James Mulvany is a successful entrepreneur, and over the past 10 years, has built multiple internet companies (including Podcast.co & Radio.co) plus a property portfolio and has made a range of angel investments in startups! Having actually never had a job in his life, he started his first business when leaving school.
“Business is never plain sailing. You have your ups and downs, you have good years and bad years, just like any job.”
James Mulvany
About a year after launching Radio.co and experiencing a great first year, James started thinking of ways to invest the profit he made.
James had been very much engaged with the local area’s startup scene, and he figured he could invest in one. So he started going to various angel pitching events.
The more James attended the pitching events, the more his angel investment network expanded. One of the things that were quite common in the angel circus was the idea of having a syndicate. A syndicate is made of five or six investors who invest together.
James found himself involved in a syndicate with some top-notch guys interested in making a few investments. The other members of the syndicate saw James as the lead to any IT related investment. They looked up to him to decide whether to invest in IT-related companies or not.
They found a few good pitches, and one concept for an augmented reality computer game stood out. At the time, there was so much hype around these gaming goggles. James’ syndicate saw this as an opportunity to make massive returns on their angel investment at that early stage. The team invested around £25,000 each. James was 29 years old at the time, so this was a considerable investment for him.
The concept James and his team invested in was good, but a couple of months into it, the startup realized that augmented reality wasn’t necessarily going to work out. They wanted to pivot to a regular computer game.
As if that was not enough, one of the startup guys fell out with the other two guys. He moved to another country, and no one could get in touch with him. The two other partners tried to get him to resign as a director of the company and forfeit his shareholding, but he just went off the radar.
Unfortunately, the main director became quite ill and at this point, the problems were just too many to handle. The startup ran out of money, and they had very little to show for the money the investors had put in. James was left with a loss of £25,000.
If you’re going to make an angel investment, it needs to be in an industry where you’re entirely convinced that your money is in good hands. Be sure that the business owners do not need any mentoring or hand-holding from you. So it’s very much, just like a hands-off investment. If you’re going to make a hands-on investment, it needs to be something that you understand for sure.
Most novel ideas tend to be volatile. If you are going to invest in new cutting-edge ideas, be prepared to lose.
If you want to be successful, you need to stay together. You don’t need to be amazing because the amazing guys crash and burn, and they quit. So keep the team together and...