INTERVIEW: Mike Rutterford, Archangels
‘The story of Archangels is the story of 80 businesses’
He showed an ability to do deals from an early age, buying and selling marbles in the school playground and arranging for Coca Cola to sponsor a local dance in Leith when he was just 14.
Mike Rutterford had business in his blood and went on to leave his mark on the economy, no more so than when he launched Scotland’s first angel investing group.
Yet, by his own admission, he and Barry Sealey, his co-founder of what became Archangel Investors, “didn’t have a clue” what they were doing.
It was the early 1990s and Rutterford was fresh from selling his estate agency Stuart Wyse Ogilvie, the names chosen from a directory in Births Marriages and Deaths because they sounded distinguished. With £16m banked from the sale he was left looking at what to do next and teamed up with Sealey to invest in new businesses.
“We wanted to put something back, have fun. Oh, and make bundles of money,” he says with a mischievous grin that betrays the cheeky schoolboy that still lurks behind the alert business brain.
At an event in Glasgow on Friday a report was published revealing the impact of the Archangels group on the Scottish economy. Its findings – 3,000 jobs created, bigger returns for investors than those achieved by US venture capitalists – were endorsed by Finance Secretary John Swinney (below) who said it had been an influence on government policy.
“I was surprised at some of the content,” says Rutterford, who opened proceedings with a few modest remarks about how it all came about and his delight at what has been achieved. “We guessed how many jobs we might have created and now we know,” he says.
His biggest joy, however, is more altruistic. “It is the good we have done for mankind,” he says, referring to the range of life sciences businesses that the organisation has backed, including a company treating white finger disease, another in the eye care sector and a third developing artificial limbs.
Archangels has also spawned an industry. There are now more than 20 angel groups in Scotland and it is a fixture in the investment community which Mr Swinney acknowledged for its “profound impact” on the economy.
Yet Rutterford and Sealey really had little idea what they were launching in 1992. “Angels were people who helped to support stage shows in the west end and we began to realise that this was what we were doing in business,” he says.
At the time a woman called Juliet Chapman was working for them and they were thinking of giving their nascent organisation a name.
“She said the highest form of angel was an Archangel,” says Rutterford. “In fact she got it wrong. The highest form is a cherub, but somehow I could not see Barry as a cherub.”
Over the years they enlisted other wealthy individuals as syndicate members so that over the last 23 years there have been around 200 contributors who have put more than £90 million into 80 companies. It is a high risk strategy and almost half – 44% – have failed, although this equates to just £13.6m of capital that has been lost. It is also high reward when it goes right and the syndicate has backed some of Scotland’s best performers, including the eye care firm Optos which was recently sold to Nikon for £259m.
Other names that have passed through the portfolio include CXR Biosciences, Data Discoveries, LAB 901, LUX Biotechnology, Oregon Timber, Reactec, Bloxx and Touch Bionics.
Rutterford is passionate about growing businesses and seeing value created. He has been a member of Entrepreneurial Scotland and served as a director. He loves the country’s natural ability to invent, innovate and create.
He has bought and sold companies and been involved in numerous prime Edinburgh office developments, including the site off the Royal Mile now under construction. He has a desire to bring about change, and Archangels has been a catalyst for many of these endeavours.
“Archangels is not one company,” he says. “It is an agglomeration of 80 businesses. Each is on its own journey. Our job is to build around the embryo of the company so that it becomes a stand alone entity in its own right. So the story of Archangels is the story of 80 businesses.”
Birthplace: Leith, 1948
Educated: Trinity Academy, Edinburgh
Early career: Buying and selling marbles in the school playground and then winning them back from his friends.
Working career: Joined the Merchant Navy, mastered spherical trigonometry and calculus taught by a sea captain. He returned to Leith where he had been raised by his mother and grandmother and decided to into business. He was a passionate salesman so started Rutterford Ltd, selling life insurance and mortgage products; in 1977 launched estate agency Stuart Wyse and Ogilvie with an initial investment of £6,000 He sold the business 10 years later for £16 million to General Accident; in 1992 launched Archangels with fellow entrepreneur Barry Sealey.
Did you have any mentors in business?
I guess it was Barry. He was my mentor, or perhaps tormentor. He mentored me and I mentored him.
What keeps you awake at night?
I prefer it when I work with committed executives who are not sleeping because then I know someone else is bothered about their business.
What makes you angry?
In all the years I have been in business, nothing much. Michelle Mone’s appointment [as a government adviser] surprised me. I got angry about that. It was a victory of celebrity over substance.
When not working?
He lives in Edinburgh and spends his holiday time sailing the world with friends and business partners who know him for his devilish sense of humour and adventurous spirit.
In June 2010, he received an Honorary Doctorate in Business Administration from Edinburgh Napier University.
Photo: Mike Rutterford (by Robert Perry)