I am interested in investing between £50,000 and £100,000 in new business opportunities.

My business interests over the past number of years have been singularly focused on business start up ventures. I have been, and still am, a great believer in the fact that business is all about people, who do business with people, and it is the enthusiasm, honesty and professionalism of people taking forward a given venture that is, in my view, every bit as important as the venture itself.

Philosophy

...to arrive at a ‘yes’ a lot of work needs to be undertaken to determine the commercial issues surrounding the investment

I will happily look at any legal business venture, irrespective of the industrial or commercial sector, but I will not be bullied into reaching an investment decision. In my experience, investment decisions come down to ‘yes’, ‘no’, or ‘maybe’. I am very clear that if I say ‘no’ to a business venture then that is the end of it and I will not tolerate further approaches being made by the party seeking the investment. No means ‘no’, and when I decline an opportunity then I will not look again at that Company, or at any venture associated with the individuals from that Company, for a period of at least two years from the date of the initial investment opportunity being declined. The ‘yes’ decision is quite clear, but yet to arrive at a ‘yes’ a lot of work needs to be undertaken to determine the commercial issues surrounding the investment, not least, determining whether or not the terms being sought make commercial sense. In truth, a deal is only a deal if both parties walk away happy, therefore, the reality is that unless I turn down an opportunity at the initial examination then the best that someone seeking finance can ever expect is a ‘maybe’.

Initial Investment

For my own part I would be seeking investment opportunities that fall between £50,000 and £100,000, but that sum could be easily doubled by me bringing in one or two business associates. Thus, if an investment being sought was between £100,000 and £200,000 then I would be happy to contemplate arranging such a sum but, for the avoidance of doubt, I personally would not invest more than £100,000 initially. With regard to a follow on investment: this all depends on circumstances at the time, but, assuming there was commercial justification for a follow on investment, then I think it would be reasonable to assume a similar financial sum being invested to that which was initially invested, plus further investors being brought forward, by me, resulting in an investment of perhaps two, or three, times the initial investment. Thus, if my initial investment, shared with an associate, was for £200,000, then assuming it made commercial sense, and the terms of the follow on investment were sensible, then I would expect to make a similar investment of £200,000, plus, say, up to a further £400,000 to be invested by my close business associates.

I would be seeking investment opportunities that fall between £50,000 and £100,000

There are costs associated with investments being made, and I am certainly not a charity when it comes to issues of business. I will thus charge an Arrangement Fee of 2.5% of funds invested, directly and indirectly, plus VAT as appropriate. Should it transpire that I decline an investment opportunity then there will be no Arrangement Fee to be paid. However, and for the avoidance of doubt, the Arrangement Fee will not be deducted from sums invested and will be subject to a credit period of 24 months. Thus, in raising an Arrangement Fee Invoice I am seeking to cover my costs associated with evaluating an investment opportunity, whilst at the same time allowing the recipient Company to use, in the short term, all of the funds invested. By granting 24 month’s credit then I am allowing the Company to pay my fee at a time of its choosing.

I am based in the UK, therefore British business ventures are the easiest for me to examine. Having said that, I am prepared to look seriously at any business venture in any country where the first language is English. I say this for two reasons, the first being that I only speak English, and the second being that I am comfortable with the legal systems in most of the English speaking world. That said, I would not wish to shut the door on a business venture emanating from somewhere that does not have English as the main language. Thus, if an opportunity comes forth from, say, Germany then I will happily look at it, provided that the party seeking the investment can readily communicate with me in English. Having said that, I will not invest into a country, where English is not the main language, in anything other than the Pound Sterling, or the US Dollar, thus if I was to contemplate an investment in Germany then it would have to be denominated in either Pound Sterling, or the US Dollar, with the currency exposure being borne by the Company itself.

Further Investment and Board Representation

It is important that any investment is supported by guidance and assistance, as well as by hard cash. Thus, I would be happy to make myself available to serve on the Board of Directors for any Company into which I invest. This is not an essential condition of any investment, far from it, but as I get to know a Company, and its Board of Directors, then it might make sense for me to join their Board as the investment is made, but that decision would firmly rest with that Company.

The nature of early stage investments tends to be that they seldom achieve half of what they expect to achieve, and operational costs are usually double the initial predictions. This does not mean to say that a Company has been badly managed, or indeed that the initial expectations were misleading; rather, it shows that the Company is operating in a dynamic environment and that circumstances change. It is, therefore, quite normal for additional finance to be required and I would expect a further opportunity to invest ahead of other third party investors being sought. The Pre Emption Rights allowing for an investor to be given a follow on investment opportunity are generally written into a Company’s Articles of Association; indeed I would seek such a clause as a condition of my investment, but, in principle, I would be happy to follow an initial investment, provided I remain satisfied that the commercial prospects for the Company remain sound and achievable.

I do have a number of close business associates who may wish to follow my initial investment. Some of these individuals I would be happy to bring in alongside me at the initial stage of an investment being made, doing so by dividing my investment with them, albeit at my discretion. Any follow on, or secondary, investments would be for those individuals to contemplate on their own, given that they would be investors in the Company in their own right, but if I felt, or rather the Company felt, that they would like to widen the shareholder base, and I was of the view that such a course of action made commercial sense, then I would be happy to introduce other investors. That said, and for the avoidance of doubt, my close business associates would be unlikely to consider such an investment unless I was a Director of the Company into which the investment was being sought, and I too would be uncomfortable in seeking their investment unless I was satisfied that what was being sought made commercial sense. It is one thing losing my own money, but quite another losing a friend’s money.

Application

I will not take kindly to being bombarded with copious amounts of technical jargon contained within a Business Plan, not least because life is too short, and for that reason, and that reason alone, I have created a very simple Application Form for anyone seeking an investment from me. The information being sought is fairly bland, but what I am trying to do is to encourage you, the Company seeking funds, to explain your commercial advantage to me in a few pages of A4. If the Company cannot get it across in such a succinct manner then I would question their ability to develop their business, but, having said that, if I decide to go forward with them, then, and only then, would I review their full Business Plan. Thus I need to know that that they have a Business Plan, even if it is not something that I would seek to review initially.