision, but actually I think it’s the complete opposite because the younger you are when you start your business, the less responsibilities you have. So you don’t have a family, or kids, or a mortgage, or anything like that. And the older you get I guess the more financial responsibility you have, so the more reasons you have not to start up your own business. It’s higher risk. So if you start one when you’re young and it doesn’t work out, you still have time to do something else I guess. So that would be one piece of advice. Start your business when you are as young as you can.

Carrie: That’s so interesting! I’ve honestly never heard that before. So you’re fresh out of Uni….

Mike: Yes I was 24, we’ve been running for 8 years now. It’s an online network that connects entrepreneurs and investors. Kind of like a dating website but rather than boy meets girl its person who needs money meets person who has money.

Carrie: Sounds like most dating websites to me pet…That’s very ambitious though for your first business. How did you already have the connections to make it work?

Mike: Well we didn’t really. We came at it from a different angle. My business partner and I were trying to raise money for another venture that never went anywhere. And when we were going through the process of raising the money we realised that there was no real place for Angel Investors. You had to send your proposal to each of the regional networks, so we wanted to I guess create a portal where you could just put it in one place and then everyone could see it. Kind of like Right Move has done for property, rather than going to all the different property websites you can just go there and it aggregates it all into one places. Making it easy for investors to find deals and making it easier for entrepreneurs to find investors in one place.

Carrie: Did people take you seriously when you came to them with this proposition at 24?

Mike: It’s a good point actually. Because we mainly started as an online business people didn’t really know how old we were. And we never actually raised money for ourselves, we just grew it organically. So again, being an online business it was quite cheap to get going. So we self-funded it, but because we were so young we worried that we wouldn’t be taken seriously, so we could I guess hide behind the computer screen of an online business…and then once we reached a certain age we then started doing more off-line and face to face stuff. But yeah it was definitely a concern at the time.

Carrie: When you start something like this, do you have in mind that you would get 1000 new members a month or connect 60, 000 people? Did you think it would get this big?

Mike: No. You can obviously hope... Originally we didn’t even know it was going to become international. So we originally just started it in the UK. I’d studied languages at Uni so it wasn’t actually until a year later that we thought about rolling it out internationally. But it’s also hard when you’re raising money as well its hard to guess where you’re going to end up. Because you don’t want to be too conservative. And you don’t want to be too confident because you don’t want to put people off so it’s one of the problems with start-ups. It is very, very hard to predict your growth and where you are going to end up in 3, 4, 5 years

Carrie: What seems so nice about your company is that as well as connecting people, you have a blog that advises them. Is that something you did from the beginning?

Mike: I guess it’s probably called Content Marketing. So you give the right people content and you hope that it’s helpful and that you connect with them through that way. It’s also a really important part of social media, rather than just selling your product, you engage with your audience and give them advice, help them out and hope that you build trust with people that way. Make things a bit more personal.

Carrie: Stupid question alert Mike: Why do investors want to help entrepreneurs?

Mike: A few reasons. Obviously the goal is to make a massive return on your investment like Facebook, you try and pick a winner. Lots of investors are retired or are at retirement age and they want to give something back to the younger generation. Or just a way of filling their time, also in the UK and other countries there are tax incentives for investing in start-up companies. So we have to schemes called the EIS and the SEIS where companies can apply to HRMC to qualify. Then anyone who invests in these companies can get tax benefits. It’s the government’s way of incentivising people to invest in start-ups because they are obviously great for the economy.

Carrie: Bloody hell. You know your stuff Mike. Now with the sheer volume of people using your site you must have strict guidelines. How do you know you can trust your entrepreneurs and investors?

Mike: Well all the business plans, all the ideas, we check them before they go online, just to check that they’re not completely bonkers or illegal (laughs). But we can’t do anything formal. And the investors know that they need to do their own form of investigation before they invest. And on the investors side, again we do as many checks as we can but obviously the entrepreneurs have to do their own checks. It’s also very much based on feedback. So you know if someone says “this person may very well not be serious", then we will take them off the network. I suppose it’s a bit like EBay, it’s an open network and if there is negative feedback about someone then we take them off.

Carrie: Speaking of feedback. You have a very strong following on Twitter. What other forms of social networking do you use and how do you make them work?

Mike: We do Twitter, we have a Facebook Group, a LinkedIn Group, obviously because most of the companies and clients are businesses themselves. So yeah a lot of them are on Linkedin, and our blog of course so that basically covers our social networking.

Carrie: And how many people work for you in your Core Team?

Mike: My business partner and myself who are the two directors, a team of 6 brokers, and then we have a web development team of 4 people

Carrie: As this rolls out and as you employ more and more people, how difficult is it for you to relinquish control and accept feedback from people who weren’t there at the inception of Angel Investments?

Mike: Well I’m a bit of a control freak so it’s quite difficult (laughs). Our hiring policy over the years has been getting people in to do part time jobs, then if it goes well we take them on, so I guess we dip our toe in the water with people before we take them on full time. It is difficult though. Really you have to take time to find people you trust to do it, the same as any job. Then monitor what they are doing, so if they aren’t doing it right then you can give them a few little pointers. We are still a relatively small company so it’s not hard to monitor what people are doing.

Carrie: A lot of our readers are in Uni or tentatively venturing into start-ups. How established does an entrepreneur have to be before seeking help from an Angel Investor?

Mike: It really varies. Some people it depends on the investor, it depends on the company. So some investors will invest in something when it is just an idea. So you really don’t have to have done anything. Our advice is normally to try and make as much progress as you can on the resources that you have. Because the more progress you make a) the more effective it usually becomes to the investor and b) probably the higher the valuation will be, so you will have to give away less of your company.

Carrie: Cheeky question: How rich do you have to be to call yourself an Angel Investor?

Mike: There’s two criteria in the UK. You have to be a “Sophisticated Investor" or a “High Net Worth Investor" and those are the two. You have to fill one of those criteria in order to receive deals. I believe one is that you earn over £100,000 (pa) and the other is that you have over £250,000 in assets, not including your property. Don’t hold me to it but that’s what I believe.

Carrie: Sounds good to me. Might hold off for this year then eh… Now I think the most important question of the interview is about to come up so prepare yourself Mike: Do Angel Investors ever get to dress up as actual angels?

Mike: Not yet. But never say never!

Carrie: What-not even at your Christmas parties? I’m gutted mike 

Mike: (Laughs) Sorry.

Carrie: What’s the best piece of advice you’ve ever heard an Angel give an Entrepreneur?

Mike: To build a well-rounded team is probably the best piece of advice, because its really important a) from an investors’ point of view that they have people who fill all the roles and b) from your own point of view it’s important to know your strengths and your weaknesses, and try and get people on your team who have the skill set that you don’t necessarily have.

Carrie: And finally Mike, 2014 is here, what’s the most exciting thing on the horizon for you and Angel Investment Network ?

Mike: Well we just launched a new version of our website so I guess watching that grow. And we are about to launch in quite a few new countries as well so just seeing the continued growth really.

URL : http://mag.thesups.com/issue1/