Meet the Investor acting as a guardian angel to small firms

As a teenage skateboarder Arnold Du Toit quickly learnt the importance of picking himself up after falling over, and today the entrepreneur – who bounced back from early career difficulties – works with Connected Places Catapult to help start-ups avoid mistakes and secure investment.

“As a student living on baked beans, it was the most money I’d ever seen,” recalls small business investor and advisor Arnold Du Toit, who nearly 20 years ago was stood on a fairway filming a friend taking a test ride of his prototype ride-on golf trolley.

Another player came over and prodded Arnold in the back with a nine iron. “This guy asked ‘Where did you buy that?’ and I replied it was just something I built for a university project,” says Arnold. “But he kept prodding, saying: ‘I want this thing; how much is it?’

“Look, it doesn’t have a price’, I told him – so he asked if I could sell it to him.” On the spot, Arnold came up with a figure of several thousand pounds, hoping the man would disappear. But instead he asked: ‘Would you take a cheque?’

The offer was politely declined, but it served as an introduction for the young inventor to negotiation, product value and how others will seek to capitalise on great ideas.

Arnold’s trolley – known as RolleyGolf (pictured) – allowed golfers to stand on a folding platform on the back, press a button and ride around the course. “It was the best of a golf buggy and trolley: you could either ride it, or push it to keep your exercise going.

“For my final year project, I wanted to combine my love of skiing, skateboarding and cars with my new found hobby of golf. I took the idea from the back of a napkin all the way through to a working prototype, tested it, came up with a business plan and pitched it at a design show.”

Building momentum in a growing business

RolleyGolf started out in a basement workshop at South Bank University in London where Arnold studied product design. He was encouraged to take part in a ‘Dragons’ Den’ style competition where students pitched for investment, and it turned out that one of the judges was a keen golfer. Arnold secured funds and started the first of two businesses: Drive Daddy which focused on building the product, and later the RolleyGolf Experience which hired out the trolleys.

“Within the first year I secured 30 pre-orders and every time we tested the product, it gathered interest.” The trolley featured in golfing magazines and on television, but it was another two years before Arnold was able to secure a manufacturer. To keep customers interested, he offered them the latest prototype to test so he could receive feedback to help the next iteration.

Arnold spoke to several successful business people out on the golf course, and secured extra investment to scale-up the company to provide a broader offer: a lightweight electric vehicle to navigate congested city streets.

But within five years the firm experienced difficulties. Demand kept growing, but the product was struggling to meet various pieces of legislation required of vehicles. Arnold launched one final investment round, but investor fatigue appeared to be setting in. “Sadly the company had to be dismantled in front of me.”

Arnold spent two years in and out of court, “learning everything I needed to know about business through the mouths of lawyers. It taught me how to build a business, raise investment and what my responsibilities are – not just to clients but investors who had backed my dream. Once a business grows, it can be hard.”

The experience “tore down my entrepreneurial world” but Arnold was thankful for the support of family and friends. He decided to use his experience to help other entrepreneurs.

Generous in his advice to others

He secured a job with Pearson College London to build an accelerator programme for small, digitally focused businesses and met “all these wonderful founders who needed advice”.

While at Pearson, he bumped into a former customer of one of his golf trolleys who had set up investment firm True Altitude, which needed an advisor. Arnold became its Director of Corporate Development.

Arnold was also offered a role as an advisor to a water technology business called Liquid Logical, and was introduced to Connected Places Catapult where he mentored start-ups on its programmes on a voluntary basis. “I was meeting 30 to 40 businesses a month and it seemed people appreciated me more on the advisory side as someone who had been through it, rather than being a pure entrepreneur.”

He later found himself working alongside the Catapult delivering an accelerator programme in Milton Keynes; advising software and digital firms.

During the early stages of the pandemic Arnold founded a corporate venture called Bubl, helping start-up firms secure talented people from higher education looking for experience. He also became a partner at Silicon Roundabout, a technology community in east London, and three years ago founded WeSprint; a family business offering start-up companies involved in clean-tech investment programmes to build their businesses.

Arnold then began investing in small firms himself, becoming what is known as an ‘angel investor’. “Angels tend to be people who have experience in a marketplace, or a strong relationship with those starting a business. The number of angels in the UK has grown markedly in recent years because of tax breaks. The earlier they back a company, the more angels will need to be hands on to help a company scale-up.”

With his wife Sophie, the couple are currently angel investors to 11 businesses, including technology firm Ensemble Analytics, software platform Othership and transport start-up Electric Assisted Vehicles – all of whom Arnold met through Catapult programmes.

“The investments I have made have either been because of experiences gathered through my career or because I have spotted a gap in the market,” he explains. “But my investment thesis is more about people, rather than spread betting; I tend to spend a lot of time with founders to get to know them.”

Explaining the appeal of angels

So why should entrepreneurs seek the help of angels? “In the current investment landscape, it is incredibly hard to raise money from one individual or company. But thanks to technology, it is easy to quickly create syndicates. My advice to entrepreneurs is find an angel investor who is passionate in what you do, but don’t expect them to complete your entire funding round. Lean on them to find other angels and talk to clients. If they bought your product, they may buy into your business.”

But why seek investment from others at all? “If your business is able to grow organically, then definitely reinvest profits and build for the long term,” he replies. “But many companies require a lot of resource to get their idea to a proof-of-concept stage.

“If we look through the lens of decarbonisation, the timeframe is set to achieve big goals. Technologies being developed now might be the key to solving global issues. So the aim of the game is to get them out as quickly as possible.”

And what is the appeal for an investor to put money behind a start-up? “Yes, we are looking for a return, but investors should never spend money they cannot afford to put at risk. The perfect situation is where you believe in the people behind a company, believe in its cause and believe it has a future.”

Collaboration within the Catapult

Arnold is a familiar face among SMEs associated with Connected Places Catapult, and became an advisory board member to the Freight Innovation Cluster steering group last spring to drive growth in the sector, especially around decarbonisation. “Collaboration among start-ups, academics, local authorities and large corporations is important to come up with answers to big problems,” he says.

“Connected Places Catapult is one of the best places to come and test and validate your product, and build networks. It’s like a window with access to investors and other incredible people. It’s their job to build other people’s dreams, and there is no other initiative I know where the motive is so pure. It’s also a great place for investors to come and learn.”

Arnold humbly says his best investment to date has been his family, but from a professional point of view adds that it is also in the time given back to others. Any regrets? “I probably should have listened to fewer people, and only taken advice from those who are where I wanted to be, or were going to places that I wanted to go.”

He adds that “patience, sector specific knowledge and a deep understanding of finance” are key attributes in a successful investor. Being able to spot an outlier who becomes the next best thing also helps. “It can certainly be rewarding to put your cash into the hands of other people who see a better future. If it works out, it can be tremendous.”