A review: Delio’s angel networks roundtable

Angel networks across the UK and Europe joined Delio’s recent virtual roundtable event. The group of experienced investors and industry experts shared their thoughts and ideas around some of the most pertinent topics of the moment while discussing the opportunities and challenges facing angel networks and angel investors.

With everything from the global economic recovery to business ethics being covered, there was plenty of fascinating debate to be had. Below, we highlight some of the high-level discussion points that were explored during the event.

In light of Deliveroo’s overheated stock market flotation, are companies now expected to be ethical employers, or is it still a market differentiator?

Our first area of discussion was a topical one that followed the news that Deliveroo recently lost more than a quarter of its value on its first day of trading. There were many theories behind why this was such an unsuccessful stock market launch for the food delivery giant, but one argument that grabbed the media’s attention was the scrutiny of their workers’ rights. Therefore, we asked our panel whether staff working conditions and the way companies operate is a more significant consideration for investors now than it was previously.

The general consensus from our group was that compared to 18 months ago, angel investors and angel networks are definitely asking for more information around how employees are treated and what benefits they are entitled to as part of their due diligence. Beyond how businesses treat their staff, it became apparent that organisations’ ethical approach was seen as a topic of increasing importance which covers many different bases.

The panel said that many of the ethical dilemmas that businesses face often stem from early-stage companies that start out as sole individuals, that eventually begin growing rapidly. This often means that they need to hire staff quickly without necessarily having some of the correct HR protocols and procedures in place. In these scenarios, current legislation does not always support early-stage companies. One of our panel members suggested that in order for the UK to create more successful early-stage companies (in tech or any other industry), then further discussion did need to take place around workers’ rights. However, the panel also agreed that this does not necessarily mean providing workers with additional rights, but instead focussing on the creation of realistic working conditions that allow both employees and the business to flourish.

In addition to the above challenges, the Covid-19 pandemic has also created an additional barrier for businesses to overcome; despite many taking advantage of our new ‘remote business world’ by onboarding more and more people from across the globe, they are also now having to review employment legislation and regulation through an international lens, which can lead to further complications in an already challenging space.

We did however also discuss some of the positive changes that are helping businesses to become more ethical in their working practices. Our panel delved deeper into the difference that offering a living wage, as opposed to the minimum wage, can make to attracting and retaining talent. The group also explored the importance of hiring a diverse workforce in order to create an employee base that is able to consider all elements of the business from varying perspectives. It was firmly believed that this type of approach should aid the creation of a more ethical working environment all around.

Ultimately, the key message that emerged on this theme was that although companies such as Deliveroo are very different in scale to many of the companies that we look at as part of angel networks, their obligation to staff is the same; regardless of whether a company receives an £8billion valuation or a £500,000 valuation, ethical practices should be at their core. If businesses are unable to recognise the importance of this, then it’s going to become much more difficult for them to scale.

Can social media be used to nurture relationships?

Next up was a discussion around the use of social media for businesses; we touched on which channels our angels found to be most effective, as well as their frequency of use and the potential negatives aspects of platforms such as Facebook, LinkedIn and Twitter.

One of the angel networks that joined us for the event explained that they commenced their operations as the first lockdown hit the UK. This meant that social media was one of the only tools that they were able to utilise in order to communicate with their audience of angel investors. They explained that this initial setback has since worked in their favour in that it has allowed them to become a leader in the way that social media is being used across their industry.

It was widely agreed that although differing social media channels have a varying success rate at reaching their desired audiences, LinkedIn was most favourable for reaching out and directly connecting with investors. Almost all of our angels reported having successful and engaging conversations through this platform.

A pertinent point was raised around how, all too often, the focus is on the importance of utilising the right platforms; in reality, the key to successfully engaging through social media for any business is the relevancy of its content and messaging. Although there is some merit in shouting about all of your business successes, it is far more important to ensure that your posts contain a real value for your audience. Our panel found that publicising information around how you have, and are able to, provide real help and support to customers was far more lucrative than constant self-promotion. All agreed that investors must be wary of constantly celebrating their own success and instead look to showcase achievements that their portfolio companies have had instead.

How to build a niche online/offline brand

To round off our event, we discussed how to successfully build a brand if you’re very early on in the business setup process vs. maintaining your brand if you’re a more established business.

All of our panellists agreed that collaboration is key with investors when it comes to building a brand. Any form of networking and event opportunities are a great way of getting your brand out there, however, this is of course is a challenge at the moment due to the pandemic. 12 months ago it would have been completely unheard of for angel networks to be onboarding new founders completely digitally, but now this is a situation that is happening regularly and successfully, highlighting how important it is to both be flexible and have a good digital setup.

Having said this though, some of our panellists explained that the pandemic has not, and likely will not, completely wipe out physical interaction and connection. We heard about how the stereotypical tradition of ‘deals being done on the golf course’ is still very much in full swing now that restrictions have begun to ease, and so it’s just as important that employees are ensuring that they’re always portraying the brand in its best light both on and offline.

In reality, despite tradition dictating that brand building is often all about dazzling clients through expensive networking opportunities when it comes down to it, it’s really about putting forward quality offerings to clients. In today’s world, many investors tend to be very hands-on in the early development stages of a company and want to offer real, tangible support which will serve them well in the long term.

If you would like to find out how our technology can benefit angel networks, please read our UKBAA client story and discover how our technology helped to build co-investment relationships within the private markets space.