The Surrey version of Silicon Valley: An interview with Peter Hornsby, the new Chair of the S100 Club

22nd April 2021

1. What brought you to the S100 Club? Tell us a bit about you and your career.

I was born and bred in Southampton, went to Grammar School there and then to Warwick University to study maths. There are two sorts of mathematicians: proper ones, and ones who can’t keep up. I was in the latter category, so I spent my final year studying for a computing degree. They thought then that there was only a year’s worth of material to teach in computing!

After University I was lucky to get a job with Logica, one of the UK’s first software houses. I volunteered to go abroad for a couple of years and worked for the European Space Agency which was great fun. On my return, a chance meeting with an old colleague from Logica led to us forming a software house, Syntek, in London.

We worked for interesting customers, mainly on communications projects and innovative financial work around the time of the city’s ‘big bang’ doing very well with the early corporate adopters of PCs, where in-house IT teams had not yet skilled up. We successfully exited the business in the late 80s, at the point that we decided was the right time to go. I found myself at the beginning of the 90s quite comfortably off but not knowing what to do with myself. I’d dabbled in property investment which was bad timing just then.

I decided to get back to software so formed another company with an ex-colleague of mine from Syntek. My partner was the sensible one who managed the finances and enabled me to be more adventurous. It’s so important to find the right partner with the right complimentary skillset.  Our first customer was Carphone Warehouse, then a small company with only six branches. How things changed! We worked together for 24 years and exited in 2016, so I’ve been through the software business start-up, growth and sales process twice.

I’ve always loved the software world. I was very lucky to be in on it during its early days. I now want to use my experience with software to put something back into the industry, by way of investing in start-ups. For me that’s the attraction of investing.

I’m amazed at the infrastructure behind the S100 Club, the SETsquared organisation and the company incubation process. I had spent a year in the States, pre-Silicon Valley and very much at the beginning of the venture capital scene. I realised then, and have been aware since, just how powerful the combination of education, technology and entrepreneurship is. And that is what you have at the S100 Club working with the University of Surrey and SETsquared.

2. What gave you the confidence to start a business?

Primarily, my early grounding in the software industry. I had confidence my field of knowledge, and that this would be a growing market. We soon realised that the other important thing was to recruit and hold onto good people. They were the most important factors for success.  So, one of the first rules we learnt was to try to recruit people who were better than we were! Growing and exiting the first business strengthened my confidence in the sector, and as I had been successful with the first company, I knew that I could do it again.

 

3. What was appealing about joining and then becoming Chair of the S100 Club?

I think back to the powerful ecosystems in the States based on collaboration between education, technology and entrepreneurship and see the same opportunities and potential in the UK. I would love to use my experience and expertise to help maximise the current potential of the S100 Club for the Angel investors and the businesses. S100 has very good Angel investors and a stream of companies looking for Angel funding. Working with SETsquared Surrey, these companies come to the S100 Club pre-qualified, so the S100 Club Angel investors essentially get ‘first dibs’ on lots of great stuff. For the companies who don’t necessarily want to sell their souls to a venture capitalist, the S100 Club is ideal.

The job here is to utilise the investment skills we’ve got. Keith Dixon, one of the SETsquared Surrey entrepreneurs in residence, has pointed out that there tends to be different classes of investors. There are investors looking for a specific investment so that they can get very involved. Then there are others who want to have a much more general portfolio of investments, because they realise that they’ve got to spread the risk.

I’ve been impressed with the way that SETsquared Surrey supports the companies and brings them through to the point of pitching to the Angel investors.

 

4. How easy has your journey been?

For my businesses it wasn’t too bad. I was involved in professional services, which involves selling time and requires less capital. It’s much harder and anxiety inducing if you’re having to invest in product development. The most successful companies are those that already have a good group of customers.

 

5. What have been some of your biggest learnings as an entrepreneur?

Be customer focused but don’t get too caught up in the individual business needs of your customer companies. Keep focused on your business goals. Keep an eye on your debtors. Constantly focus on your staff. Have an open-door policy and take the time to invest in people.

 

6. What are the benefits of the S100 Club for investors?

There are significant benefits. By investing, they stand a chance of making significant returns, but they do have to be there to take the risk.

The process of taking on investors is good. The investors must be high net worth individuals who don’t mind having a small amount of risk capital on various small amounts in their overall portfolio. Some of the investors who want to get more involved with businesses have the opportunity to tutor and mentor. As a group, people are more powerful. The investors can share information and work together. The investors have a whole range of expertise and can guide each other.

For some investors there is a gap. It might be too risky to make large investments in one company and they may not want to commit funding to a wealth manager who is just going to put it into funding a range of companies that they have no connection with. If you want a little bit more direct access and control, the S100 Club gives you that space. It’s the space between someone else doing the investing for you and getting tied up in a large investment club. The S100 club affords the ability to get involved and invest in specific businesses but there is that element of flexibility and choice in terms of levels of financial and time commitment.

 

7. Is there an average persona of an investor?

There’s two. There’s the first group who have held senior roles and been captains of industry, amassing a certain amount of wealth. They now have time and want to make small investments, possibly being more in control and actively involved.

And then there’s the other group, the self-made entrepreneurs with expertise in a particular area who just like being in the start-up, scale-up environment rather than the corporate scene.

 

8. Are there particular benefits of the S100 Club for the entrepreneurs? Would you differentiate it from other similar investment clubs?

Yes, I think the key benefit is that it’s a fantastic entry level vehicle for would-be entrepreneurs. It’s entrepreneurs’ finishing school.

The actual pitch preparation process to pitch to the Angels is exactly the same as applying for the innovation funding. I’ve seen a few of the SETsquared Surrey companies apply for innovation funding, and it’s amazing how many of them achieve it.

The Angel Investors especially like the businesses in the incubator, and any opportunity that we see, we definitely advertise it. We will encourage them to apply and we will provide support.

 

9. Do you think timing is important when starting a business?

Yes, timing is crucial. The pandemic has thrown up great examples of this. There are many businesses struggling now, however there are start-ups and pivot businesses, packaging companies for example, who have seized opportunities created by the pandemic.

 

10. So, looking forward and thinking about post-Brexit and post-pandemic, what does the future look like?

The future is filled with opportunities for investors and for start-ups. Having the antenna to see the opportunities, not being slaves to the existing status quo and embracing ‘pivotability’ will be key.

11. Is ESG (environmental, social and governance) important to Angel investors?

Angel investors consider it. It should be more like a hygiene process for a start-up. Keep an eye on your policies. It doesn’t have to be difficult incorporating solid HR policies, encouraging diversity, fair and equal treatment of staff and obtaining recognised ISO and environmental standards, especially in the start-up phase. The latter in particular are real hygiene factors when bidding in the government sector.

For more information, please visit www.surrey100club.co.uk.