Jonathan Fitchew is one of the North West鈥檚 best known entrepreneurs.
He made his name 鈥� and his money 鈥� as one half of Pareto Law before leaving after the death of his co-founder and good friend Andy Sawer.
The 61-year-old is now the聽group CEO of Apprentify Group, which recently acquired聽digital marketing apprenticeship provider, The Juice Academy.
His other business interests include Netcom Training; Venn Digital and Next Connex but he鈥檚 also one of the growing number of angel investors.
An angel investor is defined as someone who invests their聽own money in a small business in exchange for a minority聽stake.
Fitchew estimates he鈥檚 invested a 鈥榮ignificant six figure sum鈥� in more than 10 businesses over the years and has a few words of advice for anyone thinking about following suit.
鈥淥nly invest if you are absolutely sure you don鈥檛 need that money for anything in the future because the chances are you鈥檙e not going to get it back,鈥� he said.
鈥淭he mindset of an angel investor should be go into things knowing that the price is twice as high as it should be because of the ego of the individual聽聽who has set up the business.
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鈥淭hey always think it鈥檚 the greatest thing on the planet so they have an unrealistic expectation of what it鈥檚 worth.
鈥淭hey have a second unrealistic expectation of what it鈥檚 going to become. If you half the price you pay and double or quadruple the time it takes for the business聽to get anywhere, you might get聽聽one in 10 that work.鈥�
The entrepreneur said some angel investors have described the process as being like a drug.
鈥淚s it a drug?鈥� asked Fitchew. 鈥淪ome people play golf, some people angel invest and some people do both.
鈥淭here are people who get their buzz from going to an angel investing event, having dinner, seeing various presentations, getting involved in a Q&A and getting under the bonnet of someone else鈥檚 business. It鈥檚 exciting.
鈥淚 went to one recently where a fascinating young woman has built this product聽that works out the index of child exploitation in the labour market聽聽in all these various countries around the world. Who would have thought you could turn that into a business but we鈥檙e all bothered by child exploitation. If you鈥檙e entrepreneurial it fascinates your mind.鈥�
Fitchew said one of the biggest mistakes angel investors can make is to throw money at too many things.
鈥淚 find a lot of business people put all the effort into one business and it makes a great deal of money,鈥� he said.
鈥淭hey lose their head, take that pot of money and invest in the craziest businesses they really shouldn鈥檛 be investing in under the guise of being an angel investor.
鈥淪o many businesses don鈥檛 go anywhere no matter how inspired it is. I think you鈥檝e got to keep to your lane. I always back people rather than the business.
鈥淎ngel investment often gets mixed up with EIS (Enterprise Investment Scheme). EIS tends to be attached to younger businesses and startup businesses. Some mature businesses raise money through EIS.鈥�
Fitchew said the key message from angel investing is that most don鈥檛 work.
鈥淭hings don鈥檛 tend to go the way you want them to,鈥� he explained. 鈥淚 invested in one called Atlantic Healthcare that was delivering聽聽new products for gastro problems that went into administration.
鈥淚 lost about 拢60k but you don鈥檛 lose the whole 拢60k because you get tax relief on the money that went in.鈥�
Fitchew has also invested via peer-to-peer platforms, including in the highly rated what3words.
Co-founded in London in 2013 by Chris Sheldrick, what3words uses a system which covers the entire world in a grid, each section of which has a unique three-word address.
鈥淚 thought it was a fantastic business,鈥� he said. 鈥淒eliveroo can never find my house so I thought it was a great idea. I only invested a few grand.鈥�
He also invested in GoHenry, which is a pre-paid debit card for young people aged between six-18 to help them manage their money.
One of Fitchew鈥檚 favourite investments has been in a dating app called JigTalk, which later rebranded as Jigsaw. It鈥檚 a聽personality-based online dating application whereby the user鈥檚 faces are covered with jigsaw pieces.
鈥淵ou can鈥檛 see their faces until you鈥檝e asked a certain number of questions,鈥� said Fitchew.聽聽鈥淭he idea is that once you鈥檝e asked eight questions it鈥檚 gone beyond what somebody looks like.
鈥淚 really look forward to getting my monthly email updates from the co-founder Alex Durrant.鈥�
Fitchew is also a member of Manchester 老九品茶 Angels.聽鈥淭hat particular group is more interested in tech investing,鈥� explained Fitchew.
He said one option new angels might want to consider to 鈥榮pread the risk鈥� is co-investing with like-minded people.
Fitchew said most people鈥檚 understanding of investing comes from the BBC show Dragons鈥� Den.
鈥淚 think what they鈥檙e聽聽doing is angel investment but for me it鈥檚 a bit of a weird programme,鈥� he said. 鈥淵ou wonder how many of those deals actually get through due diligence and happen but it makes good TV.鈥�
Fitchew has one final piece of advice for wannabe angel investors.
鈥淚f you鈥檙e an entrepreneur the only sure fire way you鈥檝e got in this world聽of protecting yourself聽聽is to do it for yourself,鈥� he said.
鈥淏ut if you鈥檝e got to the stage where you don鈥檛 need to do that, but you still want to be connected, either philanthropically or because you want to make some money, it鈥檚 a great way to be in the startup community. This is the century of the startups after all.鈥�