- The Guardian,
- Saturday February 19 2000
Want to ride the net wave but not willing to take the risk of quitting your job? Then the answer may be to lend your investment cash and professional skills to a friend or colleague who you believe has a plan that will take off.
Freelance travel journalist Sophie Campbell came up with an idea about selling weekend breaks over the net, but it was the business nous of her flatmate, Bridget Guerlin, which made the City sit up and take notice. Last June last year, between moving jobs from Schroder Unit Trusts, where she was the marketing director, to Matrix Investment Management, Mrs Guerlin wrote the company's business plan. She secured the backing of James Ogilvy, managing director of Foreign & Colonial, who agreed to become the start-up's chairman.
After that, raising the initial capital was relatively simple. "It was very, very easy. We thought it would be difficult, but we quickly raised £600,000 and even had to send cheques back." Other friends and colleagues have chipped in, most working two or three nights a week as non-executive directors. One is the editor of a travel magazine, another a lawyer at a major corporate, another an IT specialist at a bank. Currently it is due to go live in April or May, but its identity remains under wraps for now. A thorough business plan and a board with management expertise are essentials to raise financing. "Everyone's got ideas, but if they've got a business plan formulated and key management in place, it's far easier to secure funding. The crazy days of money pouring into little more than spare-bedroom set-ups are gone. Most of them are now dot bombs, not dot coms," says Eric Bain, managing director of Illuminator, one of the 'incubator' funds which finance start-ups.
Illuminator will cost out an idea and evaluate whether there's a gap in the market. It may then invest, but also demand a substantial equity stake in the business.
Links
Accountants - most have corporate finance teams which assist in finding finance from VCs and institutions.
Venture capital - the British Venture Capital Association has a list of firms. Contact: 0171-629-9949.
Incubators - UK Business Incubators will provide a list of firms. Call 0121-250-3538 or www.ukbi.co.uk
Angels - for the National Network of Business Angels Groups, contact LentA Ventures: 0171-236-3000.
Grants - The Princes Trust provides small start-up grants. Contact: 0171-707-4001
