Spotlight on TEC Women: Sarah Trethowan, tech investor

Tech startups need money to get up and running while they’re building their first product. That money often comes from angel investors – people who see the potential in the startup business and are prepared to put in some of their own money and expertise to help it succeed.


We spoke to Sarah Trethowan, who turned to angel investing after selling her own business. She explains why startups need investors, and how her investment in Penryn startup Codices helped the company secure a £730,000 investment from CIoSIF and venture capital fund Haatch Ventures.




How did you decide to become an angel investor?


I’d sold my own business, TRAC Services, and didn't know what to do next. I didn’t want to do nothing, and I didn't want to work for somebody else.

I'm not really an ideas person, but I'm good at making things better, at bringing process and structure to businesses to allow them to grow. I thought I could bring that skill to a startup business.


"I'm good at making things better, at bringing process and structure to businesses to allow them to grow. I thought I could bring that skill to a startup."

Angel investing seemed to offer a nice mix of flexibility and freedom. Some investors build a portfolio of companies and don’t get involved in the running of the business, but I was looking to invest in companies where I could be involved in the day-to-day.

Why did you choose to invest in Codices?

I chose Codices because I really liked Tim [Edwards, the founder and CEO]. I believed in him and in his ability to succeed. But most importantly, I felt I could add value.

Startup founders usually know what they want to do, but they either haven’t got the money to do it, or they haven’t got the capacity. It felt like a win-win because I could bring both of those things.

How does angel investment work – do you need to have a lot of money?

That’s what I thought at first. I thought it was like Dragons' Den, where the dragons invest sums like £250,000 and take a 25% share in the business. But it’s not like that at all.


I did an online course with the UK Business Angels Association and they taught me that you build a portfolio of companies, and you invest between £5,000 and £15,000 in each one. So it’s more accessible than people think.


"I thought it was like Dragons' Den, where the dragons invest sums like £250,000 . But it’s not like that at all. It’s more accessible than people think."

With Codices, we did what’s called a service for equity agreement. I invested some money, but I also invested a lot of my time in helping to manage the business. I got paid in shares for the time I put in.


When the company starts to make a profit, or gets acquired by another company, I’ll get a share of that. That’s how angels make a return on their investment.

How have you helped Codices to grow?

Like any tech startup, they were very focused on their idea and on developing the technology and getting it to market. That's as it should be. But you also need a lot of things around that to enable that to happen. You need to manage the finances properly, and have processes in place to ensure the company operates smoothly.

I’ve been able to bring that discipline and process – and I’ve also helped them to think further ahead, about where they want to be and how they will get there.




At Codices there are three angels who are active in running the business. I brought my finance and business management knowledge and a bit of marketing expertise. We also have somebody who understands raising money, and somebody who's run tech businesses. It's a really good mix.

Do you need to be quite techy to be a tech investor?

Not at all – in fact it helps if you’re not, as you can bring an independent perspective and ask questions that help them to think differently.

When I first got involved with Codices, for example, their pitch wasn't really landing. People didn't really understand what their product was all about. Because I didn’t necessarily understand it either, I was able to ask questions and challenge them, and we came up with another pitch that was much more engaging and more widely understood.

How has your role changed as Codices has grown?

I was an investor first, and then later I became a non-executive director (NED). As a hands-on investor and NED I was there most weeks, helping to put financial management processes in place, and more recently helping with the HR processes around becoming an employer.

We’ve always been aiming to attract venture funding, which needs a lot of governance to be in place. You need to document your share structures and investment agreements, your Articles of Association, all the stuff about how you work and how you run and operate. And then you have to actually do the things those documents say.

If I hadn’t been involved, making sure we had these processes and procedures in place, getting venture funding would have been a really challenging process. It would have taken much longer, as the VC investors wouldn’t have had so much confidence in the business.

And now you’ve got the funding, will your role change?

Definitely. Codices can start building a team, and I’ll transition from an operational, hands-on role to a more strategic one.


I’ll be helping the company to take a longer-term view: what do we want to achieve in the next 18-24 months, and how are we going to get there? As a NED, I’ll be responsible for holding the team to account, to make sure they achieve those aims.

What's been the most rewarding thing for you about investing in Codices?

I've really enjoyed being part of a growing business again. It’s so rewarding to see the progress that’s been achieved after only two years of trading.


I've really enjoyed being part of a growing business again. It’s so rewarding to see the progress that’s been achieved after only two years of trading.

The thing about angel investing is it’s risky – you have to be prepared to lose the money. So seeing the company secure major funding from two sources has made me feel that my decision to invest in Codices was a good one.

What advice would you give to others considering investing or becoming a NED in a tech business?

I'm really keen to encourage people who haven't done it before to explore becoming a NED. I think you have most value in the early days when you can challenge and ask questions, and you don’t get the kind of groupthink you get when people have been there way too long.


It’s a role that also really needs more diversity. It would be great to see more women – and young women – on tech boards.

More resources

Sarah recommends these resources as an introduction to angel investing and becoming a NED:

The UK Business Angels Association supports people interested in angel investing

In Touch offers training to become a NED

The Institute of Directors has many courses on becoming a director

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info@tecgirls.co.uk

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