Meet the Investor: Tim Mills, Angel CoFund

Investment director of the £50m government-backed angel network, Mills explains why he isn't interested in "backing daydreams"...

Firm: Angel CoFund
Name: Tim Mills

Where are you based?

I’m based in Sheffield but the Angel CoFund has offices in both London and Sheffield and invest across the UK.

What kind of investor are you?

The Angel CoFund, backed by the British Business Bank, specifically partners with business angels, business angel syndicates and investors in the UK (although a good number of our co-investors are non-UK based). We usually invest at seed level, partnering with the angel investors to provide long-term capital into high-potential UK small and medium enterprises at all stages of development and across all sectors.

What kind of deals do you finance?

We look to make commercial equity or quasi-equity investments of between £100,000 and £1m alongside angel investors and other co-investors. We also set aside at least £1 for every £1 we invest in order to provide follow-on investment in later funding rounds. So, we aim to be there to support the companies we back as they grow.

What kind of person do you invest in?

Rarely is it just about an individual. We are looking to invest in teams of focused people who have great ideas and, furthermore, have the skills and drive to execute the shaping of those ideas into a commercial enterprise. Every start-up begins with the founders, and it is their passion that gets things going, but scaling usually requires building a strong team of supporters around the business (whether employees, advisors, investors or customers). We aim to help build those teams.

How do you source prospects?

Prospects are found through a number of channels. The businesses we back come to us through business angels or angel syndicates who are already committed to investing and want the support of the Angel CoFund to make their money go further. Networking through events and awards are also useful avenues for us to source potential investments – but we only invest when a syndicate or business angel is already on-board.

What is your ideal investment?

Our ideal investment is any high-potential fast-growth UK business, which has a strong team and a clear and credible plan to succeed. Although we do look at businesses at all stages, we tend to get involved in enterprises that already have early traction in their sector and are looking for more resources to scale-up.

What are your USPs?

With £100m in capital and a long-term investment horizon we are able to back businesses through multiple rounds of funding as they grow. We work alongside the angel investors, giving them the resources they need to really propel companies forward. The fund was established by a private sector consortium and we have excellent ties across the European venture capital market.

What are the hot sectors?

Med-tech is thriving at the moment, driven by some strong macro trends around healthcare, and the UK is able to benefit from some of the best universities in the world, which are leading globally in med-tech development. The sector has a lot to offer investors in terms of potential return on investment, but also has the capacity to deliver huge social benefits.

Three things a company should be able to offer an investor?

  1. A clear and well thought-out vision when it comes to the business plan
  2. Founders that are able to show they can be agile and creative, as even the best laid plans often need to be revised in the face of reality.
  3. We also look for teams that have more than just great ideas; we want people that can execute and bring vision into reality.

What is the cardinal sin when looking for investment?

Perhaps the most common errors I see relate to either an inability to articulate how the business represents a strong commercial proposition or a plan that relies on weak or un-tested assumptions.We like people with vision, but we’re not interested in backing daydreams. If you can’t sell your business, it’s hard for any investor to believe you can sell a product.

What continuing involvement do you like in an investment?

Every investment we make represents the start of a partnership, and we’re all aligned in achieving success, so we work with investments as appropriate so as to help drive growth. Although we’re not a hands-on investor, we do expect our angel co-investors to be. We also are able to and plan to make further investments into business, dependent upon a similar evaluation process applied to the initial investments.

What has been your best performing investment to date?

We invest across a number of sectors into a wide range of businesses – it wouldn’t be fair to pick one as our best performing! We have backed some fantastic consumer businesses, which have gone on to raise more money and become household names, like YPlan and Gousto. But we have also backed a number of fantastic technologies in cleantech, finance and med-tech, which are making waves in their own industries.

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