#talkingheads: How to Prepare your Business for Investment, Growth and Sale
Get to know Potential Investors, don't Obsess over the Perfect Product and get Involved in Manchester's Thriving Community Startups Advised
at Headspace Manchester’s first Talking Heads seminar – a series of events
aimed at growing businesses in Manchester – local entrepreneurs Harrison Woods
(Managing Director of YourParkingSpace.co.uk who secured funding on BBC’s
Dragons Den), John Kershaw (Founder of M14 Industries who secured funding on
BBC’s Dragon’s Den) and Alex Epstein (Founder of Concoction and former
contestant on BBC’s The Apprentice) advised attendees on how to prepare their
business for investment, growth and sale. From the importance of not obsessing
over product perfection to the rapid growth of Manchester’s startup scene, the speakers
shared a range of pragmatic advice based on their experience of starting
businesses in and around Manchester.
Finding the right investors
Having recently secured a Series
A investment of £1.5 million, Harrison Woods spoke about the challenge of
meeting serious investors, particularly given the herd mentality of many in the
Venture Capital world, who tend to wait for others to make an offer before showing
their hand. Establishing a set of rules
- in Woods’ case meeting someone for a coffee and trying to move the
conversation on very quickly after that – helped to single out serious
investors. According to Woods: “if they really want to invest and they believe
you have a great product, you shouldn’t be waiting long”.
John Kershaw discussed the
importance of building a genuine relationship with potential investors,
discussing M14 Industries’ experience of joining the Ignite Accelerator Scheme,
after meeting the schemes’ founder at a Manchester business event. The
structure of Ignite – being Angel-backed – meant that the potential investors
are there from the outset, learning about each business, its problems, etc.
“It’s crucial to have that kind of open dialogue with potential investors”,
Finding the right team
Alex Epstein discussed the
importance of finding investors that offered more than just financial backing.
For a brand such as Concoction, “the only way to give the brand credibility was
to bring on board credible people within the beauty industry”. Epstein
approached Millie Kendall MBE (Ruby & Millie), Will King (King of Shaves)
and local entrepreneur Harvey Jacobson.
The panel also discussed the importance
of finding investors who shared the businesses vision, particularly in the
world of tech startups, where revenue is often a way away. “If an early stage
investor starts asking an early stage tech company about revenue then you should
get out of there” advised Kershaw, “as they’re clearly not interested in
investing in a high risk strategy. The ‘venture’ is in ‘venture capital’ for a
Manchester’s startup scene
Manchester’s startup scene is unpretentious and thriving, yet still has its shortcomings, suggested the panel. As a “big city that is arguably more representative of the rest of the UK than London”, it is a great place to grow something new, suggested Alex Epstein.
Kershaw and Woods both agreed that being a tech startup from Manchester was a useful differentiator in a world still arguably dominated by London, something that financiers in London “find quite refreshing” suggested Woods.
One area where Manchester was still falling short, of London but more so Silicon Valley in the US, was around ease of raising finance. “I’ve seen many tech startups across the region that have incredible business propositions – they’ve got the growth and the revenue – who are struggling to raise £1m, whereas in the USA, similar businesses are raising $30m USD on a regular basis” pointed out Epstein.
“I would struggle to name more than 5 businesses in Manchester who have sold their company for more than £10m” added Kershaw, “that said, the community itself is thriving, having grown from lots of small pockets of activity to something much more unified.
“Manchester’s definitely getting more attention” added Woods “but it’s important not overstate its importance or live in a bubble. It’s a 2hr train journey to London at the end of the day and people need to be more open to popping down on the train for a day, utilising London’s benefits and coming back”.
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