HBAN is searching for plenty more fish in the sea of angel investors

17 Oct 2017

John Phelan, national director, HBAN. Image: HBAN

This week on Leaders’ Insights, we heard about how HBAN’s John Phelan is fishing to refill the pool of angel investors in Ireland.

John Phelan is the national director of Halo Angel Business Network (HBAN).

With two decades of experience in the entrepreneurial sphere, in which he established three start-ups, Phelan is well placed in the angel investment sector.

Earlier this year, he explained the matchmaking element to HBAN, a sort of Tinder for investors. In 2016, HBAN saw 50 new relationships blossom between Irish investors and start-ups.

Phelan is also the independent chair of Animation Ireland as well as a board member of Filmbase.

‘I believe in hiring people who are better than me, then giving them direction and getting out of their way’

Describe your role and what you do.

HBAN is the all-island group responsible for the promotion of business angel investment in Ireland, and is a joint initiative of InterTradeIreland and Enterprise Ireland. As the national director of HBAN, I’m responsible for building awareness of the network, recruiting more angels to invest in early-stage, high-potential start-ups, establishing syndicates and identifying the right companies for our angels to invest in. We have teams in Cork, Dublin, Galway and Waterford who are all locally connected and have their own networks of relationships that they can leverage to help investees succeed. I spend a lot of my time in each area coordinating the various teams.

How do you prioritise and organise your working life?

One of my mottos is: ‘Look after those who look after you.’ I tend to make a judgement call on priorities and timing while also managing people’s expectations and making them feel they are getting more than they expected.

What are the biggest challenges facing your sector and how are you tackling them?

The biggest challenge for HBAN is constantly engaging with potential angel investors and bringing new ones on board. There is a natural attrition rate due to investors looking after their investments, and that requires us at HBAN to continuously refill the pool of angel investors.

Last year, we ran a Business Angel Roadshow that took place in four locations across Ireland in the space of 48 hours. The initiative was a great success; we recruited 31 new angels and raised start-up funds of €6m. Besides the roadshow, HBAN organised 51 funding events throughout the country. The events saw pre-qualified, high-potential start-ups pitch to HBAN-registered angels in the hope of receiving investment. Companies in ICT, healthcare, consumer products and food received angel investment.

What are the key sector opportunities you’re capitalising on?

In recent years, there has been a significant decline in the volume of seed funding available, leaving promising start-ups struggling to source funding. This has created an opportunity for HBAN business angels, who have invested more in Irish start-ups.

The average amount invested by angels increased from €217,000 in 2015 to €272,000 last year – up 25pc. When investment from other sources is included, this is an average investment of €700,000 per company, plus the experience of the business angel syndicates, which is hard to quantify.

We have seen a significant increase in the deal flow and closing of deals in the HBAN medtech syndicate in Galway. This is also leading to syndicates teaming up with other syndicates on deals, which shows how rich and connected the network is.

What set you on the road to where you are now?

I started my own business in London in the 1990s, so I understand what it’s like to set up a business, fail and start again. This has given me an appreciation for the value that hands-on mentorship from an experienced businessperson can bring to a start-up – it can be the difference between success and failure. I love meeting entrepreneurs and seeing HBAN-supported start-ups doing well. It’s satisfying to see people that you have helped, even if only in a small way, succeed.

What was your biggest mistake and what did you learn from it?

Many years ago, I joined a company in a sector that I thought was going to be of interest to me, but soon realised I didn’t want to be in that sector. I did a poor job and quit before I was fired. It was a good lesson that taught me to only get involved with companies, sectors and teams that I am passionate about. Passion is something that helps people succeed above and beyond the norm.

How do you get the best out of your team?

At HBAN, we have a great team of people focused on building awareness of angel investing and increasing the number of angels in our network, the amount they invest and the number of deals they get behind. Achieving tangible results that are recognised internationally is a big motivator for the team.

I believe in hiring people who are better than me, then giving them direction and getting out of their way. I look for a sense of urgency and a can-do attitude.

STEM sectors receive a lot of criticism for a lack of diversity. What are your thoughts on this and what’s needed to effect change?

They do, and probably not unfairly. There have always been the comparisons between sciences and arts/humanities in university and this has followed to the workplace.

However, there are a significant number of multinational companies now concentrating on social sciences and how to engage customers using artificial intelligence. They are helping to bring the two streams together, which also helps to bridge the gap in diversity.

In my earlier career in animation and games, we had the hardcore coding developers on one side of the house and then the more creative artists on the other side. Bringing the two together and creating something that utilised the best of both worlds made for some great projects.

Who is your role model and why?

There are two businesspeople I admire, one international and one from home. Netflix founder and CEO Reed Hastings (who I did meet once) has built an incredibly successful business model that has changed the world of how we create and consume content.

In terms of an Irish businessperson, I find Michael O’Leary fascinating. I admire his simple business model, how he keeps it clean, speaks his mind and has a great attitude towards bureaucracy and nonsense.

What books have you read that you would recommend?

I enjoy reading books that deal with historical topics and also biographies. I am currently reading three books: Ardennes 1944: Hitler’s last gamble by Antony Beevor, Nudge by Thaler and Sunstein, and Sports Psychology for Dummies by Smith and Kays.

What are the essential tools and resources that get you through the working week?

My team plays a big role in getting me through the week. I also look forward to time with my family and a bit of sailing and painting at the weekend.

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