The company: Martlet is a new corporate angel initiative launched by Marshall of Cambridge designed to fire a fresh spurt of growth for the regional economy. Investments will be made primarily in companies within Greater Cambridge and East Anglia at an early stage, with sums of £25,000 to £100,000 being injected in each selected opportunity.
Investment director, Peter Cowley, is an experienced entrepreneur, angel investor and business mentor. His company Camdata Ltd, a custom and semi-custom specialist electronics business, is still going strong.
He is also involved in construction, having speculatively built five houses, and recently project managed the new Cambridge CAB AdviceHub by the station. He has been chair of several charities over the last decade - including the CAB, Focus12 (a drug and alcohol charity which has Russell Brand and Davina McCall as patrons) – and is chair of Cambridge Centre for Sixth Form Studies1. Can you briefly describe the work of Camdata Ltd?
I formed Camdata when I returned from Bavaria in 1984. Like many businesses we have had our good and bad times, including selling Camdata to a friend, buying it back 6 months later and then buying his business two years later.
Camdata is now a lifestyle business developing and manufacturing rugged computer products and security devices, with specific brands/themes – a wide range of customised rugged peripherals; the Microscribe range of rugged handheld terminals/computers; the MeLock PC-locking security device; RFIDCAM – specialist RFID systems; ZedCam covert camera systems and we are the second largest UK supplier of terminals to control traffic lights!
2. How did you become involved in the local angel community?
I studied Engineering and Computer Science at Cambridge in the ’70s and returned to live near Cambridge about 7 years ago. I set up a mentoring scheme for the Computer Lab Ring – a Computer Scientist graduate association and have formally mentored many people since then.
Although I had already invested in a biotech start-up based in York, I invested in two of my Ring mentees and sold one, Ept Computing, to Redgate for a decent investment multiple. Through the Ring I have met several of the local angels and joined the Cambridge Angels about a year ago. I have led on two Angel investments in the last 12 months – the Plumis low cost automatic fire suppression system and the WorkSnug iPhone app.
3. How did the Martlet venture come about?
Robert Marshall and I got to know each other over dinner and we discussed accelerating the Marshall early stage investment programme, with which Marshall has been so successful with their Abcam investment. Robert recognised that I had the knowledge, experience and connections, and Martlet was hatched after discussions with the senior exec team of the Marshall group.
4. How important is the new investment vehicle to stimulating growth of the local economy?
There are many angel investors in the local community and within the region who invest in Cambridge start-ups. Martlet will be co-investing with these and although Martlet’s financial clout is at the upper end of this group, it is unlikely to create a step change. However, the Marshall brand will lead to increased awareness of the angel investment concept and providing we select some of the successful ones, we will undoubtedly stimulate local growth.
5. Would you like to see more corporate venturing in the region such as Marshall, Qualcomm and one or two others are pursuing?
Martlet is based on an earlier stage and more diverse investment model than Qualcomm, who allocated US$500 million primarily for the wireless sector. We are concentrating on co-investing with angels and seed funds. Each corporate venture will have their own skills and philosophies, and I am confident the market for early stage investment is far from saturated. Hence, I welcome additional local corporate venture activity.
6. Do you think the Government could do anything additionally to stimulate more corporate venturing and also to encourage more individual entrepreneurs to ‘pay it forward’?
The tax-efficient ‘Corporate Venturing Scheme’, that raised £100m for 870 companies during the last decade, expired in March 2010. I have seen no evidence that it has been renewed, but there have been some significant improvements, in the recent budget, in the tax relief for angel investors. That is, not to say, that the Government could not do more.
7. The country is gripped in start-up fever. Will this stimulate more and better young companies?
There is no doubt that more companies are being started, driven by the media, unemployment and observing the success of friends/colleagues. The jury is out on whether they will be better companies, but entrepreneurship is a learning process and failures teach founders how to do it better next time.
8. How would you assess the quality of start-up enterprises you see on your ‘rounds’?
As expected, varied. What is always present is passion and enthusiasm, though not all ideas are realistic or investable. Of course, very few start-ups of any quality will achieve (or even need) external investment. I have two ‘rounds’ – mentoring, where I help people to grow organically or with the assistance of debt/equity/grant finance; and angel investing, where I am looking to invest in potentially high growth early stage companies in order to make a multiple return within a few years. There is some overlap and, with some, I continue to mentor post-investment. And finally, quality is subjective and my crystal ball is usually just as opaque as the next person’s!
9. The view has been expressed that young companies should be more commercial earlier in their life cycle. Would you agree?
There is technology coming out of Universities for which being commercially minded is not a pre-requisite. I am always pleased to see strong commercial sense as part of the team and, if lacking, there are many people who can provide commercial help to early stage start-ups, albeit at a cost in terms of cash or sweat equity. Angels commonly back businesses with skills gaps in the team, which can then be filled by the incoming cash or by non-executive work by the angels.
Secondary and tertiary education is increasingly offering specific business content, which is improving commercial sense in youngsters. However, real experience is always valuable.
10. Can we escape the reality that the US funds and nurtures its start-ups more effectively than we do in the UK?
The US is a huge market compared with the UK, and although it is similar in size to Europe, we all know how difficult it is to get into the ‘harmonised’ EU market. Hence the start-up has a much bigger addressable customer base in the US, which even applies to web-based start-ups.
There is much more money available in the US to fund hi-tech start-ups. A friend went to San Francisco to get funding for Rapportive and Xensource is a prime example of California funding a University spin-out. However, I do think the UK is just as good at nurturing start-ups as the US. I intend that Martlet will help reduce the funding gap.