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The ‘Great Resignation’, angel investing, and why they are going hand-in-hand

Posted on May 20, 2022 Written by Administrator

Regardless of what we see in the movies or on TV, not everyone who quits a job does so with a slam of the door (literally or figuratively). More often than not, it is a considered action, with the prime motivation of taking advantage of an opportunity to better one’s circumstances. That will likely be the case with those adding to the unusually high number of people quitting that has been called ‘The Great Resignation’. 2022 is seeing Britons leaving their jobs at the highest rate for over a decade.[1]

Notably, alongside the ‘Great Resignation’ there has also been an increased interest in angel investment, with an uptick in people looking to invest in start-ups – according to the research firm Beauhurst: angel networks are becoming an increasingly active and important part of the UK’s high-growth eco system.[2]

Whilst these two phenomena may seem unconnected, when you consider what drives the people behind the statistics, much more becomes clear: there is a notable overlap between why someone may consider leaving their current role, and why they may be interested in becoming an angel investor.

An angel investor is an individual that invests in early stage companies and is typically a High Net Worth Individual – they have an annual salary of at least £100k, or net assets, excluding property and pensions, worth £250k.

Empowerment

After the pandemic, more people are looking to feel empowered by their work. By becoming an angel investor, you can spend your time and money helping to grow businesses that inspire you. Moreover, you have the chance to enrich yourself – while angel investing is riskier than other asset classes, and is less liquid, it does have the potential to offer greater returns.

Research conducted by Envestors over 2021/22 analysed the portfolios of nearly 50 experienced angel investors and found a weighted average Internal Rate of Return (IRR) of 14.7%.

Participants were required to have invested a minimum of £250k in at least 5 companies over a ten-year period, and the study found that:

• 89% of respondents showed a net gain

• 11% of respondents showed a net loss

• 173 of the businesses had exited while 368 had failed and 1,119 were still in play

As an active angel myself, I find the results of the report enlightening. Angel investing is known for being high risk, but what the study clearly shows is that it can be very lucrative.

Furthermore, under the HMRC’s Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS), angel investors receive income tax relief of 30-50% on funds invested in start-ups and early-stage businesses. This amazing scheme has helped to raise £1.929 billion for 3,920 companies, yet is still surprisingly unknown to many potential investors who could benefit.

Impact

As an angel investor, you know you are making a real difference to a start-up.

Rather than feeling like a small cog in a big machine, you can make a huge impact to a start-up, not only in terms of cash, but by providing the knowledge you have gained from your experience and your connections. Angels are typically evangelists for the businesses they support and can provide advice and strategic direction by sitting as a non-executive director, advisor, or just acting as a champion.

Community

If leaving work has meant meeting fewer new people, angel investing can fill the gap. Many investors join angel networks, not only to find their next great opportunity, but also to meet like-minded people. In addition to the social aspects, joining a network can make it easier for you to find good investment opportunities. As well as this, investors that join a network benefit from deal flow, support in due diligence and opportunities to participate in larger deals through syndication.

Beauhurst has produced a report of the most active angel network in the UK right now, the top three being Envestors, Minerva Business Angel Network, and Cambridge Angels.

On the flip side, working closely with a start-up also means increasing your network of enthusiastic entrepreneurs, with whom you can share a sense of purpose.

To minimise risk, working with an angel network listed on the Financial Conduct Authority (FCA) register is recommended.

Flexibility

After the pandemic, many people have opened their eyes to the possibility of flexible working.

Especially with the use of digital platforms such as Envestors’, you can be a nomadic angel and work from anywhere in the world.

Ultimately, if you’re one of the half a million people in the UK that qualifies as a High Net Worth Individual, and are looking for more empowerment, impact, community and flexibility, now is the time to consider becoming an angel investor.

ABOUT THE AUTHOR

Oliver Woolley is CEO of Envestors. Envestors’ digital investment platform brings together entrepreneurs and investors across geographies, communities and sectors – creating the single marketplace for early stage investment in the UK.

Envestors partners with accelerators, incubators and angel networks to provide a white-label platform empowering them to promote deals, engage investors and connect to other networks.

Founded in 2004, Envestors has helped more than 200 high growth businesses raise more than £100m through its own private investment club.

Envestors is authorised and regulated by the Financial Conduct Authority.

Web: https://www.envestors.co.uk/

LinkedIn: https://www.linkedin.com/company/envestors-llp/

Twitter: @EnvestorsLondon

[1] https://www.standard.co.uk/business/great-resignation-uk-rate-deutsche-bank-sanjay-raja-b978084.html

[2] https://www.beauhurst.com/blog/top-angel-networks-uk/

Why establishing ‘who you are’ is still the biggest challenge in Internet Customer Experience

Posted on May 18, 2022 Written by Administrator

On the Internet, nobody really knows who you are. Digital identity has been an afterthought. Today this is one of the biggest weaknesses in terms of cybersecurity and long-term sustainability of the digital economy. However, things are changing, and fast. This is an area that needs to be understood much better.

Let’s begin by clarifying the definitions of personal data.

Identification: the process of identifying an individual

Authentication: the methods used to re-identify and validate individual identities either by what they have (eg SIM, phone, cookie), what they know (eg password or pin) or who they are (eg biometrics)

Verification: the steps taken to corroborate information provided by the individual by accessing trusted data sources and services (eg data brokers, aggregators, telcos)

ARE OUR IDENTITIES SECURE?

The security of personal data and identity is now a major concern for consumers. Each year, the Mobile Ecosystem Forum (MEF) surveys the level of trust in the ecosystem, and 2021 data revealed a clear gap between the level of expectations from consumers versus real experience. The gap for mobile apps and services keeping data secure (versus the expectation) is 27 percentage points; the gap for privacy is 28 percentage points. This size of gap usually indicates a breaking point in the level of trust between users and a product. In short, the situation looks serious.

After scandals such as phishing or account take-overs, consumers are worried. From the 2021 MEF Survey, the top user concerns are:

Being defrauded / losing money – 49%
Cybercriminals gaining access to my data – 49%
Someone gaining access to my mobile – 47%
My online activity being monitored – 43%
Losing data from my device – 41%
Companies sharing or selling my data – 39%
Spam / junk email – 37%
Companies experiencing a data breach – 33%

Interestingly, None of the above scores just 6%.

Concerns over Personal Data Security and Privacy is now a reason to delete an app (37%), avoid installing one (33%) or stop using a service altogether (29%). The level of authentication/security is an element with clear impact to consumer preferences.

ONLINE THREATS

In 2015, global fraud amounted to $3trillion dollars. By 2025, the figure will be $10.5trillion from fraud and cybercrime. The implication is that identity and access management to enterprise systems is becoming increasingly critical.

Globally, we are seeing a pronounced move towards an increasing reliance on digital identity and a clear move away from a distinctly unexceptional user experience and inadequate underlying security. Industry is having to develop new solutions that (a) meet the evolving needs of the user experience and (b) work to mitigate the threats.

Online threats are becoming more intense, as is the inevitable fraud that drives these threats. Globally, 59% of enterprises surveyed in 2021 by MEF cited security and fraud prevention as the key driver for digital identity and authentication. The solutions becoming available seek to tackle some of the major issues we are currently seeing:

Device compromisation – where a hostile party can take control of a device remotely
Smishing – when fraudsters attempt to elicit sensitive personal data, passwords, or banking details through SMS (the most common ways to authenticate globally)
SIM (Subscriber Identity Modules) swapping: where a mobile phone identity is swapped with the intention of taking over an account in order to impersonate the user (e.g. making calls, receiving authorisation codes etc.)

MODELS FOR PERSONAL DATA AND IDENTITY

So, what are the models for personal data and identity? This is a critical question to ask. We need to analyse the ‘architecture’ of personal data/identity. The differences among these models implies different applications and threats. We can identify three architectures that are developing and succeeding across the globe that link the individual’s attributes to databases. Interestingly, biometrics are the common thread across all these architectures:

Centralised model – often operated by a government or consortium of financial institutions. In this model, an individual’s information is handled on a centralised database from cradle to grave and has the effect of offering a simplified means of establishing digital identity for a range of services. An example of this approach is Singapore’s SingPass.

Federated model – operating with a series of distributed databases that represent different groupings and where parties can access personal data in one of those databases. The European eIDAS system is an example of one federated approach where trusted service providers can issue and deliver digital signatures and identity. Countries adopting this model include Belgium, the Netherlands and Italy

Self-sovereign identity model – which has no centralised database where the individual owns, manages, controls, and issues their personal data.

Each of these models needs to ensure that the digital identity provided by a trusted service provider has strong authentication. In practice, we are starting to see the emergence of a new model based on these three models. This could be considered as the establishment of digital credentials. An example of this would be an individual’s Covid status. This would allow a person to obtain their signed and verified health credentials which would then be trusted for access to venues or travel.

Clearly, there are issues around maintaining an individual’s privacy and how authentication fits into the process. Standards are developing that can provide further reassurance. Furthermore, there is the issue of regulation, how liability is distributed in this model of verifiable credentials, and how data is controlled and handled under regulatory requirements such as GDPR.

THE FUTURE

The ecosystem is fighting back from the threats of cyberattacks and we will see more of these innovative solutions emerge. There might not be an overall winner, but the co-existence of alternative approaches is now expected.

The good news is that the effort required to maintain security and reduce fraud will be significantly lessened by these technologies. This is because they will replace or enhance inadequate access control and authentication. Organisations and governments need this enhanced measure of multi-factor authentication to progress in the coming years. And individuals need the knowledge that their data is safe and that they can exercise trust in the integrity of it.

The global economy needs solutions to the developing issues that personal identity and authentication present. There are three major pillars to these solutions:

the role of the individual
establishing trust with organisations
handling the online experience.

To review or define an internal solution we should cover these three essential points. Covid has had a major impact on the way we live our lives and the ability to conduct in-person transactions has been transformed. Individuals are forced to navigate a remote and brutal online environment whilst establishing their identity. They are subject to ransomware and continual threats. This transformation is fast-paced and is requiring a strong degree of trust with sharing personal data with organisations and authorities. Clearly, there are inherent risks with online interactions and the sharing of personal data and the traditional ways of handling these are no longer fit for purpose.

ABOUT THE AUTHOR

Dario Betti is CEO of MEF (Mobile Ecosystem Forum) a global trade body established in 2000 and headquartered in the UK with members across the world. As the voice of the mobile ecosystem, it focuses on cross-industry best practices, anti-fraud and monetisation. The Forum provides its members with global and cross-sector platforms for networking, collaboration and advancing industry solutions.

Web: https://mobileecosystemforum.com/

Twitter: https://twitter.com/mef

LinkedIn: https://www.linkedin.com/company/mobile-ecosystem-forum

Facebook: https://www.facebook.com/MobileEcosystemForum/

Do Not Be Your Own Project Manager For Small-Scale Property Development Projects

Posted on May 4, 2022 Written by Administrator

Many people assume that a conversion project where a commercial property is converted to residential would be more difficult and stressful than a refurb or flip. After all, they generate much bigger profits, so therefore surely, they must be more challenging. That’s not been my experience, and I’ve been in development for forty-odd years, so I have seen more than a few of each. For my money, conversions are much easier, and that’s mainly because you can afford to hire better people to do more of the work that you might otherwise have done yourself.

Many new developers consider managing their own projects, presumably to save money or perhaps because they think they will enjoy it. Don’t do it. With a refurb or flip, you’ve little choice but to adopt a DIY approach since your budget won’t stretch to hiring a project manager. But with a conversion project, the budget is available, and having a good project manager on board will completely transform your experience as a developer.

The problem with the DIY approach is usually a lack of experience. Don’t make the mistake of thinking that because you’ve managed a project in another sector or discipline that overseeing a construction project will be the same – it won’t. As someone who teaches new property developers for a living, I’ve taught many construction project managers how to develop property for themselves. They look surprised when I tell them not to manage their own projects. After all, surely that’s their number one advantage? The penny starts to drop when I ask them whether they are learning development in order to do more project management work or to earn enough money not to be a project manager anymore? There’s only ever been one answer to that, and that’s because project management of a construction site is hard work, and you get paid a lot less than the developer does. And getting paid more for doing less is usually an easy decision for most people to make.

The advantage to you as the developer is that your Project Manager will be coordinating everything on site so that you won’t have to. Instead, you play more of an executive role. You’ll have a weekly phone call with your project manager, who will have been to the site, to meet with the key protagonists and check on progress. They’ll also deal with the numerous bumps in the road that can crop up in development while you’re sitting at home doing something far less taxing. Compare this to the newbie, first-time, have-a-go developer who tries to manage their own project, and the stress levels are incomparable. Why be worried about meeting your construction team on site and feeling like a fish out of water due to your inexperience? A Project Manager will have your back. It’s the same when it comes to contractors trying to pull the wool over your eyes, as project managers have seen and heard it all before.

So how do you go about finding this superhero? Here are my top five tips for bagging yourself a peachy Project Manager:

1. Get some recommendations

Construction project management is a defined role in the construction industry, and there are many to be found working up and down the country. If you can, the best way of finding a good one is through word-of-mouth recommendations. Speak to other professionals such as architects and contractors to see if you hear any common names, and then go and interview them personally. Of course, you can always start with an online search to come up with a few names if you’re just starting out, but when you meet them, be sure to ask for references from their previous and existing developer clients.

2. Make sure you get on with them

I’m not suggesting that your project manager will become your best friend, but you must be able to get along. They are your eyes and ears on the ground, and they will almost certainly pay for themselves through the tighter controls that they’ll bring to your scheme. They’ll raise any issues with you and will be able to guide you based on their experience. In short, they will be the most valuable member of your team, so it makes sense to appoint someone with whom you can get along. If you’re speaking to a larger practice with several Project Managers on their team, make sure you have met in person the individual that would be appointed to your project.

3. Make sure they have experience of the type of project you’re doing

As development projects come in a wide range of shapes and sizes, from large new-build housing projects to small-scale conversion schemes, make sure that your project manager has experience doing the sort of project you’re looking to do. Ask them about similar projects they’ve done and see if you can speak to their clients to get some direct feedback, both good and bad. Conversion projects are different from new builds, so make sure they have the right track record.

4. Go local if you can

You ideally want to find a project manager who lives within striking distance of your project. There are several benefits to this. The first is a practical one: they’ll need to go to the site several times a month, and so it will cost you more if they have to travel long distances to get there. Also, it can often pay dividends for the Project Manager to have local connections. There’s a fair chance they’ll have worked with some of the other professionals on your team before, plus they’ll know other local professionals and contacts that can be called on if needed.

5. Avoid creating a clique

Recommendations can work both ways, and there’s no harm in asking your project manager for other professionals they recommend. After all, your interests are going to be aligned. You don’t want any lazy, inept, or unreliable people on board, and your Project Manager certainly won’t either. However, just be careful about creating a clique. If the Project Manager and the contractor are bosom buddies, you need to be confident that the former will call out the latter if they do something wrong. You won’t want any mistakes brushed under the carpet or, worse still, marked up as ‘sundry items’ and appearing on your bill.

So, there are a few tips to get you started. Working with a project manager on the team doesn’t mean you should never show your face on site. I would highly recommend you visit now and again to rally the troops and take the time to speak to the people who are working on the coalface. After all, they are the people who will be finding practical solutions to problems that could otherwise cost you money to fix, so it pays to be both visible and friendly.

ABOUT THE AUTHOR

Ritchie Clapson CEng MIStructE is a veteran property developer of almost 40 years and co-founder of propertyCEO, a nationwide property development and training company that helps people create a successful property development business in their spare time. It makes use of students’ existing life skills while teaching them the property, business, and mindset knowledge they need to undertake small scale developments successfully, with the emphasis on utilising existing permitted development rights to minimize risk and maximize returns.

https://propertyceo.co.uk/

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