Angel Investing - My Playwaze Experience

I'm a member of a local angel investment group known as the S100 Club. It's part of SETsquared, the world's largest university incubator network. We meet every other month to see half a dozen pitches from businesses seeking funding in the £200k-£1m bracket. Banks won't lend to high risk start-ups, and investment funds tend to only be interested in established companies needing upwards of £2m to accelerate their already proven potential for growth. So angels are a vital source of funding between Family, Friends and Fools risking their savings and mortgages on their homes, and the larger, more risk-averse venture funds.

About 2 years ago the club had a pitch from a company which was then called Playcaddy. Basically it was a website that managed sports activities like leagues, competitions, teams and other group events for clubs. Impressively their system was already being used by several high profile clubs, especially tennis (the founder is a keen player who built the system to solve a need at his own club). Its business plan was to earn money from advertising. The trouble was, until they had enough users, advertisers wouldn't be interested - and they needed to spend a huge amount to get enough clubs to start using their system before they could start earning. The numbers simply didn't stack up - even though the system evidently was useful and well liked.

I liked the founder and appreciated the effort that had gone into his product, but I wasn't prepared to invest and declared myself "out". None of the other angels were tempted either, so the founder departed to think again.

A couple of months later I was contacted by the SETsquared incubator at Surrey University to find out if I would be prepared to become the company's mentor. At first I resisted on the grounds that I didn't believe its business model would work. But I agreed to have a meeting with the founder to explore more deeply what he'd created and where it might go.

I have quite a long history of creating companies providing what's known as Software-as-a-Service (SaaS - also known these days as Cloud enterprises). I could see that what they had created solved a problem. Arranging sporting activities typically involves copious volumes of texts and emails, excel spreadsheets, printouts on noticeboards, and plain old phone calls to inform people that the activity was happening, to find out who wanted to play, and then to get the right people to appear at the right place at the right time. And finally, assuming it hadn't been postponed with all participants being informed in good time, for the result to be posted somewhere. A few tech-savvy organisers might use Whatsapp or perhaps Facebook to do some of the admin, but nothing existed to do everything that was required, quickly and easily.

So Rupert, the founder, and I met at my local pub for a chat. After a couple of hours I made him a proposal. If he was prepared to evolve his product onto a mobile platform, change the business model to focus on National Governing Bodies (NGBs) for sports, and change its name to a generic for all sport rather than appearing to be aimed just at golf, then I might be prepared to invest and become a Non-Executive Director. We danced around the table a bit over the deal, and eventually shook hands.

It didn't take long for Rupert to use my money to get his team to convert the system to work on smartphones. It was an obvious step, so his developers found many tools that had been designed for that purpose. It also wasn't hard to start talking to a wide variety of NGBs. Despite not earning much money, the system already had thousands of happy users within many sports clubs who were prepared to recommend the product to their NGB for consideration.
We also changed the name of the company to Playwaze, and I managed to encourage several of my angel friends to join me for the ride as investors.

The stage was set and the order-book started to swell. New staff were recruited and one of them had a close contact who was working for British Universities and Colleges Sport. BUCS organise all inter-university sport competition throughout the UK. Around 170 institutions represented by nearly 6,000 teams, playing 50 sports needs a lot of organising, and their original system was showing its age. What they needed was Playwaze, and in the summer of 2018, a 5-year deal was signed... not only to manage all BUCS activities in the UK, but also to manage the London Youth Games involving some 300,000 school-age kids throughout London's 33 boroughs.

But this is just the start. The system is already enabled to take payments for things such as subscriptions, match fees, coaching, kit sales etc. No longer will club secretaries, captains and coaches have to mess around with small change, worrying about who still needs to pay, and having to bank and account for cash and cheques. Playwaze handles it all simply and securely. It's part of a new wave of Social Payments hitting the Cloud world and scaring the banks... but the big difference in Playwaze's case, is that it not only includes HOW to make payments between trusting parties, it also includes WHY those payments need to be made. Eat your heart out Paypal, Facebook, Google and Amazon.

And then, finally, there's advertising. No longer having the Catch22 of not enough users to interest advertisers, Playwaze is destined to have millions of highly targetable sports players - especially the key target market for sport brands, young ones. But I have agreed with the company, that however we provide marketing opportunities for businesses keen to make offers to sports enthusiasts, it must always be of clear advantage to the user - never annoying, and never preventing a seamless, enjoyable experience of using the app.

To convert a business from a 'nice try' to a 'massive success' takes enormous dedication and pure sweat. But it also takes experience to help point it in a more promising direction. Rupert and his team have worked their socks off to achieve the creation of probably the world's most sophisticated sports activity management system, and I'm fortunate that I was able to make a contribution to their success.

The company now has the realistic ambition to be the only app used by every young person in the UK for all their sport activity - and other countries in due course. The future health of every developed nation depends massively on encouraging young people to explore and become addicted to sport. "Sedentary is the new smoking". Playwaze is perfectly positioned to alert young people about sports that might interest them, encourage them to have a go - along with their mates, develop their enthusiasm, and sustain their involvement throughout their (extended) lives. What started as a tiny business solving a paper and email hell for a tennis club, is on the way to providing a solution for one of the world's biggest problems.

Playwaze is turning into one of my more successful investments. Just how many millions I'm going to make out of it is too soon to know, but it's well on the road to making up for some of my less successful investments and entrepreneurial ideas that litter the URL banks of the world. Angeling is not just about writing a cheque and crossing your fingers for a few years. It's about supporting the founders and management team in as many ways as you can, and especially to help them develop a sensible vision based as far as possible on your own experiences and connections. Most of all, it's interesting, exciting and fun (right up until they ask you for more money...).