Jessica Gardner Reporter

Jessica covers Australia's technology start-up scene, writing on breaking news and trends in entrepreneurialism, media and marketing. She was previously named Australia's best New IT Journalist for 2011.

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Ask the angel investor: Philip Argy

Published 11 October 2012 04:16, Updated 21 November 2012 07:10

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Ask the angel investor: Philip Argy

Philip Argy says few angel investors will go it alone, so start-ups need to be able to present a compelling case to more than one person. Photo: Edwina Pickles

How did you get into angel investment?

I’ve always loved innovation. Intellectual property and technology law practice frequently brought me into contact with innovators looking for funding. I’ve spent the best part of 40 years doing intellectual property and technology law work and I often have inventors coming along. As their solicitor, I didn’t have the luxury of being able to lend the money and invest in them. When I retired [from a large law firm] at the end of 2007, I set up my own firm to do mediating and arbitrating and went into business mentoring and full-time angel investment.

What are some common mistakes entrepreneurs make when pitching?

They promise an IPO without the faintest idea of how this will occur. They know that investors are focused on what sort of exit they’re going to get, so they leap to [an IPO]. Yes it’s what people want to hear but they need to be persuaded that there’s a credible path to that and not merely unfounded assertion. There’s so many websites now on how to pitch to investors that people are mouthing the words but there’s no credibility. Most investors would rather have a far more modest plan that is achievable because that can take you to the next round.

Why or when shouldn’t a business raise equity capital?

Start with family, friends and fools until concept proven to point where angels will be interested.

How do I get you to invest in my venture?

Make a great pitch and be in my area of preferred interest. Be compelling to two or three other angels at least. This is important because very few angel investors will go it alone. The way we tend to work in Sydney Angels is everyone has their pet area of interest. Mine is IP and IP protection, legal issues and governance. For others it could be in marketing and promotion or financial analysis. What you tend to find works is when three people with complementary skill sets all invest and can contribute their area of expertise to the entrepreneur and the enterprise. You get a really nice synergy with the entrepreneur. Angel investment is really a form of cash with business mentoring.

What kind of companies or sectors are you keen on?

I’ve plateaued out at present with 14 investments and I’m waiting for the next exit to fund a new round of investments but I prefer protectable intellectual property in technological innovation.

MORE INSIGHTS FROM ANGEL INVESTORS:

  • Guy King – “Wasting time explaining the obvious is a personal peeve. No need to tell us that mobile is a fast-growing medium. Also, any execution or traction that entrepreneurs have achieved should always be framed as part of the plan of a grand vision.”
  • Jim Kalokerinos – Entrepreneurs will normally give a great pitch if they can easily explain the issue or need that they are addressing, point out their innovative solution to this and then explain what the opportunity is for the investor and the customer.
  • Mathias Kopp – “Mistakes or failures, other than fatal ones, are critical and even necessary for any business. They are a rich source of learning and the only trigger of change.”

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