Strong Opinions, Weakly Held: A Lifetime of Learning by Peter Cowley

Before Peter Cowley died after his battle with cancer, he asked me to keep an eye on his Wikipedia entry, which I do for example updating about the European Business Angels Network Invested Investor Peter Cowley Award.

Some of Peter’s content has gone offline. I am republishing some here to keep them available and reach a wider audience.

Richard Lucas
May 2026

Strong Opinions, Weakly Held: A Lifetime of Learning

By Peter Cowley | June 2022

So what have I learnt since writing The Invested Investor book nearly five years ago?

I’ve spoken to hundreds more entrepreneurs and investors, invested in 15 new start-ups, and invested in a further 20 follow-on rounds. In addition, over that period I have had ten positive exits and nine failures—a very good (perhaps lucky?) ratio.

I stopped investing in new start-ups from late 2020, except when I knew the founders already, and I continued following on in my portfolio until mid-2021—14 years after my first investment in mid-2007 in EPT Computing, which exited after 2.5 years for a 10+ multiple and perhaps gave me too much hope.

This article is almost identical to a new chapter written for the third edition of The Invested Investor, but it can be read without having read the book. A gentle warning that if you have read and memorized the book, you will see a little overlap in places.

You may ask why this article is entitled "Strong opinions, weakly held," a quote which was first attributed to Bob Johansen at the Palo Alto Institute for the Future, and which I have used as my WhatsApp status for many years. This is because I believe that one needs opinions to make investments and to build a personal brand, but that intransigence is a negative character trait.

For instance, I used to be pretty negative about blockchain, partly because of the association with crypto-currencies and partly because a well-designed tamper-evident database offers similar functionality. But I have now come to the view that blockchain has uses in some verticals and circumstances.

However, I am unlikely to change my opinion about crypto-currencies, which are commonly used for pure asset speculation and transfer of currency under the radar of regulators. And of course, Non-fungible Tokens (NFTs) seem to be evaporating even faster than Initial Coin Offerings (ICOs). I listen and learn from the many people I meet, alter my views, and am happy to share that I have changed my opinion.

Angel investing is an art, not a science.

The Challenge with Angel Investment Data

It is almost impossible to find reliable data on angel portfolios for a number of reasons:

Anonymity: Almost all angel investors are unwilling to share their data, and even if they do, some have a tendency to report successes but ignore failures.
Survey Fatigue: Angel groups and trade bodies find that their members are unwilling to answer surveys. While it’s true that a group will necessarily have data on investments if they have a carry (profit share) arrangement, in practice this is quite rare.
Fund Opacity: If the investments are through a fund—for instance, a VCT—then that data will be available but it will still only rarely be publicised.
Tax Authority Gaps: Another source of data would be the UK tax authority, HMRC. Whilst HMRC has some data, I believe that a positive exit using (S)EIS with no Capital Gains Tax to pay does not need reporting. This means that HMRC will have visibility of (S)EIS investments and failures, but only a proportion of successes.
Media Bias: Lastly, the media generally tends to report successes, but very rarely failures.

However, like Richard Hargreaves in his book Business Angel Investing, I have published all my results—failures as well as successes.

I made my first angel investment in summer 2007 and stopped in summer 2021. Because the sort of start-ups I fund take eight to twelve years to reach a good exit, I will be approaching 80 when almost all will have failed or succeeded in terms of my investments being liquidated.

By the Numbers: Performance Metrics

Financial Metrics (as of June 2022)

Total number of investments: 76
Number of investment rounds: 172
Average number of new investments/year: 5.4
Average number of investment rounds where I participated/year: 12.2
Average rounds per investment: 2.26 (I advocate 2 to 3 in total per company)
Average multiple of total invested divided by initial investment: 2.56
Successes where I made a positive return: 15 (Of which two were less than 1X, but that’s still better than a failure)
Failures: 17
Performance on successful exits:
- Annual rate of return from 14% to 152% with a mean and median of around 50%
- Multiple from 1.4X to 107X with a median of 3.2X and mean of 12X
Blended multiple on all successes: 7.4X
Blended multiple including failures: 4.3X
Single-round outcomes: 5 of my successful exits and 4 of my failures had only one round of funding, illustrating the adage that if a start-up is going to fail, it’s probably best for it to fail fast.
Total cash out divided by total invested: 2.06X, with 44 investments still alive. The effect of UK tax reliefs increases this from 2.06X to around 2.5X.
TVPI (Total Value to Paid In): 4.4X with the possibility of over 5X with tax reliefs—but beware: this is dreamland stuff.
Tax reliefs: In the UK, (S)EIS tax reliefs are sometimes regarded as generous. In my case, as I have often invested within 3 years from an exit and invest in non-EIS shares, my overall tax benefit is around 15-20% uplift.

Non-Financial Metrics

Served as a board member of 17 start-ups (plus another 24 of own companies/charities)
Experienced 21 down-rounds, including one that was 60X
Worked with 150+ founders, of which 10 founders have left voluntarily and 24 involuntarily
Led 31 investment rounds
23 of my portfolio have had at least three profitable months in their history (which of course leaves 53 that have not!)
Co-invested with about 28 VCs into 38 companies
Co-invested with seven Corporate VCs
Co-invested with the Angel CoFund seven times

Timing and Timelines

The average time from the point of first contact to close has been 5.2 months.

Failures: The shortest time from first investment to failure was five months—a great learning experience! The maximum time from first investment to failure was over ten years, resulting in a median of four years and a mean of approximately five years.
Successes: The shortest time to a successful exit was 15 months (with a great internal rate of return (IRR), but a poor multiple), while the longest time was 9 years and 3 months. The median of this metric is just under four years and the mean 5.5 years.

What Have I Learned in 15 Years?

People, People, People

To get the most out of being an invested investor, you should enjoy the start-up journeys you join. Enjoyment always revolves around people—as does success. I continue to advocate an approach where as an investor you back a team, rather than a technology or a market—people with a plan, rather than a plan with people. The best founding teams are made up of two or three people, but be wary of situations where the people concerned are in an emotional relationship. Entrepreneurs must be able to listen—what the Americans call "being coachable"—and be truthful, and they should be prepared to "walk through walls" or "find the hidden door."

In the same way, always choose your co-investors with care. You are going on a journey together, sharing risk and workload. The core requirements of trust and transparency apply as much to your co-investors as to your entrepreneurs.

Numbers, Numbers, Numbers

You’ve found your people. The next step is to invest early and be prepared to write off the investment as soon as it is made. Seventy-five percent of your investments will likely fail, so any return is better than none. Once you’ve invested, add value by offering your skills and experience.

When building your portfolio, remember that it is a numbers game. In my experience, the magic portfolio numbers are 15, 25, 45, and 90:

15 is the number of investments where you can keep in close contact with the companies.
25 is the recommended minimum number of investments before you get the benefits of diversification and portfolio theory. Data shows that with 20 to 25 companies, you have a pretty good chance of at least getting your money back.
45 investments or above becomes quite onerous to keep up with everything.
90 investments is the theoretical point where there is a good chance (not a guarantee!) of securing a massive 100x exit.

But before we get carried away with three-digit multiple exits, let’s remember that three-quarters of investments will fail, and most failures are caused by a lack of equity before break-even or a forced exit.

Form a strategy based on your own investment criteria, refine it, and stick to it.

It is easier to get divorced (in most countries) than sell illiquid angel shares!

My Failures and What I Have Learned

Most of my failures were caused by an inability of the company concerned to find product-market fit, usually for one of the following reasons:

The technology never worked well enough for the product to take off.
The market was not accessible—perhaps the CAC (Customer Acquisition Cost) was too high or the value chain was too difficult to navigate.
The product was ahead of its time, where the cost of educating the market was simply too great for the start-up to bear.
Poor unit economics, meaning the price the market would bear was not high enough for profitability. This is common in hardware, where it takes time and equity to lower manufacturing costs through scale.
Competitive pressure (though this was less common).

In all of these cases, more equity capital was needed, but investors did not have enough faith in the founders. These situations lead to one of three outcomes: a reduction of overheads to reach break-even, a forced exit, or a closure.

Case Study: Captive Media

An example of a start-up that was ahead of its time was a company I invested in called Captive Media. They installed interactive advertising screens in men's public restrooms, controlled by a stream of "warm liquid."

Time and cash were spent educating the multiple stakeholders between brands and consumers. Despite building a 100+ portfolio of venues, Digital Out of Home (DOOH) advertising was not widely recognized as a medium by the industry at the time. It was also subscale. As a result, investors stopped funding, exit options failed, and the project ended in a well-run, solvent closure.

"The most valuable thing you can make is a mistake—you can’t learn anything from being perfect." — Adam Osborne

My Exits and What I Have Learned

All positive exits are good news, even if they don’t return all the cash invested. However, it is less common that the exit value exceeds the founders’ dreams.

Shortly before the coronavirus pandemic, I had two good exits with the exact same enterprise value:

Company A consisted of about 15 people and had strong Intellectual Property (IP), but no customers. It was sold purely on the strength of the IP and team.
Company B had around 160 people and a technical product offering pivoted to a service offering. It had a revenue of about £20M and a profit of around £2.5M, meaning it was sold on a profit multiple.

Insights from Other Exits:

The Early Sale: One profitable company sold early to its biggest customer. It produced a good IRR but the sale happened too soon for a high multiple. Lesson: Understand the ambitions of the founders. These founders weren't ambitious enough for typical angel investor returns.
The Eleventh-Hour Rescue: Two companies in distressed, short-runway situations saw their founders pull a "rabbit out of a hat" and sell for a good return.
Acqui-hires: Several companies were bought primarily for the IP and team. I expect this of my university spin-outs, reflecting the high cost of scaling globally and the lack of late-stage equity capital in the UK.
IPOs: Two companies went public. After the lock-in period, I had to decide when to sell. Experimenting with public stocks taught me that I actually appreciate the illiquidity of angel shares; I am not good at timing public market buys and sells.
Liquidation Preferences: Two companies yielded positive exits only for the investors in the final round due to liquidation preferences. These did not qualify for EIS tax relief, as EIS almost always applies only to ordinary shares.

There is disagreement in tech hubs like Cambridge about whether the UK should focus on growing multi-billion-dollar companies, or if we should follow the "Start-up Nation" model of Israel—growing companies to a value of £20M–£200M and exiting to global players with massive market reach.

In my view, UK companies exit early due to a relatively small local market, difficulties entering the US and Chinese markets, a shortage of later-stage capital, and sometimes a lack of local entrepreneurial ambition.

Angels are in the exit rather than the philanthropy business.

The Impact of the Pandemic & Valuation Resets

The Pandemic Shift

In early 2020, panic hit the entrepreneur community. Many angels, myself included, responded by rapidly injecting capital to help portfolio companies survive the expected economic storm.

The real issue came with new investments. Conducting initial due diligence over Zoom and Teams made it incredibly difficult to gauge personalities and team dynamics. This caused an initial drop in new deals.

However, remote deals have now become a permanent fixture. Angel investors who used to stick strictly to local geographic boundaries are now completing deals entirely online. This is a massive advantage for entrepreneurs, giving them access to a much larger pool of capital.

The 2022 Valuation Reset

For a few years, valuations skyrocketed. Investors had to "sell" their cash to good entrepreneurs rather than the other way around. I always advise doing this by offering "Invested Investor" skills—value-add expertise that goes beyond capital.

By June 2022, a combination of post-pandemic inflation, geopolitical instability, and government debt triggered a recession scare. Investment money dried up rapidly, forcing valuations back down. While capital remains available, it is harder to secure and comes at a lower price tag.

Critical Lessons in Governance

Broadening Due Diligence

Due diligence does not just apply to founders; it applies to everyone.

In one portfolio start-up holding millions in cash, a new accounting employee raised suspicions by being tight-lipped with HR. A simple Google search revealed significant fraud issues with her previous employer. She was removed immediately, avoiding disaster.

In another instance, a potential hire was found to have a prison sentence. Though non-business related, the brand damage risk was too high, and the hire was passed over.

The Rule on Dividends

It remains my strong opinion that dividends should not be paid if an early-stage company becomes profitable. Instead, cash should be retained to fund growth. Every pound taken out of a growth business is worth five to ten times that amount if left inside to scale.

In 2012, I became involved in James & James Fulfilment Ltd. The company was profitable early on, but the founders chose to take minimal dividends and reinvest profits. This strategy paid off: within seven years, the company exited at a high valuation, resulting in a multiple in excess of 100x on the investment.

The Reality of Warranties

Warranties exist to ensure founders provide accurate information during a raise. In the early stages, they are mostly psychological tools to ensure founders take disclosure seriously. Early-stage business plans are never actually achieved, and investors rarely sue over them because doing so destroys the relationship.

I once saw a shareholder group mount a warranty claim against a company I wasn't invested in. Rather than fight it out in court, the founders simply shut down the business. There are no winners there.

Bad Behaviour in Angel Investing

In the "Invested Investor rules," I write that bad behaviour will always come back to bite you. Sadly, I have seen too many instances of poor etiquette from angel investors over the years:

An angel dropping out after signing the legal documents, forcing everyone to re-sign amended terms.
Delaying wire transfers for five months after signing, using "Brexit" as an excuse.
An investor successfully suing founders for £5,000 when an investment round fell through because he wanted to be compensated for his time.
An angel refusing to sign exit paperwork (where drag-along rights failed with a US buyer) until he was paid £25,000 in personal "compensation" for his investment losses.
An investor making weekly confrontational office visits, eventually driving the founders to relocate the entire company to another country.
Investors holding up a major exit for weeks via legal technicalities because they greedily thought the valuation was too low, despite making a 4x multiple and over £1 million on the deal.

Special Focus: University Spin-outs

I have invested in 17 university spin-outs where the technology was researched by doctoral, post-doctoral, and professorial academics. Generally, these have been highly successful, but commercializing frontier research comes with distinct barriers:

The Academic vs. Entrepreneur Dynamic: Great academics rarely make great commercial CEOs. A spin-out almost always requires bringing in an external commercial co-founder who understands how to raise capital, build culture, and sell.
The IP Defensibility Gap: Some academic institutions believe all research belongs in the public domain via research papers. For an investor, clear patent defensibility is a non-negotiable requirement.
The Long Runway: It takes 7 to 10 years for a deep-tech spin-out to mature. It requires patient capital.
The Equity Split Problem: Many universities demand huge equity stakes upfront (sometimes 30% to 75%+) because the research was done in their labs. This leaves too little equity to motivate the founders or attract future investors.

By comparison, the Cambridge University model works incredibly well. The university’s Tech Transfer Office does not take free equity; instead, they invest their own funds alongside angels and VCs at the same valuation, taking a licensing fee only after the company achieves commercial traction.

Of my 17 university spin-outs, I have had three positive exits, three currently in an exit process, and only one failure. Even if the remaining ten fail, a 40%+ success rate is exceptionally high for angel investing.

The Invested Investor Takeaway

Form an investment strategy, refine it, and stick to it.
Back ambitious, determined, and coachable people with a plan.
Write off your investment immediately; be ready to follow up with 2x or 3x the capital.
Add value by offering your actual skills and experience.
Learn equally from your failures and your successes.
Remember that three-quarters of failures are caused by running out of cash before break-even.
Due diligence applies to everyone: founders, staff, and co-investors.
Be flexible enough to change your mind as you gather data.
Show good behavior; your reputation is everything.
Enjoy the journey!

An Entrepreneur’s Story: A Letter to My 29-Year-Old Self

This letter reflects on my learnings as an entrepreneur over 30 years prior to becoming an angel investor.

Dear 29-year-old Peter,

You have already had some entrepreneurial experience at university and as a co-founder in Bavaria, but this is the big plunge. This is the high risk where you will not only "cut your teeth," but many other bodily parts, as well as your pride.

The Camdata journey you are about to embark upon will continue for 39 years, eventually being run by your youngest son as a lifestyle business. You will go on to create another dozen start-ups with varying levels of success.

Within six years, Camdata will suffer a painful failure, followed by a cautious phoenix rise. A decade later, you will sell it, buy it back within six months, and eventually buy out both your acquirer and your main competitor. The journey will give you decades of gradually greying hair, which will provide invaluable experience when you eventually transform into an angel investor.

Here is what I know now that would have prevented mistakes and heartache:

Grasp opportunities: You have always been comfortable with risk. Keep that edge, but conduct more analysis as you age before taking the plunge.
Luck matters: Having nearly £100K of personal credit card debt to finance building houses in 2001 could have bankrupted you. Luck was on your side.
Build a great team: Hire carefully. You will make mistakes by hiring too fast and firing too slowly. Fix that.
Don’t skimp on financial skills: Letting a bookkeeper incorrectly allocate cost of sale transactions onto the balance sheet will lead to a massive, painful write-down. Invest in proper financial oversight early.
Follow macroeconomic trends: You will fail to foresee the 1990 recession and fail to downsize in time. Pay attention to the broader economy.
Understand Lifetime Value (LTV): Ensure LTV is a healthy multiple of your fully loaded Customer Acquisition Cost (CAC). You will get this wrong with ZedCam—where CAC equaled LTV for nearly two years before you are forced to shut it down.

Remember Always:

Financial leverage using debt works in both directions. When asset prices rise, the reward is massive; when they fall, the pain is catastrophic.
Revenue is vanity, profit is sanity, but cash is reality. Memorize this adage.
Choose and refresh your advisors and Non-Executive Directors with care as the company grows.
Regret and FOMO (Fear Of Missing Out) are destructive, futile character traits. Drop them.

What doesn’t kill you truly makes you stronger. Building a business takes courage, blind faith, and relentless perseverance. By the time you get to my age, your many "war stories" will be of more use than you could possibly imagine to the next generation of founders.

So go for it, take the risks, make the mistakes, and enjoy the incredible satisfaction of building companies.

Yours,

Peter (Your Future Self)

Richard Lucas21 May 2026