Investment Workshop

As I alluded to in the previous post, last week I attended an investment workshop organised by the Prince's Trust. When I first heard about the event I wasn't too interested as I hadn't really given investment any prior thought so assumed the content of the day wouldn't apply to me. However it had sparked an interest and when the Trust's London office called me up and explained a bit more about it I decided to go along and see what it was all about. I'm glad I did as it turned out to be extremely worthwhile.

The event was organised and presented by Nick Jenkins, founder of Moonpig.com which sold to photobox in July 2011 for £120 million, there and then you realise this guy has got to be worth listening to. Alongside Nick were other Prince's Trust fellows and entrepreneurs Tim Roupell (founder of Daily Bread, sold in 2008 to Hain Celestial) and author of a great looking book, Andrew Dixon (former VP at Goldman Sachs and founder of ARC InterCapital) and Claire Locke (founder of Artigiano, sold in 2006). We also had a flying visit from Mark Prisk (Minister of State for Business and Enterprise). A pretty stellar line up if you're looking for business advice!

The day started out with a presentation from Nick, taking input from the other entrepreneurs, sharing stories and advice garnered from their various journeys to the successes they have today. The focus was on the path to investment, but a lot of the information shared made sense as just plain old good business advice. Some key points raised that stuck with me:

• If you're seeking investment, make sure it's for the right reasons. Floundering sales is not one of those reasons
• 5x return in 5 years is a reasonable expectation of an investor
• The most likely point for return on investment is the exit but consider: Will you really want to sell?
• What investors are looking for:
  • Good people
  • Good business model
  • Strong growth potential
• Disadvantages of equity investment:
  • It is expensive if you are successful
  • Investors may have the right to interfere and you could lose control
  • There is a likelihood you will need to sell at some point

This was a really good introduction for someone like myself who was not at all familiar with the process, I had a lot of queries and the information covered addressed all of them. Something I was unsure of which was addressed is if, other than funding, angel investors got involved with the business. It turns out in many cases (not all) they do and that can of course be a good or bad thing depending on who is getting involved and to what extent. Having a well connected domain expert invest in your business could be hugely valuable and help you realise significant new opportunities. Equally however someone investing significantly in your business has a right to want to look after their investment and may make demands you might not agree with which could cause friction and steer you down avenues not in line with your own vision. Also the distinction was drawn between Angel investment and Venture capital investment, the former typically being smaller investments by perhaps more interested or involved parties whereas VC funding is more of a finance only arrangement.

As well as the presentation we got to spend some time with the entrepreneurs querying them for advice and experiences. The point that really hit home with me here is that these people were really nice human beings. The media tends to make out that in order to be a successful entrepreneur you have to be some sort of hard-nosed ass-hole. I've always maintained that it should be possible to build a strong successful business being reasonable, understanding and fair (but of course not to be a complete walkover). Nick, Tim, Andrew and Claire are real testament to this and it was very refreshing to speak to people whom I consider a true inspiration and demonstration of what can be achieved with some hard work and determination.