propnology limited: Owen Angel
The business founder tells us how he's combined property and technology for a winning formula
Name: Owen Angel
Company name: propnology limited
Date launched: 19/10/15
Tell us what your business does
We have combined property and technology to create a fully automated property crowdfunding platform. Individuals can invest from as little as £500 into a range of residential and commercial property investment opportunities, across the UK.
Where did the idea for your business come from?
We began by looking at the equity crowdfunding model and explored its adaptation as a mechanism to fund property investment opportunities, rather than as a vehicle to raise money, for new businesses.
At the time, there were companies already trying to adapt the concept, without actually providing a fully automated platform, or, alternatively, exploiting existing loopholes to avoid financial regulation. We adopted best practice, from the outset, in this relatively new field, by working to ensure our model was fully compliant with the FCA’s regulatory requirements.
How did you know there was a market for it?
Digital transformation is everywhere in our daily lives, with the objective of continually automating and improving the customer experience; futhermore, property has proven to be a sound long-term investment.
We felt that these factors provided scope for exploitation in the direction which we had identified. Our solution removes the barriers to entry, traditionally associated with buy-to-let, making it more accessible to a wider audience.
What were you doing before starting up?
We had previously – successfully – co-founded and run several businesses, both in IT and property.
Have you always wanted to run your own business?
While working as employees of the same IT firm, we found that we shared the same mindset with regard to branching out on our own, so it was more a matter of waiting for the right time to present itself, as we both had financial commitments to consider. Since joining forces, some 15 years ago, we have never looked back and propnology is our fourth venture together.
How did you raise the money?
We have managed, in the past, to develop our business models by bootstrapping, without the need for private equity or VC funding. This has always been our approach in business, although we would not rule out alternative options in the future.
Describe your business model and how you make money
The platform lists a variety of property investment opportunities, across different property classes and locations, in the UK. We offer a diverse choice of properties to meet the individual objectives of our investors. In the same way as other equity-based crowdfunding platforms, we charge a ‘success fee’ when a property is successfully funded. We also continue to manage the investment vehicle, on behalf of the investors, throughout the term of the investment.
What challenges have you faced and how have you overcome them?
Without doubt, the biggest challenge we faced was the stringent regulatory requirements of the Financial Conduct Authority (FCA).
The FCA has only recently focused its attention on the crowdfunding sector and is still developing its own regulatory framework for approving applications. Consequently, the majority of crowdfunding operations have chosen to obviate direct FCA authorisation by utilising an alternative route; either by ‘piggy backing’ an existing FCA-approved institution, under an appointed representative status, or by using interim or superannuated permissions.
We decided to take the long-haul route and obtain formal approval for the propnology platform; this has been a long, arduous and challenging journey but we received our approval some nine-months after we began the process.
We are, to our knowledge, one of the first crowdfunding platforms to receive full and direct authorisation.
What was your first big breakthrough?
The launch of our platform. We used the FCA application period as an opportunity to continually develop and refine our product. Our development team was driven to distraction, at times, with our constant change requests and tweaks; however we have always maintained a clear vision of the product we wanted to create and persevered in achieving this goal.
Early feedback has been extremely encouraging and, without giving anything away, we have more exciting plans in the pipeline.
What advice would you give to budding entrepreneurs?
We believe that it is vitally important to fully research the field in which you plan to enter. The ability to work long hours, under pressure, while remaining optimistic and upbeat is, in our opinion, a significant contributor to success.
Where do you want to be in five years’ time?
Ideally, we would hope that propnology would have achieved the success that would make it the platform of choice for property investment in the UK.