Twenty years ago two childhood friends, with a shared passion for entrepreneurship, embarked on a journey to revolutionise the startup funding landscape. Recognising the challenges faced by founders in securing angel investment, they created a platform that would bridge the gap between entrepreneurs and investors. Angel Investment Network was born, offering a streamlined solution for fundraising and connecting entrepreneurs with a global network of angel investors.
Now with 40 networks spanning 90 countries it is the world’s largest online angel investment platform. We speak to the co-founders Mike Lebus and James Badgett to get the inside story.
How did the business come about?
Firstly, we realised that the fundraising process was very slow and laborious. For those who didn’t have personal connections with investors, the only real way to gain angel funding was via angel networks. You’d have to send your business plan to all the angel networks that covered your area and sector, and then wait patiently for them to get back to you (if they got back to you at all).
Secondly, we realised that angels tended to invest in deals that were sent to them by friends, families, colleagues and co-investors and that they tended to invest in deals close to home, but this obviously limited the number of deals they were looking at.
We decided to build a platform that streamlined the fundraising process for entrepreneurs, gave angels access to a wider range of deal flow nationally and internationally, and also made angel investing more accessible to a larger number of people. Angel Investment Network was born!
Looking back at the past 20 years, what are you most proud of in terms of Angel Investment Network’s achievements?
We are hugely proud to have been an integral part of the startup ecosystem for 20 years, both in the UK but also expanding across the globe, helping to facilitate funding for some truly game changing businesses. We now have 40 networks spanning across 90 countries with some 2 million users of our platform.
We have helped entrepreneurs raise hundreds of millions of pounds and helped support the early stage growth of some of the most exciting and innovative companies in the world including What3Words, FanBytes, Sweatcoin, The Dots, Simba, SuperAwesome and Faction. It is of great pride that we have helped fund and grow some amazing businesses and seen their journey from startup to scaleup to exit for many.
What are some of the biggest challenges you’ve had to overcome in running Angel Investment Network?
I think the biggest challenges have been changes that are out of your control, for example financial regulations, economic shifts, taxation or huge political changes like Brexit. The aftermath of the decision to leave had a huge long-term impact on a lot of businesses, including AIN.
More recently we had to contend with a global pandemic, the war in Ukraine, surging inflation and the cost of living crisis. Investment activity is very closely linked to consumer confidence, so it’s been a tough few years in the fundraising space.
A lot of these events couldn’t have been predicted, and there is nothing you can personally do to change them, so it’s crucial to build resilience and face these changes with calm leadership, remain confident in the underlying business and nurture good relationships within the team to withstand these shocks and then work together to mitigate them.
What is the best advice you would give to founders looking to raise on the platform?
Be patient and be persistent. Based on our experience and hundreds of interviews we have conducted with investors on our platform, this is the best advice. Some popular programmes like Dragon’s Den and Shark Tank have given a false impression that one pitch meeting will lead to investment. That is simply not the case, and a lot of entrepreneurs underestimate how hard fundraising can be.
Therefore founders need to adopt a patient mindset and understand that the road ahead may be unpredictable and bumpy! Entrepreneurs will need to have a lot of calls and meetings with investors to try and get a deal over the line, and multiple rejections are an inevitable part of the process. And it’s also important to remember that nothing is confirmed until the funds are in your bank accounts, so don’t close any doors too early.
You’ve been co-founders for 20 years, what is the secret to a long term co-founder partnership and what advice would you give to others?
It is important to have co-founders with different skill sets to fill as many gaps as possible. As an entrepreneur it is important to understand your own strengths and weaknesses. Then rather than wasting time trying to improve your weaknesses, find someone who excels in those areas so you can focus on what you do best.
You also need to be able to work with someone you can have frank and sometimes stressful conversations with. In our case, we have been friends since we were children, so we have had a long standing relationship built on trust where we can be more confident in expressing our differing points of view. We are aligned on our goals but like with all co-founders there is sometimes creative tension, which is important and healthy for any business.
While AIN pioneered the medium there are now a host of other platforms out there also connecting startups with investment opportunities, how does AIN continue to differentiate itself from the competition?
Our global reach – we are the world’s largest angel investment network. Also the calibre of our investors, many of whom have been with us for years and backed multiple startups from fintech, to food and drink to healthcare. Also, our investors are experienced angels, who can add value with their experience and contacts (rather than passive investors, who offer nothing more than financial backing).
Finally I would say the speed of our onboarding process is one of our big advantages. Entrepreneurs can set up a profile and start attracting investors within a few hours, whereas this process can take several weeks on other platforms. These are all critical factors that continue to give us the edge.
Three years ago you launched an institutional investment arm, AIV Capital, what was the thinking behind this?
AIV Capital was a natural next stage of AIN’s evolution. AIN has been a game changer in democratising access to angel investment and powering the dreams of startup founders on the first stage of their fundraising journey. With AIV Capital we are now able to support businesses right through the fundraising cycle, from the idea in a bedroom to seed funding through to Series B & C rounds.
What are some of the most exciting trends you’ve seen in the startup world over 20 years?
Over the past 20 years we have been privileged to have a front row seat at all the dramatic changes in the startup ecosystem, from the emergence of social media platforms, fintech disrupting traditional banks, to the growth of once niche greentech and renewable energy solutions that have become mainstream.
More recently, the growth of AI is perhaps the most exciting development we have witnessed. It is enabling entrepreneurs to develop ideas faster and could be transformative in terms of the solutions it is helping to facilitate.
Also as a global platform we have also witnessed the growing number of cross border transitions as dealflow has developed internationally. When we started out, investors tended to invest close to home, but that is no longer the case, and angels are now much more willing to cast their net more widely.
You now have 40 networks spanning 90 countries. Which markets are you seeing the most growth in and where is there exciting potential?
It has been so exciting to support the development of nascent startup ecosystems across the globe. Our networks in the UK, USA, Germany and Australia have always seen strong growth, and we are also seeing a rapid rise of activity across emerging markets in Asia and Africa. The entrepreneurial mindset is truly something that unites the globe and helps to bring down barriers.
What role do you see Angel Investment Network playing in the future of the startup ecosystem?
As a central player in the global startup ecosystem, we’ll continue to champion new businesses and drive innovation. Startups are the backbone of the world economy and we are proud of our continuing work to help them find the funding they need to become the great businesses of tomorrow.
Looking for investment opportunities? Join us at angel investment network, where global investors meet the great businesses of tomorrow.
