Finance for Founders

In this episode, I’m thrilled to be joined by Richard Hadler, an Angel Investor, experienced executive and Co-Founder of Founders Capital, an investment community dedicated to helping founders raise investment from other founders and start up experts.

In this conversation, Rich and I explore the world of finance for founders – and understand what investors are looking for in the companies that they invest in.
 
🌟 Some of my favourite parts were:
✅ The financial and non-financial metrics that Rich as an Investor considers before investing;
✅ The role that Founders Capital and its community play in the companies they invest in;
✅ How Angel Investors are evaluating the potential exit strategies in the current market;
✅ Rich talking through how he evaluates the businesses and founders that he invests in;
✅ How best to evaluate a business model and potential at the pre-revenue stage.

Business Book recommendation - 

Allan Leighton - Tough Calls: Making the right decisions in challenging times - https://amzn.eu/d/5XEsG9c

Transcript

Adam (00:02.776)
So today I'm here with Rich Hadler, who is an angel investor and experienced executive and co -founder of Founders Capital, which is an investment community dedicating to helping founders raise investment from other founders and startup experts. Rich, welcome to the Fractional CFO Show. How you doing?

Rich (00:20.462)
Yeah, very well. Thanks for having me.

Adam (00:22.392)
Thank you very much for being here. And today we're going to dive into finance for founders. And our audience consists of some small business owners who are often looking to raise funds. So I thought it'd be interesting to have a conversation with you to help understand what investors are looking for in the companies that they invest in. So Rich, to start, would you mind giving us a bit of an overview of your career so far?

Rich (00:47.982)
Yeah, of course. So many moons ago now, started in hospitality, moved to London and worked in publishing for a number of years, then set up and ran a marketing agency, exited that just over two years ago. Also started a direct to consumer business that got over a million pound in turnover bootstrapped and sold that last year as well.

And subsequently have been angel investing in many different businesses over the last 24 months or so. And alongside that, we launched Founders Capital, which is a group of founders investing in other founders. We deployed over five million pounds last year, mainly in early stage businesses based in Europe. We mainly focus on B2B SaaS companies, but also sprinkled with some consumer businesses in there.

because of our backgrounds. And yeah, really most infused when we're working with founders that are humble, but have got the appetite to make some fantastic businesses and headway in the world of startup land.

Adam (02:01.144)
Excellent, excellent. So lots there I'd love to dive into. And you mentioned that you're typically investing as yourself and as the group at the angel stage. Can you talk about a little bit about the types of businesses that you invest in? You mentioned B2B and SaaS, but could you sort of dive into that a little bit?

Rich (02:19.566)
Yeah, I mean, it is very diverse. So the way that we evaluate businesses first and foremost is on the founder. So we actually don't have an industry specialism per se. We very much look at the founding team and, you know, their elevator or their deck, does it firstly excite us? Do we understand enough about the industry to get under the skin of it? And then finally, is the founder what we would class as an epic founder? We have a...

a methodology for analyzing what our version of an Epic founder may or may not be. And then basically what we have is we have 12 independent experts that we bring in to help us in our due diligence process when we are looking at founders in different industry verticals. And what that allows us to do is it allows us to have a very broad range of portfolio companies and then essentially, you know, not

kind of get bogged down into working in one niche, essentially. So we've invested into an AI litigation platform for lawyers, a wine investing platform. We've invested into a bone broth business, which is a consumer business that's doing extremely well. A buy now, pay later, B2B business, again, that's doing very, very well. And we've invested into one of the most...

high profile messaging platforms in the world and lots of stuff in between as well. So we've probably got about 24 companies in our portfolio and our ticket sizes normally range in pre -seed and seed from about 100 to 150 K all the way up to series A plus, you know, 500 K ish ticket sizes.

Adam (04:10.52)
Excellent, wow, lots going on. That's really interesting and great to have all that diversity in types of company. And tell me, because a lot of our audience won't necessarily be familiar, so familiar with this world, in terms of the sort of what you offer as a group and as an individual, as an angel, how does it work? Do you offer, is it purely financial? Do you offer other benefits, like advice or contacts? How does it typically work?

Rich (04:38.67)
Yeah, well, typically we never lead rounds, right? So we're never the biggest financial check on a cap table. We are basically a group of founders investing in other founders, which founders love because they like the idea of founders that have been there, done it, that are probably still doing it in some instances, understand the difficulties that they face on an ongoing basis. You know, I think there's some stats in VC world where...

Only 15 odd percent of VCs have actually come from an operator founder background, which is pretty crazy really to think they're investing in some of the most high profile startups and trying to put their arm around founders when actually some of them aren't actually experienced enough to do so, certainly in terms of doing the do, if you like. So what we like to be at Founders Capital is firstly a significant chunk of investment because we respect that.

and a lot of different businesses need different things and financial impetus is obviously a very important thing to helping business scale. But we also recognise it's not the only thing. So we're definitely not an overbearing investor. Sometimes we take board seats, sometimes we don't. But we always try to be the first people that the founders will call if they come up to a sticky situation. The way that I would normally, I suppose, describe it to a founder is...

We expect them to send us an update every month, you know, the good, the bad, and the not so great, or even sometimes the ugly. And typically I'd love them to be able to call us ahead of writing those investor updates with the more not so great or the ugly pieces just to help talk it through with them. Because what we see a lot, especially in early stage businesses,

When founders are kind of writing these updates, they get quite worried and wary of sending updates with things that aren't going that well. Well, actually, we all know that running a business isn't all sweetness and roses. So I think that the role that we try to play as founders capital, and certainly myself and my business partner, is we'd like to be the people that they call to kind of sound ideas or just to talk about things that aren't going so well to help them through that.

Adam (06:56.344)
Okay, great. And you mentioned there about how early the stage is that you're investing at. And obviously at that stage, many of the companies, I guess, can be, you know, have very little revenue or no revenue could be pre -revenue. So how do you as an investor evaluate the business model, the revenue generating opportunities if they don't actually have any cash coming in or any clients yet?

Rich (07:18.798)
Yeah, I think, you know, a lot of our investments are after traction phase, you know, and it doesn't have to be much traction. But we have we have invested in some businesses that are pre revenue and that might be because they're really early or they are to some degree in their journey and on that, you know, making turnover isn't even on their roadmap yet. You know, we invested into an alternative investments platform that has been going for 18 months and they need to build.

specific infrastructure and one customer to them is worth tens of millions, right? So every business is unique in that regard. But when businesses obviously don't have, you know, financial traction to kind of look at, it's obviously not great because you really rely on the strength of the founding team, the strength of the idea, and then your experience of the industry and market. But

Everyone should have a financial model and everyone should be able to absolutely articulate the problem that they're solving for their customer and how that will yield commercial return in whatever horizon that they're predicting. What we aren't that infused by is just people plucking numbers out of the sky and showing us crazy hockey sticks without kind of any rhyme nor reason as to how they're going to get there. So you do need to vet that. And you know, other things you can do when businesses haven't got traction, but you know,

they're on their way to having traction is look at precedent set by other businesses in the industry, look at challenges by other businesses in the industry. I'll give an example of we invest into electric bike business and we invested into them, which they're brilliant by the way, it's called Maving, a UK based electric motorbike business, beautiful bikes. We invested into them the week that Van Moof went under and Van Moof obviously, you know,

were kind of back to the high hilt, had a tremendous amount of VC backing and were quite bloated in many regards, but they just never turned a profit. And I think that there were a lot of experiences that we learned from that example of how not to run a business, let's say, that we kind of used in our due diligence process for this business. And it just so happened that it was a very short time between Vanmoof.

Rich (09:39.374)
you know, ceasing to exist in their former capacity and then obviously us investing in maving. So it really depends. And there isn't, you know, I hate to say it because I'm sure your listeners will want something a little bit more concrete than this, but there's not a one size fits all policy essentially.

Adam (09:56.216)
Yeah, of course. Really interesting about VanMoof. I remember going to look at a VanMoof and a Cowboy bike at the same time, about a month before VanMoof went under. And then I bought the Cowboy a month later and I was promptly told that it was a good decision to make given that VanMoof had just gone under. So yeah, opportune moment.

Rich (10:18.51)
Yeah, yeah, yeah, no, indeed. They are beautiful bikes, though.

Adam (10:21.944)
Yeah, they absolutely are. They absolutely are. One question I had off the back of what you said earlier about the your sort of investment experts, your 12 experts who are independent, who come in and help you with the due diligence. You know, based on what you just said about Maving and Van Moof, do they have experience in sort of categories that you're going after? You know, you go to an electric bike expert to look at the electric bike opportunity. You know, how does how do you select?

which of those experts to look at, which opportunities or is it you put every opportunity out to all of them?

Rich (10:57.326)
No, not at all. Like we have some very particular individuals that we will show very particular things. So if you think about it in two ways, really, obviously, there's one which is subject matter expertise, and the other is market expertise, right? So for example, that one, the majority of maving sales were online. So we obviously have online retail specialists and

We didn't know too much about the industry on two wheels in general. So we also got someone in that understood more about the consumer transport landscape as well. So in that regard, we basically get two experts to come and help us. So one that knows more about bikes in general and the consumers that they're targeting. And then another one that understands about the digital marketing and digital retail landscape, as well as also actually speaking

speaking to people about international expansion. So an example with that business in particular is, you know, in order to grow, there needs to be kind of a significant international infrastructure that's built as well. So we also surrounded ourselves with people that understood more around, you know, the things to consider when expanding your business internationally, etc.

Adam (12:20.76)
Yeah, of course. Fascinating. And you mentioned as well about the average ticket size that you're investing in. I think you said 150 ,000 up to Series A or pre -Series A, I think you said it was. When you have that, how does a group like yours achieve that? Because as you say, you're a group of a number of investors. So is it, you'll have a minimum ticket size for each individual investor or how does it work to get you to the 150k?

Rich (12:36.014)
Yeah.

Rich (12:50.798)
Yeah, I mean, every deal is slightly different. Firstly, we see about 250 decks a month and those decks come from just direct through our website, which obviously doesn't have much on it for FCA regulatory reasons, through people, members that are in our community.

And then also just our networks, which are quite extensive in general. And we will review the decks with our internal team here. And then we will choose normally three to five companies that that month we're going to evaluate further and do further due diligence on. And the due diligence process on each of those business will last anywhere between five days and a week. Just obviously to caveat here, we don't lead rounds, right? So the other thing that we are.

using is the diligence and the experience of the VC that has already led the round and priced the round in most instances to help inform our decisions as well, right? It doesn't take an expert to work out that we sometimes gravitate towards the bigger name VCs that have got a lot of firepower to do their due diligence and a very strong track record in certain industries. So it very much depends, but once we've

Done the diligence process, we'll normally choose two deals a month to run through Founders Capital. And then both Hugo and I, my business partner, will personally invest into those businesses. And then we will take a check and we will carve out an allocation purely for Founders Capital. We then create a memo and a comms piece to go out to each of our members. And then our members basically receive.

the memo, any supporting documents like the data room, our comments, and then our due diligence to make their own decisions whether they want to invest or not. So crucially, we aren't a fund. We don't operate like a fund. We operate like an investment syndicate. And we believe it's a very good way to operate for the group of individuals we have because it means that they ultimately have the decision whether they want to participate in deals or not.

Rich (15:04.302)
And crucially founders capital was always set up to enable founders at any stage to be able to invest in great companies that we find. So in order to do that, we've always kept the minimum ticket as low as we possibly can. Now, again, it varies on the deals and the stages, but typically for a preceding seed deal, it's around about two and a half K for a series a deal. It might be 10 K and then we'll pull that investment together.

and basically create one SBV that will sit on the cap table through a nominee structure so everyone still owns their underlying shareholding but it's wrapped up in a nice neat bow from a financial accounting perspective and that's how we pull the capital together. So typically, you know, our average check is probably about 20k but you've got some two and a half k checks in there and you've got some 50k checks in there and that's the...

I don't know whether you could say perils or excitement of running a founder led community. Obviously we have some fractional CXOs and other people that have worked in the startup landscape that also invest through us, but mainly founders is some are really liquid because they've exited. And some aren't so liquid because they're on the way to exiting or they're just a different place in their journey. So it's critically important to us. And it will always be to keep that minimum threshold as low as possible because we want the access.

to be to anyone that wants to participate in these deals. It's really important.

Adam (16:33.336)
Yeah, no, I understand. And I guess it's you get that wisdom of the crowds as well, right? So if you're keeping it as broad as possible, you get, you know, as many people able to access and then as many people able to ask questions and dig around and provide some knowledge and insight, you know, from their different areas of expertise.

Rich (16:52.046)
Yeah, and everyone has a different question, right? You know, people are investing their own personal money. And whilst they trust us to bring them the best opportunities that we see, which is a full -time job in itself on a monthly basis, they want to do their own diligence to make sure that this is the right opportunity for them to invest in. And what is really enthusing to see is different people from different backgrounds ask different questions that maybe we hadn't thought of.

And in that process, we can push that back to the founders and work with the founders to get an answer normally to each of those questions as well. So it is really interesting to see how every individual's mind works depending on where they come from.

Adam (17:35.736)
Yeah, no, absolutely. And one thing you said earlier about your approach to identifying those deals is your Epic founder method. And I appreciate you might not be able to go into every detail, but I'd love to hear what are some of the criteria that you use to sort of invest in that founder.

Rich (17:52.814)
Yeah, well, I mean, firstly, they need to be entrepreneurial, right? And when we first meet them, we need to feel like we understand what they're trying to build and achieve within a very short time of meeting them. Because whilst founders don't have to be effervescent salespeople, you know, on the whole, they definitely need to be able to...

really articulately explain what they do and how they do it and why it's a challenge for their customers, right? And firstly, it's, do they excite us? Are we on our edge of our seat having spoken to them? And again, you know, it doesn't have to be just someone salesy presenting. It needs to be someone that understands their subject matter and crucially understands what their customers are looking for and why they choose their product or service over someone else's, right? So that's the first point. I think...

That goes on to the second piece, which is they really need to understand the market and the nuances in their market and understand the challenges they'll face both growing their business, but also in the fundraising process. You know, I love founders that come armoured with these are the commonly asked questions and I'm going to answer them for you even ahead of you asking them, because I know these are going to crop up, right? But then also humility.

So this isn't actually, I'm not gonna go into the epic framework to the nth degree. I'm just picking out a few things, but you've heard me speak about this previously. I think, you know, the founders that stick out to us are ones that, you know, are quite open about the fact that they don't know everything and they need to surround themselves by different experiences or knowledge. You know, founders that understand where their gaps are and they've already filled those gaps internally with a co -founder or their team members is fantastic.

Adam (19:20.536)
Nah, that's fine. Yeah.

Rich (19:45.134)
or even founders that recognize that actually assembling their board needs to counteract some of the deficiencies that they may have as individuals or just the inexperiences they may have is a really, really good flag for us. Like we really like it when founders kind of highlight areas that they need help with or they need help understanding because it basically shows a level of humility and understanding that they don't know everything and they're willing to kind of...

get help to understand that. Now I would go the next phase is quick learners, right? I think I've always had this throughout my career, which is you don't really need to tell me twice or three times to do something. And that's what we like to see as well. It's not about the first instance of them learning, it's how they've learned from different experiences or different pieces of knowledge and then how they implement that in their business.

you can definitely see the ones that learn extremely quickly because their businesses kind of go from strength to strength pretty quickly as well.

Adam (20:50.712)
Yeah, no, exactly. And just one follow up question on the sort of the way they're filling those gaps. You mentioned it might be a co -founder, it might be team member, it might be board. Is there a preference? Does it depend on the role or is it very much on a case by case?

Rich (21:06.542)
Yeah, well, I think, I think, you know, we tend to think that founders are all just like outward salespeople and commercial leaders and therefore that they need the financial and operational rigour behind them as kind of that linchpin to kind of grow their businesses. And that's not always the case, you know. We've invested into some people that have come from PE backgrounds that are, you know, purely about the numbers and actually need to be guided on the...

the marketing and the branding and the go -to -market and the sales and their powerhouses. Because actually, you know, one of the most important traits of a founder is don't get your numbers, don't let your numbers get away from you, right? And I'm sure we'll get onto that. But I think for me, really, it's about the surrounding yourselves with people that are important to scale your business at that particular time.

And another thing that I think is really important to acknowledge here is we work with businesses at different stages and we like that. So we don't specialize in pre -seed or seed or series A or anything like that. We recognize that different businesses have different needs at different times. Sometimes founders get caught into this trap where they think that they are on a linear trajectory and they need to hire certain people at certain times. A lot think they need to hire a sales leader after they raise their pre -seed.

or they need to hire a CFO before they go through their series A, right? They're kind of the typical milestones in terms of hiring. I would always critically, I would always make sure that founders critically evaluate what they actually need to get to that next stage of their company life cycle, because often it's too early for that salesperson and it's too late for that kind of CFO type.

Um, and I think that, um, again, you know, this isn't a huge challenge because I understand why founders think that, and they're in a way the VC world has trained them to think that because there's kind of like gateposts you have to, you have to achieve, but there's a lot of times where pre -seed businesses obviously still haven't reached anywhere near product market fit. Why would you go and hire a hundred K head of sales to take that to market when actually you haven't figured out all of the...

Rich (23:31.79)
the nuances and the issues as the founder yourself. And therefore, if you don't know it and you know the business more than anyone else, why are you bringing someone else to figure it out? It should be your job. And I'm not just going to narrow down on sales, but it is a common trait of a lot of early stage founders where they think that's the most important thing to get right. And actually, sometimes as our PE backed founders have taught us,

The most important things to get right are sometimes the back end housekeeping to make sure the wheels aren't going to fall off once you can get to scale, whether that be on a supply chain perspective or a sales perspective, because there's nothing worse than investing into a business that can't cope with the demand. I tell you that, that's happened a few times. So that's also something that, you know, could be a learning. I don't know if that answers your question, Adam.

Adam (24:21.24)
Yeah, no, it does. It does. But lots of interesting stuff there. And you touched on one topic that's close to my heart, as you can imagine, which is about the numbers getting away from you. And I'd just be interested to understand a little bit about what are some of those financial metrics that you keep an eye on as an investor each month? Is it purely cash? Do you look at revenue? Do you look at, you know, what are the metrics that are sort of front and center for you from a financial point of view?

Rich (24:51.918)
Well, I mean, before we get into metrics, it's how far in advance is the founder operating? Typically, a lot of founders have a short -term horizon for whatever reason. Maybe they don't have much runway or they've increased their burn to such an extent they've got a lot less runway, which often happens. They should be operating six, nine, 12 months in advance. Absolutely, right? Because...

this month on month outlook is not good for anyone. It's certainly not good for a business that's got large ambitions to scale going forwards. But the typical things we look at are different in different types of businesses at different stages. And I'm sorry to say again, you know, it doesn't answer your question really, but in an e -commerce business, it's about how much it costs to acquire customers and what's their burn rate. And obviously,

how much cash, and then with e -comm or consumer businesses, you've got the issue of holding stock, how much money is tied up in stock, how quickly can that stock move, all of the KPIs that are associated with that. And I wouldn't say it's about one particular KPI, but I would definitely say it's about how much the founder understands those KPIs and can reel them off. It's quite cliche, but...

You know, you watch Dragon's Den and there's a lot of problems with that show in terms of valuations or investments, whatever. But one of the things that is quite interesting about it is the questions they ask and the responses they expect. Like as an investor, you expect like very quick responses to when you ask questions around KPIs because founders, no matter, you know, technical, non -technical, they need to be very much on top of the key KPIs that are impactful for their business.

But B2B businesses are obviously very different to consumer businesses, et cetera. But top line revenue, is it growing in the right way? I don't care about hockey sticks. Are your customers happy? Are they staying with you if it's a B2B business? If they're not staying with you, what does that look like if the trajectory?

Rich (27:02.926)
continues, you know, your turnover might be going up, but if your burn rates and churn is high, then what's the point in doing what you're doing as well? So there's many different things. Cash is less of a, obviously we're looking at runway, but it's less of an issue if the business is hitting all of the right metrics. Obviously now there's a much greater scrutiny over when the business will reach profitability.

than there ever was before, which I think is totally right. I also think that there's less of a clamor to back businesses at silly valuations now, not just because there's less liquidity in the market, but also because businesses weren't ready because they had no real proof of how they got to profitability. So I think any KPIs that can indicate the speed of which the business can get to profitability.

and the margins that the business is operating with, the better. I would far rather back a business that's going to take two or three years longer to scale to heady turnover height if I knew that that was a very safe business from a profitability perspective, more quickly than other investments now rather than ever before.

Adam (28:20.792)
Okay, great. And lots there. And obviously, as you say, it's very much, you know, we could do 10 podcasts on the metrics around startups and what we need to be tracking. So mindful of that. But one of the points you made there about sort of the level of transparency that you're expecting from the founder of the business, you know, as you said yourself, a lot of founders might not have that financial literacy as their background. Some might be PE, some might be from a...

a product background or some might be completely just passionate about solving that problem and not a business person. So how would you advise those founders to sort of get through and navigate, particularly the early days when that financial understanding is not perhaps second nature to them.

Rich (29:09.774)
Well if a founder is fundraising it doesn't take long to work out what they need to know. This is your answer. You know, they'll get asked similar questions by investors and if they don't know it they will very quickly try to find the answers. I think for me, the reason why I'm very enthused about fractional roles in general is you get access to someone like you that's got a lot of experience around a subject matter or a topic or...

a certain type of business, but you don't have to pay a full -time wage for it. So my instinct would also be to make sure that you're surrounding yourself with advisors either on a maybe even an equity share capacity or fractional CXOs paying a fraction of the cost.

that you would pay or you would never get access to them in early stage businesses, right? So I think surround yourselves with people that understand the industry. I would speak to M &A advisors in the industry you operate because they know what a great business should look like. They're obviously extremely close to it. And make sure that your advisory team in general is packed full of seasoned professionals that have been there, done it, got the t -shirt in your industry or subject matter. And don't be afraid to...

to give up a bit of equity in the business if the people are right, obviously with the right investing schedules, etc.

Adam (30:35.8)
Okay, great. It's a really good advice there. And I guess final question on this area is just around, because we've talked about investing, talked a little bit about the information that you're getting through the course of your investment, but in terms of exiting, how does an angel investor typically look at getting their return in the context of the angel landscape that they're investing in?

Rich (31:01.998)
It's been a fun couple of years in terms of exits, right? I think over the last couple of years there's not been much activity at the top of the tree which has filtered down into activity at every stage.

This year also we're gonna see a lot more M &A activity, you're gonna see a lot more mergers because businesses may be raised when they shouldn't have raised or they raised at too high a valuation, they haven't been able to hit the targets they were hitting. And there's gonna be a lot of really good success stories because that's what happens in cycles. But I think from an exit perspective, if you're an angel, there are multiple ways that you can garner liquidity again.

whether you would want to or not is a different scenario, right? Because typically, you know, your angel investors invest in a very diverse or they try, I would if I wasn't angel investing, which I am, but so my portfolio is as diverse as it possibly can be across a number of businesses, because I believe the best way to

get the best possible returns is sticking the same size check in a number of different businesses, no matter how hot I am on those companies. The point there is, is that...

There have been companies that I've been convinced that they're kind of, you know, shooting to the stars. Um, and there have been companies that I want to invest in, but you know, I'm less infused by, if you like, but I've learned to keep, to put the same check in both of those businesses because I think personally, and everyone has different opinions on that. That is the best way to build a.

Rich (32:41.262)
very sustainable angel portfolio. Now in terms of getting liquidity, you have to recognise as an angel that it's not the same as investing into the private market or putting it into easy to access Isis or anything like that. The returns are potentially exponential, but you are tying your money up for a period of time.

And the earlier you're investing, the longer that you're tying that up. Obviously, that's why the incentive schemes exist from the government, because, you know, it's a lot more palatable to invest in early stage businesses with the IS and SEIS than it was before. Firstly, because of the risk, but secondly, because of the tying up the liquidity. To answer your question, in terms of how people would get the liquidity if they needed to,

Adam (33:07.926)
Mm -hmm.

Rich (33:27.438)
Well, firstly, if the business is doing really well and raising other rounds, if there's potential in the market and appetite in the market, there's probably a secondary market that you can access and sell your shares through, maybe at a slight discount versus the latest raise. But it really depends on the circumstance. So you've got the secondaries, you've got certain stages of raise.

There will be scenarios where bigger VCs or PE companies come in and they want to mop up the smaller shareholders and then you might have an option to sell through secondaries in that regard. Obviously a venture IPO, which a lot of people will hope for is a way to garner liquidity. But you have to be prepared when investing in early stage startups to tie your money up for quite a while. And there will be, if you get the right portfolio, you will have two or three absolute

outliers and that will hopefully return everything you've invested and some but you need to understand and recognize that there's going to be a lot of...

things in there that might wither and die as you hadn't hoped to. But that's why I think having a diverse portfolio is very, very important and keeping those check sizes the same is quite important. And only carve out the amount that you're prepared to invest, right? Like a lot of people that I speak to that are starting their angel investing journey, one of their questions is proportionally, how much should I allocate to angel investing? And that's difficult for me to say, right? Because...

Um, uh, I don't know their financial circumstance, but I would never advise someone to overstretch themselves. And this should be a part of your investing, uh, portfolio, right? Like, um, sensible, uh, investors or wealth managers will advise you to put it in bricks and mortar, fit on the stock market in ISIS, you know, in different things. Imagine this as a piece of that pie, right? Like, uh, your angel in, depending on your risk appetite, you shouldn't.

Rich (35:31.15)
really put any more than 20 % of your overall net worth probably in early stage angel investing. And for some people that might even be too much as well. So it depends on individual circumstances, but it needs to be considered as an addition to what you're already doing rather instead of I would suggest.

Adam (35:48.44)
Yeah, no, absolutely. Great advice. Great advice there in terms of diversification, both in terms of your portfolio and then in terms of where you're investing your your assets more broadly. Brilliant. Well, thank you very much, Rich. And now just moving on to what I'm calling our business book bonus section, where we're asking our guests to provide us with a recommendation for the audience of a business book or other type of business content that's really helped them during their business career. And they'd like to recommend to the audience.

Rich (35:49.454)
So basically be prepared to lose it.

Adam (36:18.264)
So Rich, what business book or other content would you like to recommend?

Rich (36:22.606)
Apart from marketing the bottom line by Richard Adler. Apart from that. No, I can't. I can't. Alan Layton, tough calls. Alan Layton was former CEO of Royal Mail, Savorsky and Hasda, I believe. Turnaround King makes very hard decisions feel very easy. The book is extremely well written.

Adam (36:25.144)
You can recommend that, I'll give you that one. Give me one more.

Rich (36:51.822)
It's just a very, very good read for anyone at any stage of business that's in a role where they have to make tough calls.

Adam (37:00.408)
Excellent, excellent, great. Well, we'll put a link to that in the show notes. Thank you for that. And is there anything you'd like to say that we haven't covered before we wrap up, Rich?

Rich (37:09.742)
I don't think so. I think it's been a great chat. I mean, is there anything you'd like to, anything else you would like to hit on for me?

Adam (37:16.952)
No, no, I think that's really good. I mean, as I say, there's, there's lots there and you know, we're perhaps if people wanted to find out more about Founders Capital, more about you, where could they, where could they find you?

Rich (37:26.894)
Yeah, say I'm not a massive social media guy, but obviously I'm on LinkedIn and you can find me pretty easily. Also founderscapital .com if you want to sign up to receive our deal flow, it's free. Obviously over time we'd like people to actively participate in the deals and ask questions and discussions, et cetera. But you can found it at founders -capital .com and lovely to have a chat with anyone that's keen to know more.

Adam (37:53.804)
Excellent, excellent. Well thank you very much Rich, thanks for joining me on the Fractional CFO show and really appreciate your insight, your perspective and your time. Thank you.

Rich (38:01.87)
Thanks Adam.