Entrepreneur & Investor Issue 9 by The Successful Founder

Creating and Living the Life You Desire

STARTUP FUNDING CLUB SPECIAL ISSUE FROM STARTUP TO SUCCESS: EXPERT ADVICE, TOP TIPS, CASE STUDIES

THE BEST WAYS TO EXIT YOUR BUSINESS INVESTING IN CLASSIC GUITARS HOW TO GET CELEBRITIES TO ENDORSE YOUR FASHION BRAND NEW LONDON PRIVATE MEMBERS’ CLUBS

Issue 9 | £5.95 www.entrepreneurandinvestor.com

LIFESTYLE – LUXURY CARS & TRAVEL SPECIAL

START UP STRATEGY l BUSINESS GROWTH & EXIT l SECURING INVESTMENT

INTRODUCING THE NEW HALLMARK OF WELLBEING Welcome to the new private members’ wellness club, where your health and wellbeing are our priority. Located in a beautiful, light-filled historic building in one of London’s most iconic squares, this is a club that will, quite simply, enhance every area of your life. Step into this peaceful enclave and experience a level of privacy and service rarely encountered in a health club. From the finest personal fitness training in London to our opulent Champagne Bar, your wellbeing is assured. Our team would be delighted to meet with you and give you a private tour of this unique club.

3 St James’s Square, London SW1Y 4JU 0203 909 7133 | enquiries@3sjs.club | www.3sjs.club

Swiss movement, English heart

C9 H A RR ISO N BIG DAY- DATE AU TOM ATI C

Made in Switzerland / Modified ETA 2836-2 automatic movement with Big Day-Date complication by Johannes Jahnke / 38 hour power reserve / 43mm, Hand-polished, 316L stainless steel case / Anti-reflective sapphire crystal / Exhibition case-back / Italian leather strap with Bader deployment

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EDITOR’S LETTER

EDITOR IN CHIEF Lisa Curtiss editor@entrepreneurandinvestor.com

ART DIRECTOR AND CHIEF DESIGNER Adam Woodgate aw@adamwoodgate.co.uk

ASSISTANT ART DIRECTOR Justin Earle

DEAR READER,

design@entrepreneurandinvestor.com

Welcome to this latest bumper issue of Entrepreneur & Investor. In this magazine we’re delighted to have been joined by Startup Funding Club (SFC). Startup Funding Club is a leading organisation in the UK early stage investment space and was named finalist for both the Best Angel Syndicate and Best SEIS Investment Manager awards at the Growth Investor Awards 2017, showing the strength of its co-investment model

STAFF WRITERS Ceri Roberts Emma Ridley Gemma Jones Gayle Penny Jason Penny

CEO Stephen Page and his talented team have worked with their fantastic network of experts to create an exclusive special and comprehensive start up journey section for us - sharing hugely useful advice and top tips, based on their many years of experience and success.

editorial@entrepreneurandinvestor.com

This collaboration is timely as they’ve recently launched a very exciting Startup Funding Club Angel Fund, a new fund designed for angel and sophisticated investors with entrepreneurship at its core. More information on this can be found at www.startupfundingclub.com Of course, as always, throughout the magazine you’ll find many features on a wide range of entrepreneurship and investing topics to inspire and inform, along with luxury lifestyle. The key focus this time is on cars and travel. Do join us too on our rapidly growing website – www.entrepreneurandinvestor.com and social media channels, where you’ll find the latest articles and news.

DESIGNERS Justin Earle Mariana Almeida Marco Maia design@entrepreneurandinvestor.com

ADVERTISING & SPONSORSHIP sales@entrepreneurandinvestor.com

DISTRIBUTION Adam Long adam.ican@btinternet.com

LISA EDITOR IN CHIEF

SUBSCRIPTIONS

Visit our website - www.entrepreneurandinvestor.com

CONTRIBUTORS

subs@entrepreneurandinvestor.com

William Adoasi, Vangelis Andrikopoulos, Chanelle Allen, Alex Blakeway, Alex Batlle Bosch, Angelika Burawska, Steve Campion, Anabel Fielding, David Gabriele, Clive Hyman, Shweta Jhajharia, Charlotte Lowel, Vic Mistry, Stephen Page, Luke Penny, Paul Russell, Neil Saada, Chaya Soggot, Gareth Smyth, Daniel Tait, Surj Virk, Jamie Waller & Joseph Zipfel

Find us on Issuu - issuu.com/entrepreneurinvestor Follow us on Twitter - @Entrep_Investor

Published by Fortuana Limited

CONTENTS 19

112

122

127

ENTREPRENEUR 12 7 Steps to Delivering a Powerful Presentation 14 How I Got Celebrities to Endorse My Fashion Brand 16 Why Buying a Business Might be the Best Choice 18 Making the Grade 20 Why Your Marketing Needs an Avatar 22 Launching into The Luxury Industry 23 Women â&#x20AC;&#x201C; How to Break Barriers and Reach the Top 24 3 Ways to Start A Business in Uncertain Times 26 How to Achieve Maximum Value When Selling a Business 28 What Influencer Marketing can do for a Business 29 How I Became an Artisan Beer Entrepreneur STARTUP FUNDING CLUB 32 Reinventing Early-Stage Investment: The Journey of Startup Funding Club 34 In search for unicorns 36 A Guide to Startup Terminology 39 SFC reveals: The life of a startup 40 Different ways of funding a business 42 Startup trends 44 A short guide on startup business valuation 45 How to get started with investing in startups 47 All you need to know about SEIS and EIS 49 Angel investor profiles 53 Healthy business habits 54 How to find good startups at an early stage 56 Top 10 reasons why startups fail fast 58 Making business a success 59 British, digital and on the fast track 60 What are the implications of Brexit for tech entrepreneurs and investors? 62 The good, the bad and the ugly exits 63 How to Exit a Business 70 How to plan for a successful exit 72 The five golden rules of successful angel investors 74 Stephen Page on exit strategies 78 Boost your business innovation with grant funding 79 Startup Discovery

INVESTOR 81 Gold Sales Surge 125% as US/North Korea Standoff Intensifies 82 Investing in Rare Guitars 84 Investing in Yachts 86 Major New Ferrari Exhibition at Design Museum London 87 Seeking Out New Talent By Investing In Startups 88 I Need Investment For My Business â&#x20AC;&#x201C; Where Should I Go? FORTUNE & LIFESTYLE 90 Luxury Travel 92 Luxury Travel: Maldives Special 112 Explore Wellness to Boost Your Business 116 New Volvo XC60 118 Volvo V90 Cross Country 120 Jaguar F-Type Convertible 122 Jaguar F-Pace 123 SEAT Ateca 124 Range Rover Evoque 126 Sunseeker 76 Yacht 127 Fairline Squadron 64 128 Fine Fragrance 129 Wellbeing

ENTREPRENEUR

7 Steps to Delivering a Powerful Presentation We’ve all been there… you’re trying to listen to the speaker, but their presentation slides are so distracting that your mind wanders. You see people looking at their watches, wondering what’s for lunch, and perhaps slipping gently into a slideinduced coma. It doesn’t need to be like this. You can use visual aids to bring your message to life and to help you connect with your audience. All it takes it a little preparation and seven simple steps: KNOW YOUR AUDIENCE Think about the reason you’re being asked to present, the size of the audience and what they may already know about the topic. Nothing induces boredom more than explaining something that someone already knows, or causes more confusion than assuming they know all the acronyms and jargon that you’re using. The most useful approach is to build a “persona” to help you think about people in the audience, or more than one if it’s a diverse group. Give your persona a name and think about what they’re like, why they’re here, their hopes and fears and how you might solve their problem. DEVELOP AN IDEA Your presentation should have one message. It could be to solve their problem by buying your product, investing in your project or changing a policy. In the 7 habits of highly effective people, Stephen Covey said “begin with the end in mind” – this is especially true when it comes to presentations. If you’re not sure what the audience should think, feel and believe by the end of your presentation, then grab a few PostIt notes and start doodling. I tend to find that the first ideas are rarely the best, but with a few iterations you can come up with something much more compelling. You can turn “buy my market research service” into “hear how XYZ improved results by delighting their customers”. Remember to focus on the benefit to the audience. PLAN YOUR PRESENTATION Step away from the keyboard…. If you really want your talk to have an impact this is where the magic happens. Pick up your PostIt notes, plan out the key points, then add a story or anecdote for each. Rather than saying that your taxi company has more drivers than anyone else, share a story of how a client had been able to get to the airport after a last-minute flight change. Although most business presentations need to contain facts and figures, it’s the stories and emotional connection that we remember. Think about how you’re going to share facts and figures. If you’re showing a trend or comparison, then a well-constructed line graph or bar chart may be all that’s required to make your point. But, always ask “will this chart make it easier for THIS audience to understand THIS message?”. If not, try something different. If you do need to provide the detailed data, then make it available through a handout or a follow-up email.

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CREATE YOUR VISUAL AIDS Look for images that support your points and stories. You can find plenty of freeto-use photos by searching online for “Creative Commons”, there are also low-cost photo libraries. Or use your own photos. Photos, quotes and video from your current customers can help, however, avoid using a video at the start of your presentation. I’ve been to many conferences where a speaker has opened with a generic corporate video, and no matter how interesting the topic, the audience had switched off before the speaker even started. If you are presenting at an event, make sure that your first and last slides have your name and contact details, and the event hashtag if there is one. You may be required to use a corporate template, and whilst that can seem restrictive it’s also an opportunity to get creative. Ensure that the images that you use are consistent with the corporate style and colour scheme, but don’t fall into the trap of thinking that every slide needs to contain your logo. If you’re 20 minutes into a presentation and people don’t know who you are, then a logo isn’t the solution. Consider your use of text carefully; use it sparingly and use a large, clear font. Remember that your audience can’t read and listen to you at the same time, so always pause after revealing something on the screen. REHEARSE You’re not aiming for perfect, but practice will make you better. Rehearse what you’re going to say and how you’re going to use your slides. Go back to your persona(s) and imagine their reaction as you make each point. Make any notes that you need, but don’t read to the audience. The rehearsal process builds confidence and also allows you to practice your timing. If someone has given you 20 minutes to present, don’t prepare 60 minutes, – far better to aim for 15. PREPARE TO PRESENT Always check what equipment you’ll need to use when presenting and pay particular attention to connectors for screens and projectors. Bring spares of everything possible in case something goes wrong and take a power extension cable too. Having your presentation on a USB stick can get you out of trouble in an emergency. Remember that things can change at the last minute, so be prepared to adapt, and try to arrive early so that you can test that everything is working. DELIVER YOUR POWERFUL PRESENTATION Take a deep breath. Smile at the audience. Then enjoy the experience of delivering your powerful presentation to an audience that will be enthralled, delighted and convinced by your message. Finally, the most important thing, by far, is to focus on the needs of the audience and make sure your message is useful to them. These seven steps will help you deliver the most powerful presentation possible, and produce an experience that is enjoyable for both you and your audience. 

BY STEVE CAMPION Steve Campion is from Toastmasters International a non-profit educational organisation that teaches public speaking and leadership skills through a worldwide network of meeting locations. Headquartered in Rancho Santa Margarita, California, the organisation’s membership exceeds 345,000 in more than 15,900 clubs in 142 countries. Since 1924, Toastmasters International has helped people of all backgrounds become more confident in front of an audience. There are more than 300 clubs in the UK and Ireland with over 7,500 members. To find your local club: www.toastmasters.org Follow @Toastmasters on Twitter. For Toastmasters in the UK: www.toastmasters.org.uk

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ENTREPRENEUR

How I Got Celebrities to Endorse My Fashion Brand D

espite only launching in 2015 Vitae London has managed to secure endorsements from the likes of Richard Branson, Paloma Faith, Emeli Sande, and Philip Schofield. It has made a huge difference to our sales and the growth of our business – and the charity we support. So, how did we do it? There wasn’t ever going to be just one approach that worked for us. Some celebrities are great on email, others seem only to check Twitter, and busy celebrities are really hard to pin down. We started by doing our research. The plan was to identify those celebrities who shared similar interests to us – watches, fashion, and supporting children’s charities, particularly those based in Africa. We found celebrities from the African diaspora had a particular kinship with the continent and were especially keen to support us and our philanthropic aims. What’s more, followers of these celebrities often share similar values, making them our perfect target audience. TIP #1: Create a list of celebrities to contact who share similar beliefs and passions, divided into sectors and celebrity status. Reach out to them with a short, friendly message clearly outlining your idea and proposal. Follow up if they don’t reply, but don’t spam them with messages. Reaching out to those celebrities through social media bagged us endorsements from singer Emeli Sandé and radio DJ Yinka Bokinni. From there, word spread quickly. As Vitae grew we supplied more school uniforms to children in Africa and soon Richard Branson took notice. I was invited to become a Virgin Startup Ambassador and meet Branson at his house. He seemed impressed with the business idea and the watches themselves, going on to personally endorse the brand on a number of occasions. With those key pillars in place, even more celebrities found out about the brand and wanted to get involved. I even met several celebs in the States recently while I was doing a bit of a tour, so the movement is truly international.

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BY WILLIAM ADOASI Will Adoasi is founder of Vitae London, an ethical watch brand that offers fashionable watches at affordable prices in order to advance social justice. Vitae London works within several South African provinces where education is free, but much of the youth are unable to take advantage of such learning opportunities due to their lack of access to school equipment, such as uniforms and shoes, which are required to attend school. Each watch purchased from Vitae London’s classic range of watches supplies a child with two sets of school uniform, a bag and footwear to see them through the year.

TIP #2: Focus on nurturing good relationships with a few bigname and/or well-connected celebrities at first. Not only will they lend you more credibility when you meet other celebrities, but they’ll also tell their connections, growing your supporter base organically.

TIP #4: By supporting a cause through your business, you give celebrities a clear picture of the values with which they’re associating. It’s also an extra incentive to get involved – not only are they supporting a new business, they’re supporting a great cause too!

That being said, sometimes it’s simply about being in the right place at the right time and grabbing the opportunity. For example, I bumped into Romelu Lukaku outside a restaurant in New York. The meeting wasn’t planned, but once I meet him and shared our vision he was incredibly glad to be involved. Everyone we’ve interacted with has been extremely positive about the business. They love the style of the watches and the simplicity of the design. But, more importantly, they were inspired by the fact that we’re using a fashion brand to change lives. They’re often surprised with the power and simplicity of our business concept.

My advice would be to pin down what makes you unique and develop a clear value proposition before going out to celebrities for endorsements. This will make it easier to identify celebrities who align with your brand and makes your messaging to them simple and effective. One of my favourite moments was when Richard Branson swapped his watch on stage, in front of a live audience. I was selected by Virgin to become a Virgin Start-Up Ambassador and had the opportunity to meet Richard Branson at his house…but I forgot to take a watch with me to give to him! I was gutted at my missed opportunity. Later, I was asked to be on a panel with Richard Branson. Fast-forward to a few months ago and I’m getting ready for my big appearance. I made triple-sure that I took a watch with me this time. I gave him the watch in front of a live audience at the panel discussion. In turn, he not only paid for the watch with a wad of cash, he also gave me his watch in exchange! That was one of the high points of my career! If I had to sum up my advice in a single word it would be: belief. If you truly believe in what you’re doing, that energy, that enthusiasm, will become infectious. Everyone you meet and speak to about your idea will share your excitement and, most importantly, will come to believe in you as well. And celebrities are just like other customers – if they believe in you and your brand, they will support you. 

TIP #3: Develop a clear and compelling value proposition. It really comes down to what they call the ‘elevator pitch’ – if you can’t explain it fully and clearly in a sentence or two then your message can get muddled. Make it easy for them to say yes by offering a clear and concise proposition. What you have to remember is that celebrities get asked for endorsements every day – you can’t expect them to support your brand simply because you asked nicely. They’re busy people. If you want them to sit up and take notice, then you have to have a unique and compelling selling proposition. Something that makes you different and interesting. For us, it’s the charity element. We support local South African charity House of Wells in their mission to get poorer kids into education. But we don’t talk about “giving 10% to charity”, because it lacks tangibility. We talk about giving kids two school uniforms, allowing them to attend school and get an education. People can picture a kid at school and what that means to that child and their family.

For a list of celebrities endorsing Vitae see: www.vitaelondon.com/pages/wallofvitae

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ENTREPRENEUR

Why Buying a Business Might be the Best Choice

any people dream of being their own boss. They imagine themselves having that genius idea that is going to make them a millionaire, or just packing in the daily grind to do something they love every day. However, some people believe that the only way to do this is to start from scratch, when in reality, buying an existing business might be the ideal solution for you. When you take the leap to become your own boss, the first thing you’ll need is the capital. According to my own internet research, the average cost of a start-up is £93,800, making it difficult for many people to even begin. Granted, that sum is accumulated over a period of time and is not ‘day one’ capital required. Nevertheless, you are still going to need a significant sum for a good number of business sectors. If you don’t have the money in the bank to self-fund, your first thought might be to approach your bank to ask for a loan. Most start-up companies tend to be self-funded, as banks see it as a risk lending to projects with no proven success. Another option may be a small business grant, but due to their limited availability, there are a number of hoops you are required to jump through during the application process, and you aren’t guaranteed success. You could also appeal to angel investors; however, they are unlikely to get on board if you don’t have an idea that is completely revolutionary and sound. They want to be assured your business will be around long enough for them to see a return. The fact is, more than 58% of start-ups fail within the first five years according to the Office of National Statistics. This could be, for example, because their money runs out, they’ve failed to build a reputation or they can’t get the customers through the door. Again, money is a huge issue when maintaining a start-up company over the first few years, as it can take on average three years to start to see a return. This can be frustrating for the business owner, and also may not be viable for them in terms of their home life. After all, you still need somewhere to live and food on your table.of National Statistics. This could be, for example, because their money runs out, they’ve failed to build a reputation or they can’t get the customers through the door. Again, money is a huge issue when maintaining a start-up company over the first few years, as it can take on average three years to start to see a return. This can be frustrating for the business owner, and also may not be viable for them in terms of their home life. After all, you

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"Buying a business is not without its problems, though. If you have no experience in the business area, you may find that you struggle to cope with the day-to-day managerial tasks"

still need somewhere to live and food on your table. Buying a business can be a great alternative for someone with an entrepreneurial itch to scratch. It gives you the opportunity to be your own boss without many of the risks that come with a start-up business. The prospect of failure in the early days is significantly reduced because you’re missing out those shaky first years. You will be taking on a business with an existing customer base and reputation, which means you benefit from instant cash flow coming in. Taking on an existing company is also a great opportunity for someone who wants to test the water with business ownership. You have all the freedom of owner management while inheriting the existing policies, procedures, and systems. Getting these in place is time-consuming and costly, and can be off-putting to the new entrepreneur. Learning from tried and tested operations can be a great way of finding your feet while still having the autonomy you crave. Many people considering buying a business have concerns that may put them off. Some are worried that the seller will take the customers with them, meaning the new owner has to find a new set. Many small businesses, for example cafés, pubs and mechanics, have a certain geographic appeal. That is, the local people will go to their nearest pub, not walk miles to follow their previous landlord. Many sellers are also preparing for retirement, so they’ll have no need for any customers, new or existing. As a last resort, your solicitor can ensure that protection is provided in the official legal documentation.example

cafés, pubs and mechanics, have a certain geographic appeal. That is, the local people will go to their nearest pub, not walk miles to follow their previous landlord. Many sellers are also preparing for retirement, so they’ll have no need for any customers, new or existing. As a last resort, your solicitor can ensure that protection is provided in the official legal documentation. Getting the money to buy is also a concern I come across, however, lenders often look more favourably on businesses with a proven track record. You can also look at what schemes are available in your local area, such as local authority grants and funding to help with renovations and even just money for taking on the business in the first place in some instances, particularly in areas requiring regeneration. It is also worth bearing in mind that purchasing an existing business is considerably less expensive than starting from scratch having regard to all the costs and risk elements. There are over 7,000 businesses advertised for sale for under the £93,800 average start-up cost. This can not only make it more cost effective in the long run, but also more manageable to launch. Buying a business is not without its problems, though. If you have no experience in the business area, you may find that you struggle to cope with the day-to-day managerial tasks. For example, can you run the accounts on your own? Do you know when the stock needs to be re-ordered? It may be helpful for you to spend some time with the previous owner before you take over, to learn from their experience and expertise; ask for an extended handover,

for instance. This will also help make the transition easier for your customers, your staff and of course you. It will also increase the likelihood of the customers and staff staying with you. There are also a number of pitfalls that you can face when you buy, for example being over-charged, or the seller not being completely honest with you about how profitable the business is, which can lead to disaster once you take over. This is where buying through a business broker can be particularly helpful, as they are able to offer impartial advice and guidance to make sure you don’t get any nasty surprises. Taking your first step towards owning your own business can be nervewracking, but ultimately rewarding. Make sure you take the path that will be best for you long term and good luck with whatever route you take. 

BY GARETH SMYTH Group Managing Director of Hilton Smythe Hilton Smythe is a UK-wide business broker service that facilitates the sale of small and medium sized businesses. It employs more than 40 members of staff at its head office in Bolton and across the country. Since its launch, Hilton Smythe has facilitated the sale of more than 350 businesses nationwide. hiltonsmythe.com twitter.com/hiltonsmythe entrepreneurandinvestor.com |

ENTREPRENEUR

Making the Grade

Digital Entrepreneur & Teech Founder Neil Saada In 2017 the classroom is going portable as the technology revolution embraces learning. We caught up with digital entrepreneur Neil Saada on how he is changing the classroom game.

"It is interesting to see that education is still seen as the next big thing in venture capitalist research list"

School’s come a long way. As recently as the mid nineties, when this correspondent grappled with grades, tech in education amounted to propellor pencils and overhead projectors. However, the technology revolution is a universal syllabus, and the education sector has not proven impervious its charms. Coding is now taught in primary school, blackboards are touchscreen walls, and iPads are just as likely to be on a desk as chewing gum stuck underneath. But one thing hasn’t quite moved with the times; teachers. Their, well, old-school approach to learning has stayed firmly rooted in being in the room. Until now. Three 20 year old tech whizzkids, Neil Saada, Mathias Pastor, and Milo Rignell have created for new way of school, college, and university students to stay one step ahead of their studies at all times with their new mobile app, Teech. The app is designed for those students who either struggle to stay focussed in class, or who are finding they are falling behind. By putting thousands of highly qualified ‘teechers’ in the palm of their hand via latest video technology when they need it, the founders have changed the game for educationalists. We caught up with one of the founders, Neil Saada, a serial entrepreneur who found fame when he used social media to get A-listers including Rhianna to wear his fashion label NasaSeason’s baseball caps to find out more. E&I: Give us the Teech elevator pitch. NS: Teech is a revolutionary app where students from GCSE all the way to university can ask study questions and get a nearly instant live video answer. Our ‘teechers’ are graduate student from the UK’s top universities (including Oxford, Cambridge, UCL, and many more) and our cutting-edge technology pairs these up with those seeking instant, but expert, help in their learning. E&I: Who would most benefit from Teech? NS: We cater for all kinds of students, but we’re ideal for those students who find they get in trouble, or lose focus in class, or who are slipping behind in their studies. It helps to provide an instant learning module to any education, so it will directly help grades, plus it helps those who want to know more on a subject than the syllabus dictates. E&I: Where did the inspiration behind Teech come from? NS: I was revising for my exams in my first year of university, when I realised it was really complicated to access live help for specific problems. The tutoring market is very slow, extremely fragmented, and works mainly on word to mouth, so if you do find someone who knows what you need to then you’ve no idea if they can provide the right kind of advice! At the other end of the scale, the internet is fast, but not precise enough,

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ENTREPRENEUR

and doesn’t add that personal experience touch a teacher would have. With Teech, the time to get a precise answer has gone from days to seconds. E&I: How did you first attract investment into Teech? NS: People say that securing great investors and investment is difficult. However, in my experience it’s about speaking to the right people with the right offerings. For Teech we looked at the most experienced people we knew within the industry and pitched to them. They are three Angels with ties to the best schools in France, and the most prestigious universities in the world. They’ve given us a great support from the start, and are key members of the team. E&I: What do you think is the future of education and technology? NS: It is interesting to see that education is still seen as the next big thing in venture capitalist research list. We have known that for years but still change is slow due to the complicated administrations managing the schools. Moreover there is still a stigma associated to selling solutions to school. We believe than when those walls come down, the education system will finally benefit from the great advancement in technologies such as VR or AI. Technology will bring equality to students by making affordable quality teaching to all and we hope to be part of this revolution.

FIND OUT MORE ABOUT TEECH AT TEECH.COM

E&I: What was your first business venture? NS: I used to buy broken blackberry’s on Ebay, refurbish them by buying cheap spare parts and sell them for a profits to used phone stores around my school! E&I: Why is it so often young entrepreneurs who are disrupting industries with tech? NS: Tech is one of the rare industries where the youth is being listened to, and where investors or potential clients know that your youth might hold the solution to the next big thing. People like Gates, Jobs or Zuckerberg have perpetuated this idea that young people are successful in tech so it makes it easy to sell yourself based on those success stories. It is also one of the rare industries where skills can be more important than industry experience. E&I: You’re originally from Paris. Do you still feel London has an important part to play in global tech post-Brexit? NS: As of today Brexit is a bit of a mystery for us all, but the largest tech hubs and funds are still in London, making it a very attractive city. Moreover, with its International culture and openness in spirit it has a certain character and dynamism that is rare in European cities. However, Paris and Berlin have recently made a lot of moves toward startups and entrepreneurs making the choice to London is a lot less obvious than what it used to be. E&I: You’ve been called one of the most innovative young entrepreneurs in the UK. How do you feel when you read things like this about yourself? NS: I think that It is honestly quite funny and crazy to think of! The last two years of my life have been extraordinary thanks to my co-founders Mathias, Milo and Victor and all of it has been team work. What I believe at the end is that it all comes down to the will; the will of doing more, of wanting more at life. E&I: What’s next for you? NS: Keep on building Teech and working on my other side projects such as my fashion company, Nasaseasons, and Lawrence Parker, my advertising consultancy. There is still a lot to be done in this world!  entrepreneurandinvestor.com |

ENTREPRENEUR

Why Your Marketing Needs an Avatar Marketing isn’t cheap, so it’s understandable that business owners look for value for money. And that leads many to pursue a strategy that targets a large audience. Which can be a mistake, says Shweta Jhajharia of The London Coaching Group.

magine you sell petrol lawnmowers. You might be tempted to target people with an interest in gardening. But some enthusiastic gardeners live in flats and their gardening takes place on an allotment. Others have paved over their lawns to create a parking space and their gardening is limited to raised beds and pots. Others have environmental concerns and prefer electric mowers. Casting a wide net inevitably produces unwanted bycatch, and as trawling a broad interest isn’t an efficient use of your marketing efforts, you should—to turn a recently popular phrase on its head—be thinking about the few, not the many. And that means identifying your ideal customer. But who would that be? And how do you find them? The answer lies in the concept of the Marketing Avatar, which isn’t a superdull sequel to a James Cameron movie, but is the initial and most critical stage in creating a marketing process that will bring into your business the right kind of leads. And key to this process is to get your head around the idea of targeting a person, not an audience. And according to Jhajharia, that person should have six qualities: 1. SEES BENEFIT & RELEVANCE Your ideal customer is your biggest fan. Whatever problem your service or product solves, it’s a problem your ideal customer has, and you are the best solution they can think of. If your

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customer loves you and what you do, everything that comes next is easier. 2. EASY TO REACH OUT TO Your ideal customer is someone you can easily get in touch with. Is it the boss of a company, who will have many demands on their time, or someone within the company whose role is designed to be contactable? Ease of access is crucial. 3. RECEPTIVE TO MARKETING Choosing someone who is responsive to the marketing you use is important. Again, the best person might not be the boss of a company; they’re spinning so many plates they’ve trained themselves not to be distracted. You may instead want to get hold of the person responsible for new plate acquisition. 4. HAVE A RELATIVELY SHORT SALES CYCLE This involves comparison rather than looking for an absolute value, and much will depend on the type of business you operate, but your ideal customer is the one where lead becomes a sale in the shortest time. 5. BUILT-IN REPEATABILITY Your ideal customer spends money with you over and over again (unless you’re a wedding planner). Getting the most from a lead means a sale not being a one-time thing; remember, your marketing budget is an investment, and you want as much return as possible.

ENTREPRENEUR

"any customer spending with you regularly is a good customer, that does not necessarily mean they are your ideal customer"

6. GOOD SPEND VALUE & MARGIN Although any customer spending with you regularly is a good customer, that does not necessarily mean they are your ideal customer. Your ideal customer buys your core products, not just your peripheral ones, and your ideal customer isn’t one who only buys when you are running a sale or special offer.

STEP 4 Once you’ve decided on your top customer, get in touch and ask if you can conduct an interview with them. Go into this interview with an extensive list of questions that will give you an accurate picture of what they like, what they do, where they spend their time etc. The aim is to build a detailed profile.

Now that you have identified the qualities you require in your ideal customer, it’s time to pin down exactly who that person is. Who represents the customers you really want to attract? Who is your Marketing Avatar?

And that document is the profile of your Marketing Avatar.

Here’s how you find out: STEP 1 Extract a list of all your existing customers from whatever database solution you use. This list can include past as well as present customers, but everyone on the list must be easily contactable. STEP 2 From this list, choose the customers you liked the most. Avoid focusing on the number of sales you’ve made with these people or how much money they’ve spent with you, and instead pick out those that you genuinely enjoyed spending time with. STEP 3 Take your list of favourite customers, and rank them by comparing their real value to your business. Now is the time to be ruthless.

Build your marketing strategy around this Marketing Avatar and by aiming to reach this ideal customer, your marketing efforts will find similar people, and provide you with the customers perfectly matched to your business. 

BY SHWETA JHAJHARIA Shweta Jhajharia is Principal Coach and founder of The London Coaching Group, an ActionCOACH company. Shweta is a multi-award-winning business coach, and a popular keynote speaker. She has been recognised both by external bodies and the industry awards panels as the top coach in the UK, and the Number 1 ActionCOACH from over 1200 worldwide, and has been invited to speak at large business events such as the bi-annual Business Show. Despite the competitive economy, her clients consistently achieve measurable double digit growth (over 41%) and are the most awarded client base in UK. See: www.londoncoachinggroup.com

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ENTREPRENEUR

Launching into The Luxury Industry

favourite quote of mine about the luxury market is from Oscar Wilde: “I have simple tastes, I’m always satisfied with the best,” as for me it encapsulates the luxury mind-set, what customers want and expect from the industry. Lots of people want to get into the luxury market and it is easy to see the appeal. A $200 billion industry where trends originate and flow down to the masses and where unique, experiential offerings are the order of the day. People often make quite incorrect assumptions about me when they meet me for the first time, thinking that because I work in luxury now I have little understanding of the ‘other side’. However, I grew up in India and witnessed the terrible depravation and inequality that existed and continues to exist in the country. India is changing in its attitudes to luxury, the industry has truly exploded, yet I can always understand the drive and determination from an individual wanting to improve themselves, to become a better communicator, to enhance their employment prospects and succeed. At twelve, I came to the UK for school and to a country with a completely different culture and etiquette to India. It was perhaps at this time as I adjusted to my new surroundings that I began to really observe the behaviours of others, interactions, how culture forms attitudes and behaviours and the subtleties of communication. The obvious choice for university was psychology and I undertook both undergraduate and postgraduate degrees in Workplace Psychology and Occupational Psychology. For me, this is always the correct approach in the luxury industry; to approach it from a socio-psychological perspective. This is often where newcomers to the industry go wrong, they underestimate it and think that the same rules for the mass market apply. They don’t. Luxury is so complex because it is intrinsically tied up with meaning. The meaning we attach to specific brands, products or experiences, both on an emotional and a symbolic level. After working around the world for the luxury multinationals I appreciated this instinctively, yet it was nigh on impossible to find someone to train my staff who understood the luxury world intimately. Luxury Academy was founded in 2012 and we have gone from strength to strength. But it was based upon real market need, built on solid understanding of luxury and designed specifically for the luxury market.

When we train staff in the luxury industry we always have an appreciation that we all come to the training room with different life experiences, attitudes, behaviours and ways of seeing the world. We spend a great deal of time working with staff to enable them to view a service encounter from the customer or guest’s perspective, and giving that empathy and understanding of their position. It is easy for us to dictate ‘this is what you must say’ but without that empathy, the interaction will never be at its optimal level. One of the best parts of the job is seeing that lightbulb moment for staff when they begin to think like their customer. My absolute favourite training to deliver in the luxury market though has to be Body Language, Assertiveness and Presentation Skills. It still astounds me that these skills aren’t taught at schools as the difference you can see in an individual over three days is immense, how they carry themselves, the inner confidence and belief. The type of skills that allow the staff member to engage with their luxury customer with grace and to deliver the experiential elements of the brand experience that will enable an interaction to be classified as truly luxurious. Luxury is constantly evolving and adapting, it has to, and to operate in the luxury industry you have to be ready to do the same. Customers are constantly searching for the new and exciting and it is down to the suppliers and brands to deliver it with aplomb. 

"Luxury is so complex because it is intrinsically tied up with meaning"

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BY PAUL RUSSELL Paul Russell is co-founder and director of Luxury Academy London, www.luxuryacademy.co.uk, a multi-national private training company with offices in London, Delhi, Visakhapatnam and Mumbai. Luxury Academy London specialise in leadership, communication and business etiquette training for companies and private clients across a wide range of sectors. Prior to founding Luxury Academy London, Paul worked in senior leadership roles across Europe, United States, Middle East and Asia. A dynamic trainer and seminar leader, Paul has designed and taught courses, workshops and seminars worldwide on a wide variety of soft skills.

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Women – How to Break Barriers and Reach the Top Ellen Pao, the investor who sued one of the world’s most famous venture capitalist firms for gender discrimination, recently slammed the “toxic” environment of Silicon Valley for the growing “influx” of “greedy” male graduates. Interestingly, for a sector you’d imagine to be at the forefront of diversity, the stats are quite revealing. It seems almost paradoxical that the global workforce of both Apple and Facebook is just 32% female.

t is time for us to all look in the mirror and strive to ensure the technology industry leads the way in creating a diverse workforce where your gender, age, disability, nationality or religion is as irrelevant as the colour of our smartphones. In my view, companies benefit greatly from diversity. It’s the secret recipe for boosting success in creative and innovative industries. So here are my top tips for women aiming to make it to the top: STOP THINKING OF YOURSELF AS A WOMAN Stop thinking of yourself as a “woman”, think of yourself as a professional. By focussing on our gender, we are creating and reinforcing the stereotype. In many places around the world, women are being held back due to pre-conceived perceptions of what is accepted in certain industries. And this is not solely an issue for the technology industry, although here it is perhaps acute with outdated stereotypes of what it takes to succeed in technology. FORGET THE STEREOTYPES Probably the biggest issue is one of stereotyping and so women need to be careful not to enforce it, by seeing themselves as “women” before they see themselves as professionals. Women do get typecast, but at times we don’t realize how we typecast ourselves as well. When I tell women I’ve hired

a female CTO they look at me with surprise. Not because they doubt my choice, but because they never thought of a woman for a job that most see more normal for a man. But if women put themselves forward for the so-called male jobs and ignore the stereotyping then I am confident that over time things will change. We are sometimes our own worst enemies. USE FEMALES YOU KNOW AS INSPIRATION I admire people who can break down barriers, create change and achieve the impossible, whether they are male or female. During my life, I have had many inspirations, both male and female. Some of my inspirations, who have undoubtedly acted as my inspirations include my mother, the women on my management team and my personal friends. These women, each in their own way, have accomplished incredible things by both male and female standards. Women who don’t let labels and circumstances get in the way of their dreams are both inspirational and admirable. SO HOW CAN WE REMOVE THE LACK OF DIVERSITY AT THE TOP? Of course, the focus on diversity stretches way beyond just women. There are deeper rooted issues around socioeconomic statuses that need to be addressed. As far as unconscious bias stands, candidates may be eliminated

BY CHAYA SOGGOT Founder and chief executive of adtech firm, Woobi.

because of their name, the area they live in, the place of birth and many other personal factors which have no effect on their talent and performance. I believe that by removing personal information from a candidate’s application, we don’t only get the advantages of a diverse team but also hire incredibly talented people other companies may pass on because of unconscious bias. The issues of diversity within the technology industry are so much bigger than whether a company should hire a man or a woman. SO, WHAT CAN WE LEARN FROM ALL THIS? As technology bosses, we should be leading the way. We are an industry lauded for innovation and creativity, so why aren’t we taking the lead when it comes to smashing the glass ceiling? We should create a truly equal and diverse workforce from the top to the bottom. At Woobi, we develop technology for the in-game advertising industry, with a mission to create an emotional engagement between the gamer and the advertiser. Given that according to many studies, including recently the Internet Advertising Bureau, over 50 percent of gamers are women, we would be missing a huge trick if we did not employ women at the most senior levels of our company. 

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ENTREPRENEUR

3 Ways to Start A Business in Uncertain Times Anabel Fielding, Co-Founder of Quintessentially Events, shares her insight on starting up and managing a business during hard economic times; her experience, and tips to get you through today’s uncertain economic environment.

he UK has long been regarded as one of the best countries for start-up businesses, attracting some of the world’s greatest talents across a range of sectors, and benefiting from favourable regulatory environment and labour market. Not to mention one of the lowest corporation tax rates in the developed world. Regardless, starting your own business is incredibly exciting, scary and allencompassing, and knowing when to take the plunge can be a hard decision, even in a favourable economic climate. Following the referendum on 23rd June 2016, and subsequent decision for the UK to leave the European Union, the full impact of what this means for the business community is still unknown. Whilst Start Up Britain notes that 364,645* businesses have already been created this year, the Federation for Small Business (FSB) indicates confidence in the small business sector is declining as market fragility begins to take hold with falling consumer output, an ever-weakening currency, and regulations and trade deals still a long way off from being decided on. Indeed, there is no doubt that these are extraordinary times we are living in, and it’s more than a threat of recession that’s leaving many business leaders,

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SMEs and entrepreneurs, scrambling for security. The nature of business today means that we are in constant communication with the wider markets and more aware than ever of how the merging of a these large global forces may impact us. So, if you’re a budding entrepreneur, is now a bad time to start a business? Not necessarily. Despite many entrepreneurs holding the view that business growth in the UK’s current economic climate is diminishing, there are still great opportunities to be had if you are prepared to re-asses your approach. When I co-founded Quintessentially Events in late 2005, we had no idea that we were about to enter a global recession; if we had we might have been too cautious to give it a go. However, starting the business when we did meant that we had to create a strong, defined proposition in the market and develop a loyal customer base quickly in order to make it through those first valuable years; this allowed us to survive the recession and become the global market-leader we are today. We prepared ourselves by making and sticking to the following key decisions.

ENTREPRENEUR

"It’s remembering to knuckle down and focus on the core premise of getting the job done and done really well that will keep you going into the next day"

1. STAYING LEAN

Over time, as a business grows it cannot help but gather weight, whether that’s with regards to people, outgoings, process or diversifying too quickly. However, in times of economic decline, the crucial trick is to remain lean. By constantly reminding yourself of the proposition of the business and what you need (as opposed to ‘would like to haves’) in order to service your target market becomes incredibly important, as you never know when you are going to need to cut back. In this vein, also think about what assets you have that can be outsourced or used to bring in additional revenue, for instance a corner of office space that isn’t being fully occupied which you could rent out.

2. FOCUS ON GETTING YOUR PRIMARY MISSION RIGHT

There is something to be said for just getting the job done without the fireworks or the grand launch. During times of difficulty, it’s remembering to knuckle down and focus on the core premise of getting the job done and done really well that will keep you going into the next day. It is very easy to get distracted by the day-to-day and things outside of your core objectives, particularly when you are the boss with no one to answer to and there are plenty of opportunities around. Get around this by tracking your daily activities against your business goals; even if you are not showing it to someone else, this will help you both track your progress and identify when and where you are going off course.

3. DON’T GO IT ALONE

Finding a strategic partner is an important way of getting through a tough time for a business. Whether it involves aligning with another person, merging with another business, or franchising to reach new regions – as we did with Quintessentially Events – growth can come from expanding to a new location and/or partnering with another business. At the start, entrepreneurs want to do it all on their own and on their own terms, then part way through the journey they are exhausted and realise that there is a greater strength, scale and security in partnership. By not doing it alone and sharing the journey, you are cushioning yourself too – just make sure you do your due diligence, keep focused on your goals and follow your gut when it comes to choosing the right partners. There is an inevitable caution that comes with starting a business, but don’t let caution be confused with common sense, be confident with what it is you’re trying to achieve. In times of economic unease, average has a difficult time – so avoid being average, be brave, determined and bold. 

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ENTREPRENEUR

How to Achieve Maximum Value When Selling a Business When your industry knowledge, entrepreneurial flair or personal circumstances tell you it’s time to sell your business many elements come into play: how it is packaged, marketed and of course, the management of the sales process itself. This will influence the quality of potential buyers you attract, and the valuation you receive.

To generate the best offers for your business here are some key steps to be aware of: KEEP THE OWNER’S MINDSET

It is essential that during any sales process the business continues to function as normal and, ideally continues to grow. Advance planning for staff time is essential for this to happen. Without your on-going entrepreneurship the business you are selling will not hold its original and/or potential value.

CONFIDENTIALITY

Keep the confidentiality of an intended sale and only give information to managers and staff on a need-to-know basis. This will help ensure that the day-to-day running, output and achievements of the business are not disturbed.

WHAT YOU ARE SELLING?

What is it that you are selling? Bigger businesses may need to split up portions of the business for sale. If you are splitting a business to sell only a portion you have to work out the costs associated with the part that is being sold. Put in place costs for required external services (for example, those the company may currently source internally, but will no longer be able to do so after the split and sale). These budgeted costs need to hold up to third party scrutiny and must be in-line with current market prices.

WHAT PRICE IS REALISTIC?

If you are a listed company you need to look at the listed market valuations and sales. If you have a private company review sale prices from the last two to three years to form a benchmark price for your company type, scale and size. External advisers may have better knowledge/access to this information so you might want to engage one.

PREPARATION FOR SALE

If the business is an SME, you will need to identify shareholders’ expenses that are charged to the business and other “one off” expenses that may have been charged to the profit and loss account. These figures may need to be added back to the P&L to establish the recurring profitability of the business. Buyers like to see consistent trends and therefore a sale may need to be managed over a two to three year period taking in to account the industry, the market, managing sales and achieving a targeted growth curve.

PRE-EMPT ISSUES

It’s a good idea to get external legal and accounting firms to undertake due diligence on your company. You’ll then know what may come up when a potential acquirer looks at your records. This kind of work is commissioned by you, and the term of references are such that they can be handed over to a potential purchaser at the right time during the sales process. The genius of this is that it allows you to manage any issues in advance and avoid nasty surprises which could led to price reduction.

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ENTREPRENEUR

TAX POSITION

It is imperative that you understand the impact of any sale on your business’ own tax position; be that corporate and/or personal tax. Depending on the shareholders involved, it may be possible to shape the consideration to enable the tax payable to be minimized legitimately.

WARRANTIES AND INDEMNITIES

In any sale you have to warrant the information to the purchaser i.e. you must be able to truthfully say that it has been prepared on a proper basis and gives a true and fair view of the business you are selling. In addition, if certain items come to light a purchaser may be entitled to make a warranty claim. The sale and purchase agreement will need to have a procedure to deal with this. You will also need to give various indemnities on the taxation position of the company, i.e. guaranteeing that the position of the company is as you say it is. Again there will need to be a procedure to deal with any issues, including a notification process if you need to make any payments as a result.

FORMAL DOCUMENTATION

Ensure you fully understand the “completion statements”. These deal with the cash and other assets within the business and lay-out what happens when the sale is completed. By being fully aware of these you can ensure that everything is in good order on completion. As part of any sale an “information memorandum” will need to be prepared. It is usual to instruct an external party to do this as they will be able to present the information in a way that is acceptable to potential acquirers. Such a document may take six to eight weeks to prepare.

INVEST FOR SUCCESS

Large quantities of information need to be prepared for a sale and it is unlikely that you/the company can handle it on your own. For an efficient sale a project team will need to be created with a project manager assembling all the data and information that the advisers will require. This is a worthwhile investment of time and money. Finally, the key to getting the best deal is keeping the two games running in parallel until the very end: “business as usual” alongside the sale process.  BY CLIVE HYMAN Clive Hyman FCA is founder of Hyman Capital Services offering expertise in due diligence and managing change in business including raising equity and debt capital, mergers and acquisitions, interim management, board management and governance, deal structuring, and company turnaround. See: www.hymancapital.com entrepreneurandinvestor.com |

ENTREPRENEUR

What Influencer Marketing can do for a Business

BY DAVID GABRIELE CEO of Swayy

WHAT DO INFLUENCERS ACTUALLY DO? In very simple terms, Influencers are people who have a substantial, and loyal online following, often in the tens or even hundreds of thousands. The power that Influencers have therefore to sway their followers to buy certain products and services is of immense value to businesses looking to harness digital word of mouth. This is why fashion Influencers like Cara Delevigne can charge up to $300,000 per Instagram post. Influencer marketing works so well because it harnesses digital word of mouth; generating huge brand exposure and ultimately generates sales. Last year over 80% of companies who tried the method said it was successful and 60% of marketeers pledged to increase their Influencer marketing budgets. WHO ARE INFLUENCERS? In simple terms, anyone with authority over, or who has a relationship with another person can have influence over that person/those people. This amplified to thousands of relevant, potential customers can have a significant impact on a company’s bottom line, and they have the results to prove it. McKinsey have confirmed in their own research that marketing-induced consumer-toconsumer word of mouth generates more than twice the sales of traditional paid advertising. HOW DOES IT WORK? In short, Influencer marketing connects Influencers on Instagram, Twitter, YouTube and Facebook to your company. By allowing an Influencer with many dedicated followers to spread your brand message, businesses can generate significant brand awareness, interest, desire and ultimately action to buy a product or service. An ideal marketing method when considering the average person maintains 5 social media accounts, and it is not uncommon for the next generation of customers, those currently in their teens, to spend up to 9 hours/day on social media. 28

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WHY INFLUENCER MARKETING IS SO POWERFUL? It is done by real people rather than corporate brands or advertising executives who consumers know already have a vested interest. From the consumer point of view, it does not feel like you’re being targeted so your instinct is to trust what you see. When someone you follow online mentions how good the food is at a certain restaurant it seems natural. It’s not forced or aggressive advertising such as persistent pop ups. It reaches a relevant and engaged audience instead of being blocked by ad blockers or lost in a sea of ads on the high street. It’s reliable and authentic. In fact, people often seek Influencers for advice on a certain product or place to travel to because they know they have used that product or have been to that place. EXAMPLES Still not convinced? Here’s a real life example. Starwood Hotels partnered with five French Instagram Stars to promote their new hotels in Paris. Alex Closet, a French blogger with over 150,000 followers posted various pictures of her stays at the hotels generating over 17,000 likes and reaching over 500,000 people. The key really is finding the right Influencers to work with though. HOW PEOPLE START DOING IT THE WRONG WAY… Many companies start by contacting PR agencies which are hugely costly or trying to find appropriate Influencers themselves which is immensely time consuming and fraught with danger since it costs as little as £2 to buy fake followers nowadays. It therefore must be done in a safe, controlled manner. This is where Swayy comes in. THE INDUSTRY LEADER IN THE HOSPITALITY SPACE Swayy helps leisure businesses increase their sales through relevant, targeted and scalable Influencer marketing.

Swayy’s fake follower detection system, a world first in the hospitality space, and SwayyScore mechanism helps leisure businesses ensure they get a return on their investment when hiring these brand ambassadors. Their quality control mechanisms ensure that the Influencers are pre-vetted, professional, and relevant to an individual venue or brand. Ultimately the power lies in the relationship the Influencers have with their followers. Swayy works so well because it helps leisure businesses control the entire Influencer Marketing process. Find, evaluate, pay for, analyse and review the world’s most influential people on Instagram. RESULTS One of Swayy’s hotel clients reached over 19.4 million people last year on Instagram. Their web traffic increased over 21% year on year, SEO ranking rocketed, and direct bookings to their hotel website increased by 27%, helping them reduce their reliance on Online Travel Agents like booking.com. The ROI was so significant this year they have doubled their budget to spend on Influencer marketing. BOTTOM LINE Can you afford not to be doing Influencer marketing? That is the key question. Here are a few top tips to help you get started… TOP TIPS • Size is not everything – check their SwayyScore and other key engagement metrics • Let them focus on generating original, quality content • Ensure you specify exactly what brand messaging you are looking for them to disseminate about your venue • Do not ask them to oversell – authenticity is key • Consistency is messaging is crucial

ENTREPRENEUR

How I Became an Artisan Beer Entrepreneur From political advisor to shaking up the Indian and British lager market with an artisan craft beer; this businessman explains how he changed his career

n late 2014, Surj Virk came up with the idea for his Midlandsbased craft beer business, Empress Ale; intending to add fizz to the market with a product designed to offer an artisan alternative to those big-brand lagers you’ll know from the local curryhouse. The start-up entrepreneur’s mission was to develop a beer he’d happily order himself to complement strongly-spiced food. And, after a year of research, testing prototype batches on willing volunteers, and honing Victoriana-inspired labels reflecting the brand’s British-Indian heritage, Surj deemed Empress Ale ready for market. The beer was debuted at a range of local food and beer festivals, and garnered positive reviews from leading industry voices including ale authority Roger Protz. Then came the hard part: cracking the restaurant market. Right from the start, Surj aimed for the (Michelin) stars, and tenacity eventually saw him secure Atul Kocchar’s Mayfair restaurant Benares as one of his very first clients in early 2016. The entrepreneur’s first success was not his last. Surj soon gained further listings with high-end London venues like Cafe Spice Namaste and Jamavar, and also took Empress Ale to the Houses of Parliament as a guest beer. TAKING THE LEAP Yet it wasn’t until late 2016 that Surj was able to quit his day job as a political advisor and turn Empress Ale from side hustle to full-time career. It could have been a disaster, but the gamble paid off. With the extra time and energy he could pay it, Empress Ale flourished further; first showcased alongside big brands like Jaguar, Mulberry and McLaren in the Government’s GREAT Britain marketing campaign, then, in spring this year, scoring investment from ex-Countrywide CEO and Zoopla board member Grenville Turner. Since then, Surj has kept the pedal to the metal when it comes to restaurant listings, working with both fine dining venues like Asha’s in Birmingham, and the hipper end of the market with cool London venues like Rola Wala, Chai Naasto and Calcutta Street. PLAN TO SUCCEED Success can lead to the temptation to roll out too fast, too soon, but Surj aims to maintain a healthy balance between ambition and caution. His strategy for expansion involves building his market within his current distribution areas of London and the Midlands before moving further afield, and slowly widening Empress Ale’s reach from Indian restaurants entrepreneurandinvestor.com |

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ENTREPRENEUR

Images - Squire & Squire

to bars and venues serving all sorts of spice-led cuisines. Listings are all well and good, but they alone don’t necessarily create sufficient brand awareness and visibility. For Surj, it’s about seeking out quirkybut-relevant opportunities to showcase his product – recent sponsorship of London’s The Beauty of Being British Asian art exhibition a case in point. Social media, Surj says, ties in with this sort of activity. Rather than merely handing out free bottles of beer, the entrepreneur launched an Instagram competition inviting guests to share their images from the event, featuring Empress Ale and tagging the brand in posts. ‘Likers’ and ‘sharers’ might not all have tasted the product, but they’re all getting a flavour of what the brand’s all about.

SURJ VIRK’S 5 TOP TIPS FOR START-UP ENTREPRENEURS

What’s next for Empress Ale? Rather a lot, as it happens: scaling up the business, looking at export opportunities, taking the beer to music festivals; offering it as an option for private parties, weddings and events; working with pop-ups and social influencers; and continuing to build up a strong, varied portfolio of restaurant clients. Surj has put his brand on the map; now it’s all about continuing the journey. 

4. Go with your gut Having said the above, it’s also important to trust your instincts when making decisions. I often find that the people who have the most ‘advice’ to offer are salaried individuals in a secure position, and don’t see things the same way as start-ups who risk a hell of a lot on every choice.

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1. Be patient As a start-up, I’ve now realised that almost everything you do takes longer – and is more expensive! – than you initially think it will be.But everyone has to start somewhere, and it doesn’t all happen overnight. 2. Don’t be scared of making mistakes – inevitably you’ll make a lot when you start, and still make them when you are growing, but the important thing is to learn from them and move on. 3. Have a key sounding board It’s great to have someone to bounce ideas off and seek advice from. I realise that not everyone will have someone like our chairman Grenville Turner on board, but his experience, mentorship, advice and vast wealth of knowledge has proven invaluable to me and the company.

5. Believe in yourself and your business If you don’t, don’t expect anyone else to.

The Ultimate Guide on Startup Investing Startup Funding Club insights: How to be a successful entrepreneur and investor in the startup world

THE ULTIMATE GUIDE ON STARTUP INVESTING

Reinventing Early-Stage Investment: The Journey of Startup Funding Club

ince its launch in 2012, the Seed Enterprise Investment Scheme (SEIS) and its older brother EIS have encouraged many investors to finance early-stage companies attracted by the schemes’ generous tax breaks. While investment firms typically rely on managing one single type of investment – angel, fund, or crowdfunding –, the London-based Startup Funding Club has reinvented early-stage investment by developing a unique co-investment model. The new strategy established by the firm allows High Net Worths to choose between investing in startups via its Angel Network or its funds or by combining both modalities. With this approach, SFC maximises the investor’s potential returns while also helping startups maximise the potential of their funding rounds. Launched on the same year as SEIS, Startup Funding Club originated as an angel network. Nonetheless, the company quickly developed its unique co-investment model and launched its first SEIS fund in 2014. Now in its fifth year, SFC co-manages five investment funds and fully manages a sixth. The organisation prides itself in being more than a simple “broker” and sets itself apart from other investment firms by, not only investing directly in startups, but also assisting with the investment process – including due diligence and deal execution. Furthermore, the early-stage investors are also heavily involved in the post-investment period,

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providing support to their Alumni companies and using its network of investors and partners to actively aid in their development. The one-of-a-kind investment model presents numerous advantages for both investors and entrepreneurs. While the latter are able to source their funding more efficiently and receive support from SFC's team of entrepreneurs and business angels, the former have the opportunity to coinvest alongside experienced angels of the award-winning SFC Angel Network and Startup Funding Club itself.

"SFC has invested over £13 million and boasts of a diversified portfolio of more than 100 businesses" Investing at an SEIS/EIS stage also gives investors the chance to gain exposure to innovative products and disruptive technologies while the companies are still in its early days, meaning that they can have a greater influence on the management of the business and help ensure they get the right support from the beginning. Investors also benefit from having a wide range of investment opportunities carefully sourced by SFC to choose

THE ULTIMATE GUIDE ON STARTUP INVESTING

from, with fund investors receiving exposure to a diversified portfolio assembled by the fund managers. Being based in one of the largest startup hubs in the world, SFC profits from an exceptional deal-flow and reviews 2,000 applications for funding every year. The high demand for its services has forced Startup Funding Club to become very meticulous in its selection process, onboarding only the best candidates. The huge amount of applicants is also key in building SFC’s portfolio, allowing it to have great diversification. As previously hinted, the relationship between Startup Funding Club and its investee companies does not finalise once the investment has been made. Startups are backed by the organisation and angel investors through their journey, with SFC often sitting at their board meetings. The young businesses also go on to become part of the SFC Alumni Network, enabling entrepreneurs to meet and support each other. Despite its young age, many investors and entrepreneurs have already relied on Startup Funding Club’s model and expertise. The organisation’s angel syndicate currently has over 300 active angel investors and, to date, SFC has invested over £13 million and boasts of a diversified portfolio of more than 100 businesses, which include high growth companies such as Onfido and eMoov. Investors and early-stage companies are not the only ones that have put their trust in the firm’s coinvestment model. SFC counts on an extensive network of partners which include the London Co-Investment Fund. Startup Funding Club’s track record has not gone unnoticed by organisations as the UK Business Angels Association either. The firm has been recognised as

a leader in the early-stage investment world, with the SFC Angel Network being named the Lead Syndicate of the Year award in 2016 and finalist for the same title this year. Further evidence on SFC being a referent in the UK startup scene is its finalist status as Best Angel Syndicate and Best SEIS Investment Manager at the Growth Investor Awards 2017, which confirms its proficiency in its two investment modalities. This accolades bear testimony to the quality of the deal-flow and the strong activity and diversity of the SFC Angel Network and the SFC Funds. Having proved the effectiveness of its unique co-investment model, the group has now launched its first solo-managed SEIS/EIS fund, the SFC Angel Fund, which embodies the organisation’s core principles. Despite having originated as a small-scale angel network, Startup Funding Club has evolved into much more. With the launch of its first fund and subsequent establishment of its innovative co-investment model, the firm soon became a stand-alone in its industry which has yet to be replicated. The system has proven advantageous for investors and entrepreneurs alike, who benefit from being part of an award-winning organisation that caters to the needs of both parts. The unique co-investment strategy has helped put SFC in a leading position in the UK’s early-stage investment world, and set the firm as an example of innovation for aspiring entrepreneurs that may one day ring Startup Funding Club’s doorbell. 

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THE ULTIMATE GUIDE ON STARTUP INVESTING

In search for unicorns A billion dollar business investors hope for

unicorn is a term commonly used in tech that describes a company worth at least $1 billion and that got to this valuation within only a few years. To become a unicorn, a company needs a certain level of investment (in millions of dollars) and revenue (in hundreds of thousands of dollars), but it doesn’t have to be profitable. CB Insights identified 197 unicorn companies across the globe of a collective value of $679 million. It’s not a surprise that most unicorns, over a half, were founded in the US, where the capital market is much bigger and more open to risks and investors almost expect to back businesses with ‘unicorn ambition’. The worldwide giants like Facebook, Uber and airBnb are the most well-known examples of multibillion dollar startups. United Kingdom is in the third place together with India (8 unicorns each) and behind China (45 unicorns). The British unicorns to mention are: Funding Circle, Transferwise and Skyscanner. For some tech businesses and investors in those businesses, achieving a valuation of $1B has become a matter of honour and a goal in its own right. With such approach no doubt there is a tendency of overvaluing startups in order to create a perceived increase in value and attract new investors and more publicity. According to GP.Bullhound, there were 47 tech unicorns in Europe in 2016. “European Unicorns 2016. Survival of the fittest” report gathered more interesting facts. US unicorns are on average valued at 47 times their revenues, whereas in case of European unicorns it is 18 times. Performance of European businesses is on average better than their American counterparts. In terms of revenues European super startups made $315 million compared to $129 million in the US in 2016. At the same time, US unicorns tend to raise twice as much as their EU ‘peers’. Over 30% of European companies raised around $250 million. In the US this size rounds were case of over 60% of the ‘multi-billion-dollar’ businesses. These statistics clearly show the more cautious approach taken by European investors, who are looking for more evidence of potential success and future dividends. GP.Bullhound also reports that 60% of analysed companies (37 out of 47) were profitable. But this comes at a price of slower growth. The average compound Annual Growth Rate (CAGR) of unprofitable unicorns was 141% compared to just over 49% for those making profit. Among profitable unicorns are companies like: Asos, King, Just Eat, Skyscanner and Rightmove. Unicorns that are not generating profits include: Spotify, Hello Fresh, Funding Circle, Transferwise and Delivery Hero. It is clear that unicorn companies are not looking for early exits, but are aiming for long-term growth. Less than half of 34

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European unicorns have reached a liquidity event (sale or IPO) and it took them an average of eight years, according to GP.Bullhound. Most angel investors who back companies with unicorn ambition will not have them in their portfolios by the time they get to the unicorn status (if it happens). Arriving to $1B valuation requires serious investment that normally comes from large VCs that are often keen on simplifying cap tables and buying shares of original investors. For many angels this is the moment of an attractive exit and 3-10x returns. Some angel investors will have no choice but to sell their shares to facilitate VC deal. Those who decide not to sell but wait for the big moment, take a lot of risks, as the road to unicorn status is equally rocky and uncertain. First of all, raising massive amounts of money is a challenge, has to be done almost regularly and therefore takes time. A unicorn that is not profitable may not get any more support from investors who cannot cash out. Then it runs out of money and gets into a danger of dying or being forced to accept tough terms from new investors, described sometimes as sharks. Additionally, existing investors will be always pushing for a higher valuation when it comes to the new funding rounds, and these expectations don’t make it any easier to the CEOs. Secondly, the more the time between a start and an exit, the more chances of getting into trouble. Bigger companies are more exposed to the public and if something goes wrong, the message spreads across faster than in the case of other businesses. We all heard stories of Theranos, Uber and Dropbox. Many startups aspiring to become unicorns will need a lot of time and might fail on their way, but they can fail even after receiving the unicorn status. One of the examples of failed unicorns is Powa Technologies. A well-funded, British fintech company once valued at $2.7B that went into administration in early 2016 causing huge losses to investors including Wellington Partners. But there are more examples, most notable are from the US – for example a technology firm Jawbone that raised $951m worth of investment and had the peak valuation of $3B. Finally getting to a liquidation event is more difficult. Unicorns cannot just exit. Acquisitions are tricky because bigger companies aren't going to buy them at their high valuation prices. Of course, it’s not impossible, and we have seen very interesting examples like Sky Scanner (the Edinburgh based company was acquired by CTrip, the largest travel company in China for $1.4B in 2015) or Whatsapp (bought by

Facebook for $19b in 2014) – but let’s say it clearly – these kinds of transactions do not happen often and are exemptions. Equally difficult is the IPO, a lengthy and complex process. Often an IPO won't value unicorns as highly as their last private round so investors risk losing money. An example to mention is Square; a California based merchant services aggregator and mobile payment company, aiming to simplify commerce through technology. Their last private round reached $6B valuation in 2014, then they IPO’ed at $3.6b a year later. Many unicorns do not IPO because of the risk of lower valuation than the last funding round. However, investors in startups should be still interested in unicorns even if they do not invest in them. Existence of unicorns and businesses aspiring to become one, mean occasions for sale of smaller startups. In this way some entrepreneurs and investor can execute quick and attractive exits. Growth by acquisition is one of the most popular strategies among European unicorns. It’s a quicker way to acquire knowledge, customer base, talent and technology and one of the best ways to increase the valuation. Markit Group, the leader in this category, completed 33 acquisitions in 2016; Just Eat bought 24 companies, Delivery Hero 18 and Rocket Internet and Yandex both made 16 acquisitions in 2016. Many exists happen without much publicity and they are often attractive to founders and investors. But we hear mainly about those big acquisitions like Hungry House (British delivery service) that was sold to Just Eat for over £240M in 2016. Before that, Just Eat acquired also takeaway.com for an undisclosed price and spent £94.7 million to acquire a number of competitors in the world: Spain's La Nevera Roja, Italy's PizzaBo/ hellofood Italy, Brazil's hellofood Brazil, and Mexico's hellofoodMexico. From an early stage investor point of view – unicorns are attractive and needed, but they do not have to be necessarily in their portfolios, to add value. Unicorns get their status because they often provide superior product or service and therefore make customers' lives easier of better, but they also create new opportunities and promote better business models (take airbnb and shared economies). Companies that aspire to be unicorns can provide early stage investor with attractive exit through VCs. In the UK these exits are even more attractive if investment is made through SEIS/EIS scheme. Finally, unicorns are able to buy smaller startups at attractive prices. 

"Growth by acquisition is one of the most popular strategies among European unicorns. It’s a quicker way to acquire knowledge, customer base, talent and technology and one of the best ways to increase the valuation"

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A Guide to Startup Terminology

AB C DE F GH J I K ANGEL NETWORK

BUSINESS MODEL

A network of experienced private investors, like SFC Angel Network, that have access to investment opportunities and can invest in them inAtoZlace to go for startup companies looking for seed funding.

A plan for the successful operation of a business, identifying sources of revenue, the intended customer base, products, and details of financing. Wrong business model might kill even the best business with the most innovative product or service!

CO-FOUNDER

DUE DILIGENCE

EXIT STRATEGY

A person who, in conjunction with one or two other individuals, is instrumental in starting a business, charity or some other enterprise. Most investors prefer startups with two or more cofounders.

Analysis an investor makes of all the facts and figures of a potential investment. Can include an investigation of financial records and a measure of potential ROI. DD is an integral part of investment process and is done every time a company raises new investment round.

An entrepreneur's strategic plan to sell his or her investment in a company he or she founded. An exit strategy gives a business owner a way to reduce or eliminate his or her stake in the business. All entrepreneur and investors hope for profitable exits. Exit strategy should be a part of the general business plan as this is, most of the time, the end goal.

FRIEND & FAMILY ROUND

GO-TO-MARKET STRATEGY

HANDS ON INVESTOR

Founders of a startup typically raise their first round of investment, usually around £10,000 to £150,000 in total, from people they know. It’s an easier start and often ensures more comittment.

GTM strategy is an action plan that specifies how a company will reach customers and achieve competitive advantage. It provides the blueprint for delivering a product or service to the end customer, taking into account such factors as pricing and distribution. Even the best product is worth nothing without efficient GTM plan!

Means an investor that is actively involved in day to day activities of the business and often holds a large portion of shares and has great influence over company decisions and management strategy.

INTELLECTUAL PROPERTY (IP)

“J” CURVE

KEY PERFORMANCE INDICATORS

Intellectual property is a broad categorical description for the set of intangibles owned and legally protected by a company from outside use or implementation without consent. Intellectual property can consist of patents, trade secrets, copyrights and trademarks, or simply ideas. Investors should always look for IP in businesses as it’s an important part of the overall business value.

"J" curve is a graphic presentation of a typical (though simplified) startup journey in terms of revenues/growth. It shows how revenues start, decrease and grow over time and the point of time called ‘the valley of death’ when most startups fail.

These are often numerical metrics like revenue, number of active users, number of customers that detrmine how well a company performs. KPIs will be different for different type of businesses and sectors and can change over time as the business moves from one stage to another. Every business should set and monitor its KPIs.

The words that you should know when you invest or look for funding

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LEAD INVESTOR

MILESTONES

NON-DISCLOSURE AGREEMENT

A venture capital firm or individual investor that organizes a specific round of funding for a company. The lead investor usually invests the most capital in that round. Also known as "leading the round." Startup Funding Club is often the first equity investor and therefore the lead investor that helps with the funding strategy and with basic terms (Shareholders Agreement).

Business milestones are like checkpoints for entrepreneurs, signaling that a business venture is thriving and growing. Milestones should be in the business plan and are often determinging if an investment is done or not.

An agreement between two parties to protect sensitive or confidential information, such as trade secrets, from being shared with outside parties. Signing NDA is important when a business already created value and is at certain stage of development. NDA at the concept stage is worth nothing.

OPTION POOL

PIVOT

QUUU

An allocation of shares that will be used in the future to reward people who have significant impact on the success of the company, for example talented employees. It is an important tool that makes companies more attractive.

If a startups business model isn't working, the CEO and team may chose to pivot their perspective and vision for the company towards more lucrative pathways. This can entail re-imagining their assets and talents, thinking more broadly about the customer problems they solve, as well as accessing growth capital. Pivoting the business is not unusual and it’s a way to avoid failure or increase chances of success.

A startup businesses from Startup Funding Club portfolio that you should check out yourself!

ROI

SEED ENTERPRISE INVESTMENT SCHEME (SEIS)

TRACTION

This is the much-talked-about "return on investment." It's the money an investor gets back as a percentage of the money he or she has invested in a venture. Investors look for high ROI and startups investment should provide them with 5-10x return.

A tax scheme created by the British government to incentivise high net worth individuals to invest in early stage startups. SEIS provides a number of attractive benefits including 50% tax back!

UNIQUE SELLING PROPOSITION

VALUATION

WIN WIN

The factor or consideration presented by a seller as the reason that one product or service is unique in a world of homogeneous competitors. USP can be in product design, materials used or in the way product is sold.

The process by which a company's worth or value is determined. An analyst will look at capital structure, management team, and revenue or potential revenue, among other things. For early stage startups with no history, valuation is often determined by the sypply/demand power (what investor is willing to pay, how much entrepreneur is willing to sell at).

A situation in business where all parties involved are happy and satisfied about the way they work. Real and succesful entrepreneurs always look for win-win solutions in relationship with customers, business partners, employees and investors.

XENIAL

YES, WE CAN!

ZOMBIE

A greek adjective used to describe a friendly relationship between two parties. We might not use it much in English, but its meaning is so important in business! Business is all about friendly relationships!

Positive approach that entrepreneurs should show while doing business. It means aiming high and trying to find solutions to questions.

A startup that is not trading and not developing but remains active at Companies House. Investors prefer businesses to fail so everyone can move on, than to keep startups artificially alive.

Traction is evidence that your product or service has started that “hockey- stick” adoption rate which implies a large market, a valid business model and sustainable growth. Startup at each stage of fuinding should show some kind of traction. Even the seed funding requires a proof that the business has chances of success.

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THE ULTIMATE GUIDE ON STARTUP INVESTING

SFC reveals:

The life of a startup Getting a startup off the ground is never an easy task. Very often it is experienced as a leap into the unknown. To help the beginner entrepreneur we asked Stephen Page, the CEO of Startup Funding Club to talk about the journey that a typical entrepreneur can expect. This article explores the several stages a new company faces on its way to success and provides some tips and tricks.

THE LIFE STAGES OF A STARTUP Every startup faces the same five stages of development. Every business starts with an idea, which forms into a plan of action and later on becomes the action itself. For most entrepreneurs the end goal is to exit the business and on the way of doing that they often raise funds. The first stage every developer, entrepreneur, inventor or anyone who wants to start a business experience, is the idea phase. A business concept sprouts from the entrepreneur’s background or can be a result of a creative spirit with a backof-the-napkin idea. Very often, there is more than one person involved in the thinking process. The next step is making a plan of action. By asking themselves ‘How are we going to do this?’ entrepreneurs build an action plan to guide them and present their idea to an audience. During this stage, the founders seek advice from experts and answer questions about their motivation, their financial background and the environment in which they will be working. After the plan of action comes the actual doing. Because the company is still in its infancy, the entrepreneurs will keep their day-to-day job and work for the startup during the weekend. Important to know is, since their company is slightly growing, they will need to refine and edit their plan of action. They will seek more advice on entrepreneurship and start to look for accelerator networks like Seedcamp or Accelerator Academy. These networks help the startups to get off the ground by offering relevant advice and support. Next step towards a successful business is raising money. The startups convince investors to provide money for the company in order for them to sell their products and grow. To get these investors interested in their idea, the companies make a business plan with a little help from their advisors or accelerators if they take part. Funds for the company often begin with friends and family, the people they know and who know them. When the first signs of success are getting obvious, the startup will try to get funds via angel networks or seed funds like Startup Funding Club. The funding at this stage will often go with use of SEIS and EIS schemes for which businesses have to apply. Important in this stage is to actually sell a product and get validation from people in the target market. At first, most companies will see losses as the revenue of the company will not cover the costs. After some time, which can take from a few months to even a few years, the company will break even which will later on evolve into profits, as the revenue will exceed the costs. The final years before exit, which may take up to 5 to 10 years, will be scaling and expanding, building business position and maximising customer base and profits. During the final stage, the company will start looking

for potential exit in order to bring return to its founders and investors. The exit materialises through a trade sale or IPO. FUNDS RAISED AT EACH STAGE It can be quite tricky to know where to find funds or investors and to know how much money is necessary to get the startup moving. The first funds will very often be provided by friends and family or a startup loan. This initial funding tends to reach anything between £10,000 and £50,000. Next, the startup can look for SEIS funds which lead up to £150,000 after which they do EIS round of about £500,000 (can go up to £10M). The final funds come from series A (and further) and gets the business into the millions. A textbook case on the amounts of funds you can expect in every stage is Onfido. The five year old company has acquired millions of pounds through funding. The first fund the founders received, came from Oxford University. The £25,000 fund provided them with a financial basis to further their investigation. Then they received funds of £150,000 in two rounds in the SEIS funding phase via Startup Funding Club. The EIS phase provided them with £250,000 which brought them to the series A and B where they respectively received £2.5 million and £16 million. STARTUP DO’S AND DON’TS To get through the startup phases and fundraising successfully, a beginner entrepreneur should mind these do’s and don’ts: DO • set realistic goals and recognise when you have achieved important milestones. • remember who the consumer is and focus on a narrow niche and target market. • form a good team of motivated people who bring both equity and transparency. • take valuable, relevant and useful advice from experts. DON'T • spend everything at once. As a startup, you cannot predict the future, so save for those rainy days when your income is less than you had anticipated. • underestimate starting a business. Always have a worst case scenario in the back of your head to be prepared for setbacks. • overestimate customer acceptance. Most of your potential clientele will not feel the same about your product as you do. Living by these do’s and don’ts and keeping the phases in mind will function as a stepping stone to get startups moving on their way to success.  entrepreneurandinvestor.com |

THE ULTIMATE GUIDE ON STARTUP INVESTING

Different ways of funding a business You are solving a problem big enough, that a large number of people are willing to pay you for solving it. There are numerous ways of funding but you are unsure which is the best and why. Before we go into exploring the possible funding routes(Pros & Cons) it’s important to always ask yourself — Do we really need to raise funding? — Will our startup cease to exist if we don’t raise? More importantly — Can we achieve at least 80% of the desired results without funding? Limits drive innovation. Having limited resources forces you to become creative and come up with different ways to validate, build, and grow your business. In fact, Growth Hacking was born based on the latter premise.

HERE ARE WAYS TO FUND YOUR STARTUP:

1. PERSONAL INVESTMENT:

You can fund your startup with your savings and/or by having a part-time job. • Pros: Maximum investment process speed. Keep total control of your company (100% shareholder). Enjoy total freedom. Future investors, partners, co-founders, and employees appreciate that you believe in your venture and you put your money where your mouth is. • Cons: Unless you are loaded, personal investments are usually limited and may be not enough to get your startup off the ground. There is greater risk of the venture going bust leaving you with no savings. The latter might put your close circle (family, friends) at risk too.

2. FFF OR FAMILY, FRIENDS, AND FOOLS:

You could always borrow or raise (in exchange of equity) funds from your family and friends. • Pros: You have a close relationship with them and there is mutual trust. The funding process can be really quick as fewer papers are signed in comparison to raising from sophisticated investors. • Cons: Your friends and family are most likely to be unsophisticated investors and thus unable to provide support, advice and network of key people. Also, there is the risk of damaging your relationship especially if the venture goes bad. It is hard to avoid blending personal with professional matters with your family members.

3. STARTUP LOANS:

You can get a loan from banks, local authorities, government organizations and small business associations. Here is a list of startup loan resources for UK-based companies. • Pros: Terms and conditions are clearly defined, the interest is usually fixed, and you have access to resources such as a network of mentors and key people. As a founder you are forced to do research, define your Unique Selling Proposition, due diligence, and create a thorough business plan to access a startup loan. • Cons: Market validation and proof of concept are most likely to be required to secure a loan. You will need to provide promising sales and earnings reports. You might also be limited in where and how you can spend your money as you will be required to provide an agreed detailed analysis of expenditures.

4. GRANTS:

Money you don’t have to pay back. if your startup involves research in an innovative technology (InnovateUK, Horizon2020) you could get grants by winning business/ startup competitions if your startup involves research in an innovative technology (InnovateUK, Horizon2020) and more.

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• Pros: It is free money. You do not have to pay it back. Securing a prestigious grant can be used to prove to future potential investors, partners, and your clients that your business has potential. • Cons: It is a long process that takes time and there is always the possibility you will not be eligible. Your startup needs to match certain criteria which might result in having to deviate from your original focus and end up with a different product than originally intended.

5. ANGEL FUNDING:

6. VENTURE CAPITAL:

7. REWARD-BASED CROWDFUNDING:

8. EQUITY CROWDFUNDING:

Angel investors are affluent individuals who inject capital for startups in exchange for ownership equity or convertible debt. Some angel investors invest through crowdfunding platforms online or build angel investor networks to pool in capital. • Pros: Angels are usually passionate about your venture. More often than not, they are experienced entrepreneurs and sophisticated investors thus they can provide you with support and guidance. They have a network of key people and they invest in early stage startups willing to take greater risk than other investors. • Cons: Having an angel investing in your company is followed by a close relationship as they usually want to get involved (sometimes too involved). You give away control, and equity. Equally, an angel could be disengaged and not willing to support you if they lose their interest or they are not experienced enough. Financing that investors provide to startup companies and small businesses that are believed to have high and long-term growth potential. Early Stage Investment Funds specialize in early stage startups: idea, prototyping, MVP, early traction, growth. They usually manage small funds and they have networks of angel investors that coinvest. They are typically involved in the Seed round and invest anywhere between 25,000 up to 1M depending on the type of business and the size of the fund. Later stage (Series A,B,C,D etc) VCs usually invest millions in established businesses with a good track record of sales and growth. • Pros: VCs can provide large amounts of funds (larger than angels) and have networks, mentors, and resources to help your business achieve high growth and scale. • Cons: Like angels you are giving up equity and control of your company to an extent that will maximize their returns. Big decisions are now not entirely up to the founder. VCs will probably intervene if they believe you are not doing a good job. Businesses or individuals can make a pitch to raise capital through online crowdfunding platforms. One of the most popular platforms is Kickstarter.com. This type of financing is more suitable to businesses that cannot get access to Small Business loans. Ideal for B2C startups who want to validate the market demand. • Pros: Keep control of your company as you do not have to give up equity. Test that there is demand for your product while you minimize risk and reach your audience straight away to get feedback and increase awareness. • Cons: To succeed in crowdfunding you need to put the right amount of effort and time to create a compelling story, build your brand, produce a video, and market it properly. At the same time, less than 44% of the projects on Kickstarter were successfully funded (2014). Is the process whereby people (i.e. the ‘crowd’) invest in an early-stage unlisted company (a company that is not listed on a stock market) in exchange for shares in that company. A shareholder has partial ownership of a company and stands to profit should the company do well. • Pros: Business founders do not have to give away a large amount of ownership, thus they can retain significant control. Investors do not have to be sophisticated to invest since most equity crowdfunding platforms prescreen startups and do the necessary due diligence, making it easier for your startup to get funded. • Cons: Most investors are less likely to be sophisticated and as they usually acquire a small percentage of your startup might not be involved enough to support your venture. Equity crowdfunding is time consuming and competitive which may require an initial investment to produce a high standard campaign with appropriate media content (explanatory videos, press releases, etc). There is no right or wrong way of getting your startup funded. It depends on the stage of your startup, the type of the business, the strategy goal, and of course on the founders’ personal preferences. 

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Startup trends

The past and the future of new businesses Over the past 20 years we have seen booms of startups following the same trends and growing in a similar way or in similar industries. This was a result of specific needs or opportunities arising from the changes in society, new discoveries or adoption of technologies that were new or that became available to wider public.

E-COMMERCE, MARKET PLACES AND SAAS Going back to the end of 90’s and beginning of 00’, the Internet era really kicked off and easy access to it stimulated digitalisation of services that so far were available in a traditional way. This is how e-commerce started. eBay, Amazon and Photo Box are the best examples of businesses that were getting offline activities into online world and providing customers with better and faster solutions. Having an online store was back in time a good business and often a good start of the entrepreneurial journey. Then building an online market place started to be even better business and can be considered as the second generation of ecommerce. Popularity of programming and creation and adoption of new programming languages helped entrepreneurs to digitalise other services than only buying and selling and sell them in a form of a SAAS (software as a service). BIG DATA A new big opportunity arose on the back of these developments. Growing Internet traffic and online activities provided big quantities of precise data. This is how ‘big data’ entrepreneurs saw their chance on the market and were opening ‘big data’ startups. They came in all shapes and flavours but generally had a form of a software collecting, analysing and managing all sort of information. For long time ‘big data’ was a buzz word that not everyone really understood, but that was very attractive and secured investment in many businesses. Some ‘big data’ startups made it, but many of them struggled to monetise and failed. Today ‘big data’ is not hot any more, but collecting and using data is considered a standard way of developing businesses. APPS The next big thing came with the wider use of smartphones and how these devices became powerful and started to assist us in a daily life way beyond calling and texting. This is when 42

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THE ULTIMATE GUIDE ON STARTUP INVESTING

the app era started. All buddying entrepreneurs came up with hundreds of ideas for new apps. Apps did make many people wealthy! Finding iOS and Android developers started to be a problem, but getting quick investment, was fairly easy. Not any more. Today no one wants to invest in apps. The market is saturated and it’s clear that getting people to download yet another app is a big challenge and would require giant marketing budgets. Moreover people expect apps to be free or to be an integral part of various services they get outside of their smartphones. SHARED ECONOMY The trend that is already passé but had huge impact on social changes is called ‘shared economy’. It all started with airBnb and stimulated a new generation of startups that were trying to build platforms of other things that can be ‘shared’ – not only homes, but parking spaces, storage, tools and even clothes and food. It’s not an easy space to make money on and only few survived and grew including big names like Blablacar and Uber. The next one might be HiyaCar, that enables car owners to hire their cars without handing over the keys! So there are not that many ‘shared economy’ businesses, bt those few that made it, had a huge impact on business and contributed to the growth of startups providing supporting services. INTERNET OF THINGS Adding Internet to the telephone turned out to be a good idea. There was no reason why other devices couldn’t be connected too – many entrepreneurs thought.... This is how IoT (Internet of things) was born. Today anything not only can but also should be connected to the Internet. From home cameras, microwaves and washing machines to home garden and doors – all this is becoming more and more standard in our lives. There is still some room for new businesses that want to make money in this space, but it has already started to be crowded and more challenging. AI AND MACHINE LEARNING Now when our devices are connected and many services can be done online, we expect them to be smarter and smarter. This was the start of the today’s trend to apply machine learning and artificial intelligence. To put it simple – these are highly sophisticated mathematical algorithms programmed in a way that they can acquire, interpret, analyse and save data and automatically add and create new information and the basis of what already exist, using pre-programmed logic. There are hundreds of applications of AI and machine learning. One of them, trending now are bots. The role of bots is to collect

data and use it in a sophistically programmed way by giving the precise and quick output consumers expect. Bots will help us with flight bookings, recruitment and even insurance and will get better as they work more and more. AI and machine learning will have application in almost every aspect of life and will have various forms. From apps like Siri, through Facebook chat bots to devices like Alexa and Google Echo. It’s very difficult to see when the saturation point for AI can come – the space for improvement and further development is limitless. AUGMENTED REALITY AND VIRTUAL REALITY We will see new startups using always improved AR (augmented reality) and VR (virtual reality) technologies. These technologies are getting better and better, but the big change will come with their application in various sectors. Augmented reality is nothing else that an extra layer of information visible in real world thanks to specially designed hardware and software. It will include glasses, apps, watches, gloves but there is no limit to what it can be, particularly if we think that all our devices are going to be ‘connected’ and smart. Virtual Reality is supposed to take us into totally different worlds. Startups developing in this space will provide better devices (lighter, smaller, more efficient) that can emulate all sense. At the moment we use mainly picture and sound, but soon it will be smell, feel of touch, feel of movements etc. Other startups will use VR to built software. Not only will it be games, but also interview simulators, software to practise various skills and finally artificial worlds where we are going to meet other people. AR and VR is the long term future that has already started. BLOCKCHAIN The last but not the least is will be a wave of startups that use blockchain technologies. Blockchain provides a reliable, quick and cheaper infrastruction that allows users to exercise various actions. Additionally block chain technologies like smart contracts, can automatically trigger new actions based on previously programmed assumptions as they are met. Blockchain is still mysterious and sometimes is seen as a buzz word (see ‘big data’!) but it a proven technology. It’s mainly connected to bitcoin and other cryptocurrencies, but these are only the very first applications. There is no doubt that fintech is and will be the main sector where blockchain entrepreneurs will try to make money, but blockchain is going to revolutionise also other sectors including legal and logistics. To summarise – we expect that the new business will develop in the following areas: AI and machine learning, AR and VR and blockchain. The first group will be companies that will be improving the technologies and making them more efficient, better and easier to use. The second group will be startups applying these technologies in various sectors. We will see new hardware and software that will be more and more seamless, smarter and incorporated into daily life. Startups that will fit into these trends will be more likely to find market and obviously, investors! 

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THE ULTIMATE GUIDE ON STARTUP INVESTING

A short guide on startup business valuation

ricing a startup company is necessary in the investment process. However, most startups struggle to evaluate their ventures when they approach investors for the first time. If it came too easy to an entrepreneur, then it is highly probable that the valuation he had in mind was wrong. Usually, there is little or no history, little or no traction, company’s achievements up to date might be difficult to quantify if there are any. Comparing to similar players (or unicorns as we have seen!) or looking at the market and company potential (even through NVP) make no sense in case of an early stage business. Startup valuation is driven mainly by supply and demand power between thefounder and investors. It’s still of little help though for an entrepreneur who approaches investors for the first time. At Startup Funding Club, we have seen thousands of businesses and made over a hundred deals. This experience enables us to understand where the companies are in their journey and how they position themselves on the valuation axle. The factors that should be taken into consideration are: • Business Planning - how good (clear, detailed, realistic) it is. • Team – how many people, what skills, attitude, time and experience they bring; • Attractiveness of the market and potential exit – how much money can be made and how soon. • Product development – MVP, working prototype, beta, ready product; the more is in place, the better.

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• Traction – how much value has been created in terms of partnerships, user base, and sales. • Cash already put to your business from founders and through loans or friends and family. Early stage companies in their first 2 years of trading should be looking at: • Up to £450k – the initial MVP is done, the business plan is clear, the team is almost complete, the market is attractive and provides good opportunity for revenues and exit, • £450k – £750k – working prototype in place, first users/customers, team full time with the key skills in house, some cash already put in the business, very attractive market with good chances of making money; • £750k – £1M – very attractive, booming market, first revenues in place, complete team, first investors lined up. • £1M+ – revenue making business with strong traction and credible financial forecasts, team is complete, grants and other funding in place; Obviously, the above is just a rough indication and often valuation might go up or down based on very specific circumstances, like unusual skills that are difficult to find, team experience and personal connections, IP, impressive sales or market situation. We always advise entrepreneurs to be very flexible and agree the final valuation with their lead investors. Lack of flexibility may mean a waste of time and potentially lead to loss of investment and business opportunity. Valuation should never be the deal breaker for an entrepreneur who needs capital in order to grow the business. 

THE ULTIMATE GUIDE ON STARTUP INVESTING

How to get started with investing in startups “Angel investing” means investing in companies in their start-up phase in return for equity (shares in the company). Angels invest very early on in the hope that these young ventures will grow and generate a significant return in the future when they are acquired by a larger player or if they become a publicly traded company.

nvesting in start-ups is becoming increasingly popular and accessible in the UK. The attractiveness of that market has come from two main factors: the success of a number UK start-ups built over the past two decades (ASOS, Just Eat, Zoopla, Funding Circle etc.) which are showing the way for many more to come and the supportive policies implemented by the various governments over the same period to encourage investment in ventures. The policy which has had the biggest impact has been the implementation of the Enterprise Investment Scheme (EIS) in the 1990’s and of the Seed Enterprise Investment Scheme (SEIS) in 2012. Both schemes reward investors in high growth companies with generous income tax reliefs (worth up to 72.5% of the investment under SEIS) as well as an exemption of capital gains tax on returns. These schemes have proven to be extremely popular with private investors who every year invest over £1.5bn into high growth ventures under SEIS and EIS. Combine this with a low return environment in “traditional” markets and this explains why we are seeing an increasing number of investors willing to get involved with early stage investments. But the early stage investment market is still relatively young and obscure to non-initiated investors. So how do you get started with investing in startups if you are new to this market? Your first option is to invest through online equity crowdfunding platforms (ECF) such as Seedrs, Crowdcube and

Syndicate Room which showcase dozens of investment opportunities from startups looking to raise equity funding from the public. The advantage of ECF websites is that they are convenient and accessible to anyone with investment tickets starting at £10. You can therefore build a small portfolio of start-up investments relatively quickly. However, you should be aware that the risks are extremely high: the number of failures on these platforms is high (possibly higher than reported currently) and despite the tax reliefs you should remember that your capital is at risk. It has been reported that the due diligence conducted by some of these platforms is minimal and that the reality of some of the businesses raising funds can be very different from the picture presented on the website. Remember that these platforms act as “brokers” and do not proclaim to conduct extensive due diligence or to support the businesses after they got funded. If you consider yourself to be a more sophisticated type of investor looking to build a portfolio of investments with tickets of more than £5,000 per company, then you should probably think about joining an angel syndicate. Angel networks act as filters for investors: they review dozens of investment opportunities and select the best ones which they then present to their network of investors through pitching events and online platforms. Investors are invited to participate in the funding round and to also take part in the due diligence and governance of the company

post investment. Investing alongside experienced angel investors will teach you a lot about the start-up world and give you some reassurance that proper due diligence has been conducted and that post investment support of the company has been put in place. A third option to get started is to invest through a start-up fund. There are a number of “SEIS/EIS funds” which gives you exposure to a portfolio of start-ups. The fund manager handles the selection and the management of the investments and you receive the same tax benefits as if you had invested directly in the companies. Fund investing is therefore a good option for beginner investors or those looking for tax-efficient diversification. When looking at start-up funds make sure that you that the charges are low and transparent as they can vary greatly between providers. You should also look for diversified funds in order to spread your risk across different sectors (technology, life sciences, consumer products etc.). See how open the manager is about its selection process and investment strategy and if they offer investors to be “close” to their portfolio through regular reporting, events etc. At Startup Funding Club we have taken this a step further and give the opportunity to investors in our SFC Angel Fund to selectively invest in some of the portfolio companies which they find the most interesting and even take a board seat and become investor director if they feel like they can actively help. 

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THE ULTIMATE GUIDE ON STARTUP INVESTING

All you need to know about SEIS and EIS

very startup and growing business needs capital to develop. Over the past two decades, the UK has developed a unique ecosystem to make it easier for emerging businesses to access that essential “seed” capital. An important part of that action has been the implementation of generous tax incentive schemes to encourage individuals to invest in early stage British companies. Investing in early stage companies can offer large rewards but comes with an associated high level of risk which can put off even the most sophisticated investors. These tax schemes were therefore designed to boost the return potential of early stage investments and provide downside protection in case of a loss. These tax incentives have been a resounding success with more than 30,000 companies benefiting from them and receiving every year over £1.6bn worth of investment under the schemes. So what are these schemes, how do they work and what makes them so attractive – this is what we will try to explain in this article! SCHEMES BACKGROUND The first scheme to be launched was the Enterprise Investment Scheme (EIS). The UK government introduced it in 1994 to boost investments in private companies by offering generous income and capital gain tax reliefs to private individual investors. Over 26,000 companies received funding under EIS amounting to a total of £15.9 billion, according to HMRC’s latest progress report from April 2017. The popularity of the scheme is still very high with almost half of the companies which succeeded in raising EIS funding in 2015/2016 doing so for the very first time. Following the success of the EIS, the government decided in 2012 to go one step further to help the youngest (and riskiest) companies to also receive investment. A new scheme called the Seed Enterprise Investment Scheme (SEIS) was introduced. The SEIS is basically the little brother of the EIS: it

works in a similar way but focuses on the youngest companies and provides even more generous tax reliefs to investors. Despite only celebrating its fifth anniversary, SEIS has also proven to be success: since 2012, 6,515 young companies have received a total of £608 million under SEIS. The scheme has been a key driver of the entrepreneurial boom that we are currently witnessing in the UK as it allows entrepreneurs to accelerate the first stages of building their company. BUSINESS’ REQUIREMENTS In order to qualify for the SEIS and EIS investment schemes, a business has to be UK registered and operate a “qualifying trade” (anything apart from things like property development, legal or financial services etc.). Businesses also have to show that they are young, small to medium size companies. A company has to have less than 250 employees and less than £15m of gross assets to qualify for EIS. Requirements are stricter for SEIS which was designed specifically for startup companies: companies have to have been trading for less than 2 years, have less than 25 employees and less than £200k of gross assets. SEIS qualified businesses will typically be at their early stage, sometimes pre-revenue and therefore quite risky for investors. Businesses can raise up to £150,000 under SEIS only which the cap on EIS is £5m. Businesses can apply to HRMC for pre-clearance and receive an “advance assurance” letter which confirms their SEIS/EIS eligibility (but does not guarantee it). Entrepreneurs always must make sure that they still meet all the criteria before accepting any investment and should work with competent accountants who can help them navigate the rules as HRMC will take a deeper look into the business and the investment when the company requests the SEIS and EIS certificates on behalf of its investors. This tax benefit is only available for an issue of ordinary shares which does not give investors any preferential rights. entrepreneurandinvestor.com |

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THE ULTIMATE GUIDE ON STARTUP INVESTING

"The main attraction of these schemes is the income tax relief that investors receive on their investment" INVESTORS’ BENEFITS There are six main tax benefits for investors. •

Income Tax Relief The main attraction of these schemes is the income tax relief that investors receive on their investment: under EIS, qualifying investors receive 30% of their investment back from HMRC against their income tax bill. Every year, they can invest up to £1,000,000 under the scheme and receive up to £300,000 back from the tax man. The relief is even higher in the case of SEIS as HMRC will pay back 50% of the investment against the income tax paid up to a maximum investment of £100,000 per year. • Capital Gain Tax Exemption The second attraction is that investors will not pay any capital gain tax on disposal of their SEIS or EIS investments provided they have held the shares for at least three years. • Loss Relief In case the investment fails and the company is liquidated investors are eligible for a loss relief in the form of a “loss relief” of up to 22.5% or 31.5% of their initial investment for SEIS and EIS respectively. This means that between the Income Tax and Loss reliefs, high rate taxpayers investors only risk to lose 27.5% of their investment under SEIS and 38.5% under EIS. This is a huge downside protection provided by HMRC. SEIS and EIS also offers a range of additional tax benefits which can be attractive depending on your situation such as a CGT Reinvestment Tax Relief, CGT Tax Deferral and Inheritance Tax Relief. RECEIVING THE TAX BENEFITS In order for investors to claim these tax benefits, the company that received their investment will need to contact HMRC and provide its investors with a certificate allowing them to claim the reliefs themselves directly via their Self-Assessment Return. Investors should be aware that this process can take up to 6 months after their investment. It is important to mention that the tax benefits depend on your personal circumstances and so all investors are always advised to seek professional advice! Despite the undoubted success, SEIS and EIS schemes are currently under the review of the UK Treasury. The new budget that will be announced on the 22nd of November should clarify if if any changes are to come. There are voices that schemes’ reliefs will be decreased and that SEIS and EIS eligibility will be limited. At the same time, many industry experts think that boosting the schemes, in particular SEIS, is vital for the further growth of innovative British businesses in perspective of potential Brexit implications. 

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THE ULTIMATE GUIDE ON STARTUP INVESTING

Angel investor profiles Startups with a groundbreaking idea often pursue their dream with help from angel investors. Such business angels not only provide funding, they also pass on their entrepreneurial knowledge and expertise to get the startup off the ground and on its way to success. In this article, four investors of Startup Funding Club’s network tell about their experiences with angel investing. YING WANG Before Ying Wang made her first angel investment in 2015, she had been active in cross-border M&A transactions related to China, multinational investment banks, the Chinese industrial conglomerate, and a boutique advisory platform. Wang started investing in startups, because she wanted to help small businesses grow by offering funds, her expertise, and knowledge of the Chinese market. At the moment, her portfolio consists of 4 companies that amount to a total of £400,000. Wang is intent not to follow entrepreneurs who value their business too highly and who don’t address investors’ concerns during the investment process. A fellow investor she looks up to is Elon Musk, in whom she already saw the entrepreneurial drive, talent, and motivation when they were university classmates. What are you looking for in startups? I look for startups that have a good management team and have a functional board of directors. The product, which should have a defensible IP, should also have the potential to become the market leader. Given my Chinese background, I also like the products to be relevant for the Chinese market. Can you think of any deal breaker that stopped you from putting money into a business you liked? The most important deal breaker for me is the mindset and/or the lack of experience of the management team. Also not being able to deliver a track record can definitely deter my investment, as well as low barriers or entry into the market. The threat of competitors outsourcing the startup forces me to stop investing in the company. What is the most difficult part of angel investing? For me, that’s saying no to struggling entrepreneurs who are desperately in need of funding. I find it hard to reject them, because I really want to help them become a successful business. Is there anything you have learnt while investing in startups? I have learnt four things. First of all, the devil is in the details. Due diligence, therefore, is key to success. Secondly, when you invest, you don’t just invest in the idea. You invest in people as well. Furthermore, I find it difficult to trust entrepreneurs who never made a mistake. Unless they have failed or made a serious mistake, I hardly ever believe they can build a successful company. The last thing I’ve learnt, is that implementation is king. Entrepreneurs must be willing to actually put their promises into action. What advice can you give to anyone who plans his/her first angel investment? I want to tell them to enjoy the journey, as the end may not always be what they wish for. So I would like to urge investors to be involved with the company and build relationships with the management team. That way, they can stay close to the growth of the business and learn about it, which is key in entrepreneurship and investing. Another piece of advice is to only invest in sectors within your field of experience. Never invest in a startup because other people do. It may be a good idea, but other  entrepreneurandinvestor.com |

THE ULTIMATE GUIDE ON STARTUP INVESTING

investors’ criteria are most likely to be different from yours. Also, if your eye falls on a startup, don’t rush into investing. Take the time to evaluate the startup and to be 100% sure about the company, because it may be a long journey together. And a final piece of advice: be prepared to lose every invested penny. If you don’t want to risk the loss, don’t become an angel investor.

MARK TAYLER Before making his first angel investment in 2009, Mark Tayler worked in the fund management industry as head of the technology department and co-founded two businesses. Although the investment didn’t turn out the way it was supposed to, Tayler decided to continue investing and learn from his mistakes. His motivations for investing included escaping the dull corporate life, learning about becoming a successful entrepreneur and using his skills and experiences to help startups. For some time, he was on both sides of the table; he was raising money for one company while investing in another. Tayler’s background in technology is reflected in the startups he chooses. He prefers to invest in companies with a £1 million to £2 million valuation. His portfolio includes 12 startups of which 9 are still running and 1 exited successfully. Tayler has expressed his admiration for Slack, a business which is the perfect example of how a startup performed an excellent execution of an average idea. What are you looking for in startups? First of all, the team. It’s the most important aspect of any startup. I will choose good execution of an average idea over bad execution of a fantastic idea any day. I also think that the balance between potential growth and risk matters. I have seen some great teams with great ideas, whose valuations were too high, given the level of risk associated with investing in early stage startups. It’s really important to make sure you invest at the right time and at the right valuation. Otherwise, you run the risk of picking winners, but not achieving the returns you need to, given the higher risks. Can you think of any deal breaker that stopped you from putting money into a business you liked? High valuations or high salaries. I’ve seen several businesses that I was interested in, but either their valuation was too high or the base salaries of the founders was unrealistic. As a founder looking for investment, I believe you need to be prepared to ‘sweat’ and not expect your investors to pay for the lifestyle you were once accustomed to. The best entrepreneurs are those who find a way to live on minimal salary. Not only does that demonstrate they are prepared to do whatever it takes, it’s also a good indicator that they have an appreciation of the value of the investment and that they are less likely to run out of funds early. What is the most difficult part of angel investing? Finding the time to review and select investments. There is always a good supply of potential opportunities to invest in, but finding the time to attend events and properly review business plans can be quite hard. Is there anything you learnt while investing in startups? Entrepreneurs are always eternally optimistic and every startup claims to be different or unique, which is rarely true. That’s why investors should take the time to research the opportunity properly. Another thing I learnt is that the exit is a key component in terms of achieving your returns. Investors spend a huge amount of time focusing on when and where to invest, while the primary objective is to make a return. The timing and type of exit becomes even more crucial then. It is possibly the stage an angel investor has the least control over. Yahoo, for example, sold to Verizon in 2016 for $4.6 billion, which is slightly less than the $5 billion Google offered in 2002. It is however a mere 11.5% of the $40 billion Microsoft offered back in 2008. What advice can you give to anyone who plans his/her first angel investment? Firstly, like with every new activity, you need to accept that you are a novice, so be prepared to make mistakes and accept that it may take time to work out what’s right for you. Whether you’re a successful senior executive or a self-made wealthy entrepreneur, when it comes to investing your own money into other people’s startups, it’s a whole different ball game that takes time to properly understand. Secondly, if you’ve just seen a fantastic investment opportunity, take your time! I can assure you there is another equally fantastic opportunity next month and the month after that. 50

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THE ULTIMATE GUIDE ON STARTUP INVESTING

RAJ SHARMA Raj Sharma started his career at a very young age, selling watches and other electrical goods on the market on weekends and during school holidays. The first venture he got involved in, was in the fashion and textile industry. Since then, he has been building his startup portfolio, which now includes 16 businesses. The only condition he sets is that the startups are at a very early stage. Instead of following fellow investors when deciding who to invest in, he gets his inspiration from his surroundings. The one entrepreneur he would follow, however, is Bill Gates. Not only because he is one of the most successful entrepreneurs in the world, but also because of Gates’ goodwill. What are you looking for in startups? I look for four important things when investing in a startup. Firstly, the idea. I look at whether it’s innovative or if it has already been done by competitors or in different markets. If so, I do research on whether it is working there and assess whether I think it has the potential to work for us as well. Secondly, I look at the team of the company. I usually take them out for a drink to find out their personalities. I like good, honest, and genuine people who don’t mind letting down their guard occasionally. Thirdly, I examine the first investors of the company and what they have to lose. Very often, they are the founders themselves or their family. If a family member has invested their life savings into the company, founders are less likely to walk away when they come across the first hint of trouble. The last thing is timing, which is crucial for any idea or business venture. It’s not about being the first or last to market, but rather about if the public are ready for the product or the idea. If not, it will just not work. Companies like Just Eat for example were certainly not the first to market. Entrepreneurs had been trying the idea for 20 years and it just didn’t work. Taking an exciting idea and just doing it better can often lead to better results. Can you think of any deal breaker that stopped you from putting money into a business you liked? Founders that take too long to decide or who keep moving the goal posts are certainly less attractive to investors. I like to compare it to a relationship. Ideally, it should be a match made in heaven. Imagine a girl or guy taking the time to decide whether they prefer you to their friends or associates. They ask loads of questions, and then continue to meet with all of them going back and forth, playing them all against each other. I'm not saying that this will not work, but in an ideal world, your partner decides quickly and you get a strong gut feeling that they are the right one. What is the most difficult part of angel investing? The most difficult part is the lack of income or return coming in. If you can do it while keeping your day job, it certainly helps. However, if you are a full-time angel investor like myself, you will most likely not see any return for the first 3 years, mostly due to SEIS allowance - hopefully in my case, a huge increase in valuation on the equity you hold. Since my first startup investments some 2.5 years ago, my investments have risen on average about 20 times my initial investments. Is there anything you learnt while investing in startups? Yes, I have certainly learnt a lot. I have learnt that there are lots of good, clever people from all walks of life and different nationalities with a real hunger and desire to do well, both for themselves and their loved ones. They want to make their lives better, make a real difference to the world, and leave their mark for generations to see. I also learnt that if money is your only desire, you will never have enough or be happy! In life, one should always aim to be the best at what one chooses to do, whether you are a teacher or a postman. For me, being an entrepreneur is about the success and making lots of money. Because the more money I can make or help the companies I am involved in make, the better I am. All I would then hope and pray for, apart from using the money for my or my family’s personal needs and desires, is that God gives me the wisdom to spend it wisely and hopefully to do good and help others as well. What advice can you give to anyone who plans his/her first angel investment? I would say: Try to invest in something you have a particular knowledge or interest in or, if possible, get advice from anybody who has expertise in that particular field. In theory, if you just put something on the back of a seasoned investor who has a good rate of success, you can't go wrong. I would honestly advise any tax payer to use their SEIS allowance. It’s a no-brainer! If anybody would like any help or advice regarding startups or investing, they can connect with me via LinkedIn.  entrepreneurandinvestor.com |

THE ULTIMATE GUIDE ON STARTUP INVESTING

ALAIN MANDY Alain Mandy, Executive Vice President for a global Asset Manager, has been working in Finance and Asset Management for 20 years. Over the years, he has lived and worked in Belgium, the US, Spain, and Luxembourg, but settled down in London 10 years ago. His interest in investments was fuelled by his job in asset management and his admirations for startups. It eventually led him to his first SFC event in 2014. Investing in starting companies was a great way for him to be part of something exciting and to potentially make money in case of an exit. Since 2014, he has added seven startups to his portfolio, of which FilmDoo, the global online streaming platform for foreign movies combined with viewer experience, is his favourite. He prefers tech companies that are very early stage with a valuation of maximum £1 million and founders who already have experience and put their own money into the business. What are you looking for in startups? The idea and the timing of it are most important to me. An idea could be too early or the world could simply not be ready for it. We need to make sure we are fixing a problem with a disruptive idea, and that the world is ready for it. Furthermore, the team is very important. We need entrepreneurs and leaders who can convince someone of the business opportunity and their business plan. I prefer a business and sales person who teams up with a technology expert. Finally, I look at the potential revenue and the cost management. I make sure their monthly burning rate is at the minimum. Funding could be challenging, so we don’t want the founders to spend all their time looking for funding. Can you think of any deal breaker that stopped you from putting money into a business you liked? I always look at disruption, competitors, cash flows and the market need for a new solution. I also look at the entry barrier and some kind of expertise and IP. Finally, customer experience is key. If the founders and their team do not fit the above, I will not put my money into the business. What is the most difficult part of angel investing? The most difficult part is when the startup is operating below expectations and target. On the one hand, you don’t want to put too much pressure on the founders. You should give them some space to run their business. On the other hand, you want to protect your investment and help them. But sometimes, the founders don’t want investor involvement and don’t provide transparency. That is a big mistake. Is there anything you learnt while investing in startups? I’ve learnt a lot about other people, but also about myself. I made some mistakes. Today, I would not have invested in some startups. You learn from your mistakes and you do stuff differently. What advice can you give to anyone who plans his/her first angel investment? It is a fantastic, but risky experience. The due diligence process is very important and I always encourage collaboration with other investors. A team is always more than the sum or the individual. I also strongly encourage investing through Startup Funding Club or Angel networks as the selection is already done in advance. 

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Healthy business habits. How to build (and keep!) a successful company

aving a successful business is every entrepreneur’s dream. But how do you build a successful company and - most importantly - how do you keep it that way? The answer to that question is to rely on a strong team. A good team consists of individuals of different backgrounds and cultures who use the same habits and practices. The key to success, therefore, is to make yourself and your team familiar with these habits:

• Refine the business plan and direction constantly. As your business grows, your business plan and direction should change as well. Therefore, entrepreneurs have to innovate regularly and motivate their team to implement and work towards those new goals. • Take advice, but not just from anyone! Viewing your business from another’s perspective can shed light on business aspects which may need some improvement. Be careful to only take advice from experts though. That way, you have the highest potential to receive useful and relevant information. • Strive for involvement and equality with and amongst your team. Mind yourself and your team members not to get carried away by the prospect of

more wealth and power. Balance is key to work together successfully. • Take notes and write down all aspects of business life. Even though this habit is often overlooked, keeping notes and records in the form of corporate governance and board meetings is crucial in maintaining a successful business. Written information can contribute to incorporating good practices in the business’s daily routines. • Be patient. Just like Rome wasn’t built in a day, your business will need some time to grow and become successful Getting a startup off the ground is a long and frustrating process every entrepreneur has to go through.

Make sure everyone absorbs these five simple habits and you’re one step closer to building and keeping your successful business. 

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THE ULTIMATE GUIDE ON STARTUP INVESTING

How to find good startups at an early stage. When you think about the plethora of investment opportunities out there it can be overwhelming. There are so many options it is difficult to know which are the potential stars. The whole point of venture investing is to identify high potential startups early on and invest before they actually take off. By doing this, you assume more risk, but the potential returns can make it worthwhile. DEALFLOW

Investors often review thousands of opportunities before selecting where to allocate their capital, so having access to high quality deal flow is key in building a strong portfolio. Here are some good approaches to improving your deal flow: • Network, network, network. There is a growing number of startup focussed networking opportunities emerging all over the country. Use these as an opportunity to get your name out there as an investor and meet lots of potential startups along the way. • Join an angel network. If you’re not interested in building your own deal flow or just don’t have the time, join an angel network and tap into theirs. An

PROCESS

Now the tough decisions begin. In order to figure out which companies to invest in, most investors have a structured diligence process. A typical process will contain the following steps: • Screening. The investor spends 0-30 minutes reviewing and researching an opportunity to see if it sparks interest, matches their criteria and could fit well in their portfolio. • First Meeting. If the company looks good on paper, the investor will do a first meeting either in person or via call. • Research. If the first meeting goes well, the investor will do some more research and ask the founder a number of additional questions. • Follow-up Meeting(s). If the research phase goes well, the founder is invited to a follow up meeting or meetings to discuss deal specifics, terms of investment and future plans.

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angel network or syndicate, is a group of investors who regularly meet to discuss, review and invest in startups often through a pitch night, demo day or similar.

• Send great deals to other investors. Angel investors and VCs are always looking for high quality deal flow. If you send a few winners their way, they are likely to return the favour. • Add value. If you build a reputation of adding value, the best founders will often come to you. This can be anything from niche expertise, a few introductions or just a coffee and a shoulder to cry on.

• Due Diligence. At this point the investor may commit to invest, conditional upon satisfactory completion of due diligence. The investor may create and demand completion of their own due diligence process or accept the process set by a lead investor, fund or founders themselves. Your investment funnel for a single calendar year might look something like this: 2000 screened, 500 first meetings, 300 further research, 150 follow-up meetings, 25 due diligence, 10 investments. The alternative option is to join an angel fund or syndicate and invest alongside a group of investors on a deal by deal basis – outsourcing the deal flow to a syndicate lead or fund manager. It is recommended to still meet the founders at least once before investing to ensure your ambitions align.

THE ULTIMATE GUIDE ON STARTUP INVESTING

THEORY

Deal flow is now in place and you’ve created a filtering process that best suits you, but what are you actually looking for? Here are some things to think about when reviewing startup investment opportunities: • Founders. It takes great people to build great businesses. What is the founding team composition and strengths? What are the founders' backgrounds? How long have they known each other? What are their individual strengths and weaknesses? • Problem. Investors must take a critical look at a business from the perspectives of the end customer. Would the product or service be something they really need today and help them solve big pain points with established budgets? If so, proceed full steam ahead. If not, you could end up investing in a low revenue business which will most likely need to pivot into a bigger market opportunity. • Solution. With every problem comes a plethora of potential solutions. How much better is it than existing solutions? How much cheaper/more expensive? How long will it take to bring the solution to market? • Market. Is the target market big enough for a high growth startup to flourish? How competitive is it? Is it fragmented or is there a few dominant players who could cause problems in the future?

• Business Model. How does the business make money? Do the unit economics make sense? Have the founders proven they can sell the product service at the suggested price? • Funding. How much capital is required to bring the product to market and scale? Is this the only round of funding required? Is there a risk that the company may fail to raise further capital in the future? Is your equity position likely to be diluted? • Red Flags. Have the founders been completely honest throughout the process? Are they fully committed to this business or do they have backup options? Has a big competitor recently made a move into their niche? It is unlikely you will ever find the perfect early stage business; however, it is important to consider these key factors before investment. Early-stage startup investments are risky. Most startups fail and it is difficult to pick the winners at an early stage, with little data to support your intuition. Each investor tends to weigh these differently. Some would prefer to invest in a stellar team with a good product. Some the opposite. A stellar team and a stellar product would be ideal, but that's unsurprisingly rare. As an investor it is important to decide what factors are most important to you and you’ll sleep well at night, confident you have built a portfolio of potential stars. 

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Top 10 reasons why startups fail fast Starting a new company, as thrilling as it may seem, is not an easy task. Very often, entrepreneurs make some mistake which eventually leads to the downfall of their company. We spoke with the Startup Funding Club team to find the most common reasons why startup business get into trouble and eventually fail.

WRONG BUSINESS MODEL Having a good idea is not the only condition to build a successful business. A business model is crucial to know where the company is. Making a wrong business model therefore, can lead to targeting the wrong audience or setting the wrong goals. The ability to adapt that business model or pivot the focus of the business in the right direction could be a life-saver. SLOW REACTION TIME The key to building a successful company is being able to respond the external changes. Via knowledge and constant monitoring, entrepreneurs are able to react to the ever changing competitors’ actions and markets. If they don’t, the business owners are very likely to make quick, illogical and irrational decisions, which will endanger the company. TEAM MEMBERS STAY ON FOR TOO LONG Very often, entrepreneurs are reluctant to admit they would better hire an expert to take over a part of their job. However, putting an expert on a specific category or segment of the business, could lead to great success. SPEND MONEY TOO QUICKLY No matter how appealing it may seem, entrepreneurs should withhold themselves from spending their investor’s money all at once. Not only will they have nothing to rely on in financially troubled times, future investors will lose trust in the owner and will think twice before giving them a substantial amount of money again.

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INTERNAL CONFLICTS Internal arguments are never fruitful for the company’s workings. Not only will individuals be distracted from the startup’s operations and vision, they will also get demotivated by the poor working environment. Needless to say these struggles could lead to the failure of the business in the long run. TOO MUCH TIME SPENT FUNDRAISING Even though fundraising is essential for startups, entrepreneurs shouldn’t lose sight of what is most important: selling their product. In order to do so, they have to spend time developing and refining idea and generate customer awareness for their product to sell. That way, they can generate revenues and avoid competitors sweeping in and gaining market share. NO MARKET FOR THE PRODUCT It goes without saying that in order to sell a product, a business needs people that are willing to buy the product. No buyers means no cash, and no cash means no funds to continue operations. NO FOCUS ON REVENUES Many entrepreneurs are focused entirely on product building and they lack commercial drive that will let them get this product in front of potential customers. Sometimes it’s a fear of selling, sometimes it’s a believe that only perfect product can make it. A startup company becomes a real business only with real sales, even if the product still has to improve. WRONG FUNDRAISING STRATEGY Unexperienced entrepreneurs with ill or no professional advice might make errors while looking for investment. This includes a number of things that can directly or indirectly lead to failure: raising too little or too much, setting up the wrong valuation (that can make next funding round impossible and lead to lack of financing) and attracting the wrong investors. ARROGANCE The last, but not the least reason why startups fail, is the arrogance of some entrepreneurs. Very often, they are too proud to seek advice from experts. In doing so, they risk taking uninformed decisions which can have a negative effect on the success of the business. Although being the founder of a startup will always come with ups and downs, the entrepreneur taking notes of these ten reasons is several steps closer to building a successful company. 

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Making business a success Top three rules that successful entrepreneurs follow at any business stage The journey from a business concept to a successful exit is long and full of obstacles. Even the best entrepreneurs cannot be ready for everything and cannot know what new challenge will come. There are three top rules that, consciously or unconsciously, successful business owners always follow – no matter how much funding they raise, if any, and no matter where they are in their entrepreneurial journey – on the top or on the bottom – on the very beginning or steps away from an exit. RULE NUMBER 1: KEEP FINANCIAL DISCIPLINE Successful entrepreneurs know their numbers and they monitor their businesses on a very regular basis. They have control over their accounts, but they normally work with accountants or financial officers to do it right. They understand the rules of cash flow and know their profits and losses inside out. They also keep their fixed costs reasonable low – this means no high salaries and no fancy offices before their businesses get stability and market position. Finally they work on healthy margins and are able to adjust their businesses in order to keep the margins high. RULE NUMBER 2: GROW AND KEEP THE CORE TEAM People come and go, but keeping the most talented members in the company will create strong core of the business that will eventually add stability and will give fundaments to the longevity of the company. That’s why having an employees’ option pool and sharing the equity among team members is so important. A stable team that is dedicated to the business is a must and successful entrepreneurs are able to recognise it and implement into their strategy. Developing the core team means also distribution of decision-making power and of the profits and relying on the opinion of an expert. RULE NUMBER 3: ADAPT WHEN NEEDED Businesses have to react to the changes in their environment. If they are not doing well, they have to change the way they do business or even pivot their business models. If they are successful, they have to be aware of potential competitors that spotted market opportunity. Adaptability means not only reactiveness but also acceptance of things that cannot be changed or that make part of the game even if they cost money – for example professional fees that have to be paid to expert (in opposition of doing things themselves). Finally, adaptability means acting upon given circumstances. Sometimes things go the other way – not how we wished or plan, adaptability allows to quickly change the plan and go ahead under new terms. Sticking to these three golden rules is a guarantee of success and every entrepreneur should keep them in mind. 

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British, digital and on the fast track startups to watch

ver the last decades, digital products and services have become increasingly popular, prompting an almost uncontrollable boom of the economy. Of all Western European countries, the UK has experienced the biggest impact on its GDP since the rise of the Internet and digital products and services. A comparison of the value of the digital economy now and five years ago proves that the economy has increased almost 20%, with a valuation of a staggering amount of £170 billion in 2016. UK DIGITAL BUSINESS CLIMATE The UK has already produced very successful digital businesses over the years in several sectors. The housing sector, for example, has seen a boost with two online businesses, eMoov and uPad. Both companies facilitate the process of respectively selling and letting houses by providing fair cost solutions, making high street agents needless for people looking to sell their houses or landlords wanting to find tenants. Also travelling has been made much simpler and cheaper thanks to the Internet. Instead of going to expensive travel agencies, people can now search for everything – hotels, flights, museum tickets, car hire, etc. – online. Although the concept of online travel agencies already existed for a while, Skyscanner revolutionised the sector providing an unbiased online global travel search site, which is above all free of charge with only one mission: to inspire travellers around the world. Next up for innovation was the financial sector. Even though a lot of banks – if not all of them – had already switched to online and mobile banking, one problem still wasn’t fixed according to Taavet Hinrikus and Kristo Käärmann. Both paid a lot of hidden bank fees having to transfer their money from Estonia to the UK and back. That’s why they came up with a beneficial system for themselves which later grew to become TransferWise. The online service allows businesses to send money over more

than 300 currency routes at the real exchange rate across the entire world. BOOMING STARTUPS Even after years of growing, the digital economy still has room for innovative startups to become as successful. Given the fact that 8 British universities belong to the global top 20 tech universities, it’s no surprise there is a new digital business founded every hour in London alone. With the UK government’s help and assistance of companies like the Startup Funding Club, budding entrepreneurs enter a true paradise to get their revolutionary tech ideas off the ground. Onfido has proven to be such a success story. The five-year-old company was founded by Oxford graduates Husayn Kassai, Eamon Jubbawy, and Ruhul Amin. Onfido has been building its position step by step with support of Oxford University Accelerator, and then Startup Funding Club business angels who put first serious money in, followed then by other investors including Crunch Base and Wellington Partners with today’s total investment exceeding £60M. Starting out in a tiny office in London their business grew into a globally successful one with offices in London and San Francisco with international clientele including ZipCar, HelloFresh, and Couchsurfing. The groundbreaking idea that led to their success was doing background checks for companies. Helping other businesses find out who they are hiring or already have working in the company, opened the door for several awards. Their latest prize was the 2017 Highest Investment Award, given to them by the Mayor’s International Business Programme for their significant growth, both at home and abroad. In times of social media being all around us, Quuu found its way into the market. Founded in 2015 by Daniel Kempe and Mathew Spurr, the online platform helps businesses grow a relevant social media following. Based on the fields of interest, it sends hand-

reviewed suggestions to the customer’s social profiles via their Buffer or HubSpot account, which the customer can then either improve manually, or leave up to Quuu to post. A promising piece of software is CustomSell. Founded in 2014 by Dan Stearn, the sales and marketing programme allows small businesses to grow by automating their customer acquisition and engagement. By writing email campaigns, tracking the moves of web visitors, and marketing the customer’s business on every channel, CustomSell guarantees to create a sustainable and significant increase in new business in the first two months of use. There are more and more entrepreneurs that see opportunity in digital economy and are taking advantage of the fact that digital product and services can scale faster and serve better certain needs. Karen Adams, founder of the Prosperous Shop is one of them. Her goal is to bring innovation to the ecommerce sector that now can be already considered as traditional and settled down. She’s using her retail experience to come up with a tool that presents business data back to clients in a format that is easy to read and quick to grasp. It will recommend to its customers what actions they should take to maximise growth prospects. Furthermore, the founder swears by a give-as-you-grow culture. The retail merchants will be able donate a share of their profits to a charity of their choice and use their social media to engage customers via promotions. In other words, merchants can work together with their retail customers for the greater good. Through the Prosperous Shop is still to launch, we already anticipate it as ‘digital startup to watch’! In conclusion, The UK digital industry shows no signs of slowing down, making it the perfect place for new startups to thrive. The enduring possibilities make it an intriguing sector for investors to look into if they are interested in exciting, revolutionary technology and ideas.  entrepreneurandinvestor.com |

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What are the implications of Brexit for tech entrepreneurs and investors? There is no question that the UK has until now been riding the technological wave better than any other country in Europe. The UK has developed one of the most active startup ecosystems in the world thanks to its historic strengths such as the largest concentration of higher education institutions in Europe as well as more recent policies such as the development of specialist tech capabilities, state of the art infrastructure and supportive policies for SMEs.

ondon combines these assets better than any other city in Europe and it is no surprise to see London’s “Tech City” now being the third-largest startup hub in the world after the Silicon Valley and very close to New York. The UK has already generated more “unicorns” (technology companies valued at more than $1bn by private markets) than any other European country, across various sectors such as financial services (Funding Circle, Transferwise), e-commerce (ASOS), real estate (Zoopla) or even food delivery (Just Eat). This has spurred a wave of entrepreneurship across the country which is evidenced by the record number of companies being created in recent years: there were 5.5 million private sector businesses trading at the start of 2016 with more people than ever considering starting their own company across various sectors. The biggest tech companies such as Google, Apple and Facebook have recognised this trend and made important investments over the past couple of years to expand their

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operations and presence in London. This leading position is also confirmed by the amount of venture capital investment in the UK: according to KPMG, in the first half of 2017 only, over $2.5bn of angel and venture capital financing was made in the UK, against only $1bn in Germany and $900m in France in the same period. In May 2017, Londonbased virtual reality firm Improbable hosted a $500 million+ funding round, making it one of the largest venture deals ever conducted in the UK. However political uncertainty since the Brexit vote is high and has affected a large number of assets as evidenced by the fall in the value of the pound. The question that both entrepreneurs and investors now face is how will Brexit affect this leading position of the UK as a tech nation? The main concern is to see Brexit making the UK less competitive in the global race for talent. The government has made it “very clear” that “free movement of labour ends when we leave the European Union in the Spring of 2019” and it is still unknown what restrictions

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on immigration will be implemented following Brexit. One can hope that existing EU workers living in the UK should be unaffected by Brexit and that their situation will soon be clarified. However huge uncertainly remains on the future flows of talent coming from Europe. According to techUK, 18 percent of the sector’s three million workers are foreign born, with one third coming from EU countries. UK tech companies have partly been successful because of their ability to attract the brightest European minds and might will lose out to competitors if a hard Brexit meant that they are no longer able to do so. Applying the current Points Based System used to hire non-EU workers would prove very difficult for startups. The costs, complexity and time involved in applying for visas would be particularly challenging for smaller tech companies that don’t have the HR and financial resources to manage these processes. In any case it is clear that the UK will need to rely more than currently on its worldclass universities to produce homegrown graduates with valuable tech skills. The second concern has to do with the trade and regulatory barriers that will likely be created by the exit from the Single Market. Businesses rely on retaining access to the market’s 500 million customers and tech startups are no exception. It is particularly true in the case of fintech (financial technology) companies whose ability to “passport” their service across the EU is an essential part of their business plan and expansion strategy. The UK has created a fantastic environment for the development of these financial technology companies and one can only hope that Brexit will not reverse this trend and that transitional agreements will be secured to avoid a “cliff edge” for these businesses. The falling value of the pound has been a challenge for tech companies: in addition to making UK salaries relatively less attractive, a lot of UK tech companies outsource some of their technical development work to Eastern Europe and Asia which they pay for in USD. Offshore developers are now being comparatively more expensive to hire which hurts the cashflow and growth of tech companies. Last but not least - the final concern that technology entrepreneurs and investors have is around the availability of capital. The British Venture Capital industry is often celebrated for its size and activity but few knew until recently that they relied so much on public funding. The two biggest contributors of capital to VC funds are indeed the British Business Bank and the European

Investment Fund. The European Investment Fund (EIF) – whose main shareholder is the European Investment Bank - was founded in 1994 to operate programmes to increase access to finance across Europe and commits its capital through other private banks and funds. The EIF currently invests close to £1bn per year into British venture capital funds and is therefore the single biggest source of capital for the industry: in a recent report, the UK government estimated that 34% of later stage venture capital investments came from EIFbacked funds. A potential withdrawal of funding from by the EIF would be a major issue for the availability of capital in the venture capital industry and the British Business Bank will have to significantly extend its current venture capital investment program and scale-up its operations to make good the shortfall. Grant funding is also a key source of capital for innovation and the ability to access European research framework programmes like the €80 billion Horizon 2020 is essential for the development of new technologies. According to the Royal Society, between 2007 and 2013, the UK received €8.8 billion from the EU for research, development and innovation (against a contribution of just €5.4 billion for these activities). As these programmes are often open to non-EU partners such as Norway, Switzerland and even Turkey there is a good chance that the UK will still remain a beneficiary. It should be noted that there have also been some positive developments caused by the Brexit vote such as an increasing number of American and Chinese tech investors looking at UK technology companies thanks to the cheaper currency and a sense that good deals can be done in companies with global ambitions. There should therefore be hope that the UK government will find pragmatic solutions to these challenges in the interest of all businesses and tech companies in particular. Taking an optimistic perspective, Brexit could also be an opportunity to secure stronger partnerships with countries like India and China which are becoming increasingly important sources of funding, talent and innovation. The robustness of the UK innovation ecosystem will certainly be put to test but it is the nature of entrepreneurship to defy the toughest circumstances and find opportunities in turbulent times. After all some of the biggest technology companies such as Amazon and Facebook built their foundations in periods of huge economic uncertainty. 

"There should therefore be hope that the UK government will find pragmatic solutions to these challenges in the interest of all businesses and tech companies"

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The good, the bad and the ugly exits A business exit means a liquidation event and generally is considered as a sale of the shares at certain value. Investors and business founders hope that the sale value will be as high as possible and a multiply of the original price. As we know, most ventures fail and this can happen at any stage. End of the business is in a way an exit – a bad exit, sometimes an ugly exit… THE GOOD EXITS – are the exits that angel investors always hope for, bringing them 5 – 100x ROI. These are normally trade sales or IPOs. Some UK examples include: • Swiftkey - this London based startup that makes keybord apps for Android and iOS devices was acquired by Microsoft for $250M in cash in February 2016. • Magic Pony - Twitter acquired this artificial intelligence startup for around $150M in June 2016. • Camden Town Brewery – this craft beer brand was sold to AB InBev for around £85 million. • Skyscanner - Edinburgh online travel portal and air ticketing specialist sold in the end of 2016 for £1.4bn to the Chinese travel giant Ctrip. • LoopUp – a Shoreditch based software business that floated on AIM Stock Exchange in August 2016 with valuation of £40M and raised £8.5M after IPO.

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THE BAD EXITS – the bad exits are those where a company simply fails on its way to glory. Statistics are cruel and say that half of all businesses stop operation after a year and only 10% are still alive after 5 years. Failures are normally silent. UK investors who go through SEIS/EIS scheme get tax loss relief. Some of more famous examples of bad failures are from the US and concern businesses that had real potential and interesting products, raised funds but did not make it: • Lily – a robotics startup from California that aimed to produce autonomous, waterproof drones with great photographic capabilities. Lily had pre-orders of $34m and funding of $15m but did not manage to execute ambitious plans and shut down in January 2017. • HomeJoy – a US startup that operated also in the UK. Their business was to connect home owners with cleaners. The company had likes of big players like Y Cpombinator and Google Ventures and raised $38milion from various investors. The businesses failed in 2016 after 6 years of operation. • Rdio – a business founded by Skype founders started robustly with good product and support of a number of investors. It closed down in 2016 – just didn’t manage to get enough of already saturated market.

THE UGLY EXITS - the worst type of exit happens quickly after the raising a large amount of money or with companies that got to a certain level and seemed to be in a fairly stable position. We decided to call them ugly because of large amounts of money raised and because the failure was clearly the fault of bad management. • POWA Technologies – A London based businesses producing software for commerce, e-commerce and mobile. Once a unicorn valued at $2.7B had to close down in February 2016 after burning $200M of investors’ money. • Pronto – a food delivery startup that raised £1.2M equity funding in August 2015 and £800k on crowdfunding platform Seedrs in June 2016, went into administration just few months after the last fundraise. A very bad exit because of the quick cash burning! • Ethos Global – the company raised over £700k on Crowdcube in 2016 to open a chain of boutique yoga & fitness hybrid studios. Shortly after fundraise strange things happen and no accounts were filed. The business finally closed down in July 2017. Again, bad management and ugly exit in mysterious circumstances. • Juicero – this American startup raised £92M in equity and developed a juice maker device (RRP $399) that after launch turned out to be totally useless, as the fruit and veg pouches did not need the device to be squeezed! Poor product that shouldn’t reach the market.

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How to Exit a Business Craig Massey : DanDan Digital With more than 20 years of experience in the mobile and digital marketing industries, Craig Massey has proven to be an expert in the field. He has founded and exited four technology companies and is now founder and CEO of DanDan Digital, a company that offers digital marketing expertise to SMEs. Massey also takes the time to mentor and invest in startup technology companies in the mobile sector. WHAT WERE YOU DOING BEFORE YOU STARTED YOUR FIRST SUCCESSFUL BUSINESS? I worked for three FTSE100 companies: Polycell, Redland, and Stena Line, which is a Swedish company. It was during the Stena Line years that I came up with a good idea. It really started to take off, so I invested £48,000 of my own savings and started my first company. WHAT WAS THE FIRST BUSINESS ABOUT? Select Incentives was just special offers and discounts in a little booklet. I printed it in major brands like NatWest Bank, Metropolitan Police and London Underground. I printed voucher booklets, provided them to the HR departments, and they distributed them to all their employees. But believe it or not, my print room was producing about 2 million booklets each quarter. It was a pretty substantial print room, but it was costing a fortune to do all the printing. That’s when I changed it into an online company and I called it Intra Extra – it was about special offers and benefits on intranets.

company to them for a quarter of a million USD. It was a very quick kind of flip, and I stayed with them for a year. I was on great salary, but, of course, then it all went horribly wrong with the dotcom crash. WHAT WAS YOUR THIRD BUSINESS? That was a much better business. It was well thought through and really quite clever. Again, it was kind of opportunistic, but I met an Italian guy at a dinner party who was a Mensa member. He was a doctor and a genius at mobile, a very smart guy clearly. We just got talking and we decided to create a company called Brainstorm. We were the first guys to do daily text alerts, like the horoscope of the day, the joke of the day, the recipe of the day... It sounds crazy now, but back in the day it was leading-edge technology. We started doing mobile content way before anybody else.

"My golden rule is to never employ a broker, consultant or any of the other kind of charlatans who rock up at your door"

WHAT HAPPENED TO THAT BUSINESS? I sold it for a Golf GTI, I think. I worked for 2 years, 7 days a week, 14 hours a day… I was burnt out and the guy wanted to take it off my hands and he offered me a brand new Golf. So I sold my company for a car.

CAN YOU TELL US A BIT MORE ABOUT YOUR SECOND VENTURE? I sold the paper version, Select Incentives, and kept and retained Intra Extra, the digital version. That was back in 1999, when it was the dotcom crazy boom. There was a company in San Francisco called Pokes at Work. They were two guys fresh out of Harvard Business School and they had raised $97 million! So I contacted them, went over there and I sold my

LAST SECOND TICKET WAS THE LAST BUSINESS THAT YOU EXITED WITH. CAN YOU TELL US MORE ABOUT IT? What was interesting was that we essentially combined two companies together: my voucher codes and Last Second Tickets. Together, they formed a discounted offering via mobile phones. That proved to be very interesting to a company called Monitise. They had all the technology and they wanted to do transactions, but they needed people to be able to purchase things on their mobile phones in order for them to use the Monitise technology. So I suppose by being part of the bigger entity, it made it possible for me to sell my company for £12.3 million.

WHAT WAS THE MOST DIFFICULT AND CHALLENGING MOMENT AND HOW DID YOU DEAL WITH THAT? That must have been my exit with Brainstorm. It’s now worth about £20 million as a company so it’s doing really well, but I made almost every single mistake possible in terms of an exit. I sold too soon for £3.2 million to the wrong people, and, ironically, I thought I was being very clever. I had heard that Upper Telecom was about to get bought by 3i of which, or so I heard, had really weak mobile technology. So I approached the CEO of Upper Telecom and told him they could get a higher valuation if they owned our mobile technology. But I was also talking to other people in the mobile industry. And then, on the same day, I got two offers:  entrepreneurandinvestor.com |

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one from Upper Telecom, and one from Sponge, which was a lot lower. Now, the team and I loved Sponge better, because Upper Telecom was a bad fit and they were horrible people to deal with. But the problem was that I had venture capital guys who owned 25% of my company and who bullied me into doing the deal with Upper Telecom, because it was bigger. And how these things transpire! Not a mere six months later, Sponge went flying up in terms of their valuation, because they were bought by a big American corporation. So we would’ve loved working with them and we would’ve done really well with that exit, because we would’ve been part of that American sale. What then happened was that the founder of Upper Telecom tried stealing my shares. I had 12 months of litigation where, in the end, I beat him in court. He settled before court, paid all of my expenses, but thereafter, he was just a bad fit. IS EXITING A BUSINESS EASY? No, it isn’t. One of the terrible things is that you have no idea how painful it is dealing with these so-called professionals. I have a massive chip on my shoulder against lawyers and accountants. They don’t care, because they’re getting paid a huge amount for doing very ordinary things. On a £55 million deal, the lawyers and accountants earn £2.5 million out of that deal. So I would urge any entrepreneur to start from the beginning. When you’ve got your certificate of incorporation, scan that document, put it into a file, put it into a sensible place, like a computer, and start to categorise everything. The sooner you start – and that’s everything from all the scans of your passports, of your employees’, etc. –, the better. It took six months of painful due diligence before I sold. But then Monitise walked away from the deal, and for six months we’d been completely diverted away from the business. Then it became very perilous, because we were spending all day answering questions from lawyers and accountants non-stop. So the sooner you do it and the more information you’ve got squirrelled away in a sensible format, the easier your due diligence process is. WHAT DOES IT TAKE TO SELL A COMPANY? My golden rule is to never employ a broker, consultant or any of the other kind of charlatans who rock up at your door promising the earth and deliver nothing. I reached out to all the people in the mobile industry and told them we were up for sale.

DOES THAT MEAN YOU WERE ACTIVELY LOOKING TO SELL? Yes, absolutely. I don’t believe in creating a lifestyle business. I get very bored. I stuck at it for five years, and that’s a long time. I like to build a business. My plan now with DanDan Digital is to sell 50% to private equity in 2019 probably and release a load of funds in which case I can take off for a couple of years and come back after. IF A BUSINESS WANTS TO EXIT AND THEY FEEL READY FOR IT, SHOULD THEY SHOUT ABOUT IT TO FIND A BUYER OR WILL BUYERS FIND THEM? They have to understand who is the most sensible strategic exit, because trade sales for me make perfect sense. I’ve mentored 17 companies, and the very worst CEO is the MBA CEO. They have the Harvard Business School ideas implanted into their brains and it just drives me insane. The first thing that comes out of their mouths is that they are only interested in smart money. After that they say they are going to IPO and then I just die internally. Because, for me, a nice little trade sale for a few million is a nice result. Then you can move on to the next idea and the next idea. ARE YOU HAPPY WITH YOUR EXITS OR DO YOU THINK YOU COULD HAVE DONE IT BETTER? Brainstorm was a disaster. To take £3.2 million was a reasonable exit at that particular moment. But did I do everything wrong? Absolutely. Would I do everything again differently? Yes, I would. And the frustrating thing about the £12.3 million exit (Last Second Ticket) is, because you are CEO, you have what’s called retentions. They hang on to 50% of my exit for two years in case anything crawls out the woodwork or in case there is any legal issues. So in the intervening period, the share price of Monitise had taken a spectacular fall and was worth 4% of the value that I sold out. All my shareholders and staff trousered a load of cash from minute one, and Yours Truly, the CEO, had to wait two years for 50% and it’s now worth a price of a round of drinks. And you have to pay tax on the full amount from the first minute but you can’t claim it back. Things are so stacked against the CEO. It’s outrageous. WHAT IS THE RECIPE FOR A SUCCESSFUL EXIT THEN IN YOUR OPINION? Tenacity, desperation, and hard work. You just have to keep going. 

John Stapleton : How to Exit a Food & Drink Business John Stapleton has 30 years’ experience in pioneering new FMCG categories and establishing and growing successful consumer-led businesses in both the UK and the USA. John now actively manages an investor/Non-Executive Director portfolio contributing value-added business growth advice, guidance and mentoring to business owners, both individually and through a company called Grocery Accelerator. He began his career when he co-founded the New Covent Garden Soup Co (NCGSC), with partner Andrew Palmer. The company pioneered the chilled, fresh soup category and were the first to manufacture and supply homemade-quality fresh soups to the UK retail trade. The entire range are made from 64

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natural ingredients and are free from additives, colourings, and preservatives. Following many setbacks, including a factory fire, the partners sold the business 10 years later. Despite early set-backs, the company became extremely successful, and grew to being widely stocked in all food retailers in the UK including Sainsbury’s, Tesco, ASDA, Safeway, Morrisons, Somerfield and Waitrose. After exiting with New Covent Garden Soup Co, Stapleton co-founded another company called Glencoe Foods Inc. Stapleton describes Glencoe as “a fresh soup company for the US market”, so it was very similar to NCGSC however it did not take off in the same way as NCGSC. Then, in 2005, he co-founded and grew Little Dish, which designs and supplies fresh, natural foods and snacks for kids aged 1 and over. Little

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Dish is the dominant brand in the chilled toddler food category, which it created, with an 80% market share. Startup Funding Club COO, Angelika Burawska interviewed John Stapleton at the occasion of SFC Annual Investors Dinner at King’s Collage London. Our main goal was to get an insight into the journey that an entrepreneur is required to take from starting a business to a successful exit. John shared with us his experience with the three businesses he founded and gave some tips and advice, invaluable to any food and drink entrepreneur and also to potential investors in the industry. One of the businesses that Stapleton admires most is Vita Coco due to its incredibly proactive distribution strategy, excellent consumer–focused brand awareness, health and well-being message, and it’s ability to manage exponential growth. HOW DO YOU KNOW WHEN IT’S THE RIGHT TIME TO SELL YOUR BUSINESS? “For me, the right time is if you’re on plan, you’re exiting for the right reasons and it's a successful exit (for all your shareholders). I think it can sometimes be tricky when you recognise you are ready to move on as you may already have passed the ‘right time’ commercially. Hindsight, of course, is wonderful! A common answer many entrepreneurs give when you ask them when they want to sell their business is ‘not now because we have so many things that we want to do or things which are half done, so come back in 2 years’. The problem is when you come back in 2 years they have another list of key things that they want to do. Therefore, it is important to have a plan and give yourself a realistic timeframe. Often the plan will actually take longer – it may even take double the amount of time, for example, we expected New Covent Garden Soup Co to take maybe 5-6 years to set up, grow and exit, actually it took 10! However, those were the early days in my career and I had a lot to learn! An exit was always part of our plan, which made it easier for everyone on the team to come to terms with the decision and actually be ready for it, when it finally happened.”

on bringing professional or institutional investors into your business. You really want them to get behind your plan and become aligned with your goals and your timeframe for them – including your plans and timing for exit. They will look at your business as purely an investment and therefore, will have less an emotional attachment to it than you will. It is important to get alignment of all your major stakeholders in terms of your time-frame and ambition. This should include how big you want the business to be before you sell, who you might want to sell it to (and why) and for what multiple.” YOU FOUNDED NEW COVENT GARDEN SOUP IN 1987 WITH ANDREW PALMER AND SOLD IT FOR £20M TEN YEARS LATER. WHO WAS THE BUYER AND DID HE APPROACH YOU OR YOU WERE ACTIVELY LOOKING FOR SALE? “Daniels approached us, in a rather unusual way. One of our directors, who was Apax’s representative, left Apax and went to set up Daniels as a chilled-food group. Therefore he knew the business very well when they approached us to buy. Daniels was relatively small when they bought us, the purchase of NCGSC meant they doubled in size, and since then they’ve grown into a huge organisation. The whole idea and concept behind Daniels was to build a chilled food group with all products fresh, high quality and premium. They brought New Covent Garden, a ready meal business, a fresh juice business and a chilled dessert business. They subsequently consolidated these brands together and developed a quality, premium chilled food group. As usual, there was a lot of negotiation associated with the deal although Daniels knew a lot about the business in terms of our aspirations and what we were ultimately looking for from a deal. We still needed a large amount of time, almost a year, negotiating on value and conditions. We tried to sell the business earlier and had a large well-known international corporate finance bank Goldman Sachs come on board to help us with it but it still didn’t work as we probably weren’t ready for it. My advice to anybody selling a business in the food and drink space (up to around 50 million in size), is get a well experienced, boutique, corporate advisor instead of the big guys because they may not understand small, branded FMCG, chilled, or food industries nearly as well as they need to. There are some boutique food and drink corporate advisors out there that do a very good job, for this type of business and scale. We spent a lot of time initially with the large corporate finance bank but we recognised we were not likely to derive the value we all wished for. We therefore started again a year later with a smaller boutique firm and the sale happened quite rapidly, by comparison. This was essentially because from the first engagement we had already prepared a lot of due diligence and transaction information, whereas the second engagement could leverage and utilise the work already completed.

"Don’t think or worry about the money; I think if you do that, you’re probably overfocusing on the end-game"

DO YOU HAVE ANY KEY TIPS FOR ENTREPRENEURS IN THE PROCESS OF SELLING A BUSINESS? “Make sure that you resource properly; a typical sale takes a year from when you decide to do it and you need to make sure that you continue to keep growing and managing your business during this period. Try not to get too distracted by talking to potential buyers otherwise you may lose opportunities and the market (and the consumer) may move on without you. Furthermore, all buyers may not understand the value of your business. If this is the case you may need another few years to build the business so that it becomes more obvious to external buyers how valuable the business really is and you can demonstrate its potential. The most important thing is to have a goal in mind and a plan on how to get there, which will almost always need to be adapted as circumstances change. One key reason to have a well developed plan is if you plan

ARE THESE ADVISORS PURELY FINANCIAL OR DO THEY ALSO LOOK FOR COMPANIES THAT WILL ACQUIRE THEIR CLIENT? “Both, as they are very well connected therefore they will know a lot of potential suitors or target businesses. At NCGSC, we were primarily targeting a trade buyer but the private equity opportunity is just as relevant. What I learnt at New Covent Garden is equally relevant to how one might go about selling  entrepreneurandinvestor.com |

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Little Dish. The right advisors will have both strong Private Equity and Trade Sale contacts. They will also know these players’ strategies quite well, so they will be able to make a good judgement as to whether the two businesses will fit together well. They will be able to see where an acquisition will be a great asset to a company and align the strategies and opportunities of both parties together. We spent approximately 10 years building both NCGSC and Little Dish. We became experts in our own businesses, our brands, in attracting consumers and even in building factories. We didn’t spend any of that time researching, defining and understanding our potential buyers’ strategies and needs, so it is best to find someone who does understand this well. Otherwise it is likely you will leave value on the table. The large corporate finance bank had, of course, excellent contacts however I don’t feel they were as good at realising our value – particularly at the specific point in our growth phase and the sector in which we operated.” WHAT IS THE ONE PIECE OF ADVICE THAT YOU WOULD GIVE TO ENTREPRENEURS WHO START THEIR BUSINESSES WITH HOPE TO SELL FOR A LOT OF MONEY? “Don’t think or worry about the money; I think if you do that, you’re probably over-focusing on the end-game. In my experience, money can be a nice side effect of a lot of hard work, application, perseverance and a happy sprinkling of luck and timing. We had many situations where the luck and the timing didn’t happen for us but if you build a business and brand successfully, using New Covent Garden Soup Co or Little Dish as examples, then ultimately money should follow at some stage. If you’re in the FMCG sector business then my main piece of advice would be to focus on getting your the brand absolutely right (for your target audience) and implement consumer awareness very effectively, in both the short and in the long term. The second thing I would say is beware the difference between passion and emotion. Being passionate is key because despite all the no’s and knock backs you will experience, you need to convince yourself that you can do this and from there you’ve got to convince others that you can also, such as employees, investors, retail buyers and consumers. You don’t have big

Investment Bank salary cheques to hand out to employees so you’ve got to convince good people to come and join your happy team and change the world! They need to understand you provide an attractive workplace, with the opportunity for both autonomy and learning and the chance to do things that they wouldn’t normally be able to if you worked for a larger company. It can be a tricky balance being extremely passionate about your business without getting emotional also but this is a skill and a judgement you need to have as an entrepreneur. In my experience, emotion simply gets in the way of making good quality decisions. Passion contributes a lot of value over time, whereas one uncontrolled bout of emotion can end up destroying all of it.” DO YOU THINK THAT ENTREPRENEURS SHOULD HAVE EXIT IN MIND FROM THE START OF THEIR VENTURES? “Yes, you have to have your exit in mind. That means having a plan and a roadmap to implement the plan, but there’s no need to be fixated about it. Such a plan is necessary for both you/ your team and for your investors. Investors typically invest in a plan which appeals to them. To achieve this you need to be able to demonstrate the type of business you are building, the route that you intend to take, the resources that you’re going to need in order to build the brand and the business, the amount of time you’re planning to take and a realistic proposal on the return they are likely to make. Ideally, the plan should come to fruition within 5 to 8 years unless the people investing are friends and family who are willing to just give you the money for simply as long as it takes. Any investor will also want to know whether you're on track against your plan throughout the duration of the investment.”  UPDATE NOTE: This interview took place with John on the 20th of July 2017. Shortly afterwards, Little Dish announced the sale of the business to an American private equity firm. Details of the deal have been covered by the Industry and National press. Little Dish becomes the third business that John Stapleton has exited and the second successful UK food and drink brand which John has created.

Paddy Willis : How to Scale and Exit a Food Company Paddy Willis co-founded and exited his successful organic baby food business Plum Baby Ltd, which was voted into the Top 10 of Startups Hot 100. He made a 10-million-pound exit to Darwin PE and the company delivered 5% market share within 20 months of launch. Willis has since worked with a number of other entrepreneurs as an adviser, mentor, investor, and CEO. Most recently, he has taken on the role of co-founder and director of Grocery Accelerator Ltd. The company supports ambitious food and drink founders and has already backed thirteen businesses, including over £2 million of seed investments. He has also lead the development of Bathtub 2 Boardroom, a charity that provides co-working space and business support for early-stage entrepreneurs across all sectors.

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HOW DID YOU FIND THE PROCESS OF STARTING UP AND SCALING PLUM BABY? I co-founded Plum with my then-wife, Susie. Neither of us had any experience in retail or the fast-moving consumer goods sector. We had the idea in early 2004 and approached Sainsbury’s later that year. They offered us a listing immediately, but it took us until March 2006 to launch. Our biggest challenge was finding a manufacturer. A year and a half later, we ended up with a French company, which was able to make the product the way we wanted, but still, we had to invest in equipment and the training of their staff. Even though they had assured us they could expand to meet growth, it turned out they couldn’t secure funds themselves. So, within twelve months of launch, we needed to look elsewhere. We had a very uncomfortable four months in which we were transferring production to a

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larger supplier. During that time, we were being shorted by our first company and we had to short our supermarkets in turn, which is never good. Fortunately, we had a great Sales Director who was a young mum herself. She worked part-time for us, but was very experienced. We figured we needed £400,000 to achieve a multimillion pound exit. Within two years of launch, we had raised £3.75 million in equity and debt. Never underestimate the need for working capital in a fast growing products business! This involved several different rounds and was a massive drain on management resources. HOW LONG AFTER LAUNCHING THE PRODUCT DID YOU MAKE AN EXIT? DID THE BUYER APPROACH YOU OR WERE YOU ACTIVELY LOOKING FOR A SALE? We started the sale process about four years into the trading of the business. We used Spayne Lindsay, whom we had been introduced to early in our history and who we trusted. Initially, we thought it would be a fight between Heinz and Numico, but in the end, they weren’t interested and we had to turn towards Darwin PE. WAS THE DECISION ABOUT SELLING YOUR BUSINESS EASY? WAS IT THE RIGHT TIME TO DO SO? We always targeted a five year horizon. In the end, it became a prudent move to look for a buyer, because we had two VCT investors who could invoke a sale on their terms some 18 months after we started the sales process. The business was still growing, but it also suffered from a catastrophic drop in foreign exchange. The euro was at 1.25 when we started, but fell to 1.10 in a matter of a few months. With most of our products made in Europe, the profit was being ripped away. Given this was 2009, it was never going to be a good market in macro terms, but the issues with the VCTs meant we couldn’t be complacent and wait.

WHAT DO YOU THINK ARE THE NECESSARY INGREDIENTS TO BE AN ATTRACTIVE BUSINESS FOR A BUYER? A strong brand, a powerful market proposition, loyal consumers, decent margins - or the prospect of them - and growth potential through the deepening of a range or brand extensions. We had left export very undeveloped in anticipation of a trade buyer plugging it into their own model of distribution, but evidence that a brand will travel is also important. DO YOU THINK THAT ENTREPRENEURS SHOULD HAVE EXIT IN MIND FROM THE START OF THEIR VENTURES? Absolutely. They should know where they’re headed and build their strategy accordingly. WHAT WAS THE MAIN TOOL YOU USED TO MARKET YOUR BUSINESS AND CREATE CONSUMER AWARENESS WITH PLUM BABY? Lots of sampling. When we launched, there was limited Facebook activity, so we relied on guerrilla marketing tactics and retailer offers to prompt trial. If you’re doing a good job, parents will spread the word quicker than wild fire. We also pushed the “Mumpreneur” angle with Susie, and that triggered a lot of good PR.

"If you’re doing a good job, parents will spread the word quicker than wild fire"

WHAT WAS THE EXIT PROCESS LIKE FOR YOU AND HOW LONG DID IT TAKE? As mentioned, it was a tricky time in the market and we were very surprised at the lack of interest from trade buyers. Spayne Lindsay did a good job, but there was a worrying period when the bids were low and Susie and I would have fallen victim to the preference shares that the VCTs had. We might have walked away with almost nothing whilst they got their millions back. WHAT DO YOU THINK PLUM BABY HAD THAT THE BUYERS WANTED? Darwin and Lion Capital, the eventual front runners, really wanted a premium food brand for their portfolio, but had both missed out on some iconic consumer brands like Innocent and Gu. We had also commissioned a third-party research that showed how the brand could extend to following kids and parents for a longer time, beyond the toddler stage.

HOW DO YOU GET ONTO THE SHELVES OF MAJOR RETAILERS? By being persistent. Plum was fortunate, because we even had people ring us, which is rare. You should understand the retailer interests, timescales and ranging windows. Shelves are not elastic, so you need to know where you fit in and who you should remove. Make a strong case, know your market, and show how hard you’ll work to pull products off the shelves.

WHY DID YOU CHOOSE TO CO-FOUND GROCERY ACCELERATOR RATHER THAN GO DOWN A MORE TRADITIONAL ANGEL INVESTMENT ROUTE IN FOOD AND DRINK STARTUPS? I was curious that the model for business accelerators I was seeing and experiencing in the tech world was not yet deployed to the food industry. So I wanted to explore whether it might work, given the generally longer timescales for things to happen. When I met Rob Ward, the co-founder, we both agreed it had to be possible, and here we are. HOW DO YOU THINK THE INDUSTRY WILL CHANGE IN THE FUTURE? I believe we will continue to see more fragmentation of the weekly shop, with more short-term purchasing, focus on food waste, which could have an impact on multibuy, and increasing interest in provenance, brand story, etc. This is particularly true for the millennial consumers, who would prefer their purchase to have some good impact. I suspect we will see more diversity in the subscription services, and naturally, the monster that is Amazon will continue to grow. They may not be a threat immediately to the big multinationals, but they will be increasingly nervous as to what Bezos, Amazon’s CEO, might do next! 

 entrepreneurandinvestor.com |

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Mark Chapman - Startup to Exit Case Study: Photobox PhotoBox, an online service for printing, storing and sharing digital pictures, was founded in 2000 by two friends, Mark Chapman and Graham Hobson. Over the years, the company grew to be Europe’s leader in personalised product printing being present in 19 countries with over 31 million active members. Customers can choose from more than 600 personalised products ranging from photo books, calendars, smartphone cases and other accessories. In 2009, the company acquired Moonpig, UK’s leading online greeting cards retailer, and became the PhotoBox Group. Two years later, they introduced two new additions to their portfolio: Sticky9 and PaperShaker. Sticky9 is an online printing service that enables its customers to turn digital Instagram pictures into high-quality products. Mark Chapman, one of the fathers of this successful business told us about his journey in an interview with SFC COO, Angelika Burawska. WHAT DID YOU DO BEFORE YOU AND GRAHAM HOBSON FOUNDED PHOTOBOX IN 2000? We met when we were both working in the city as dealing room technologists. I was working at UBS and Graham at Barings. UBS hired him to do some derivatives trading technology work, so I ended up being Graham’s boss. We worked together at UBS until I moved to Merrill Lynch. Then I pulled him across to work there as well, so I wasn’t his boss once, but twice. FUNDING THE BUSINESS WAS THE VERY BEGINNING. HOW DID YOU DO IT? DID YOU BOOTSTRAP OR DID YOU GET A LOAN? WHAT WERE THE FIRST TWO YEARS LIKE? We did an EIS round of about £500,000 on day one and it took us three days to close the deal. It was extraordinary. But you have to remember that it was 1999, it was an extraordinary time. There was an expectation and a vibe between the US and the UK - “startup fever”. It was a gold rush. At the time, the banks employed the smartest kids out of college, the Oxford graduates, and they were facing an exodus of people doing startups. It was kind of a phenomenon that people would quit every Monday morning because they were going to do a startup. They had seen LastMinute, Amazon, eBay and all of these massive successes. There were a hundred or a thousand wannabes behind those big plays coming through all the time and everybody wanted to be on board. So if you were a technologist, you could build a web server and if you came up with a dematerialised business to the extent that you didn’t need anything pesky like production or fulfilment, you could get a business up and running in moments. And there was capital looking for a home to back these plays. SO DID YOU RAISE FROM YOUR PEERS IN THE CITY? We did, yes. And EIS was the key, because it was a very easy pitch. Typically, we were addressing people who would individually chip in £25,000 or £30,000 which, on a city salary with a bonus, wasn’t a great deal of money. They would be people we knew or people we had worked with or were still working with. For them it was a pretty efficient tax strategy and money that they could afford to lose. Not to say that they thought they were going to lose, but it was ridiculously easy.

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SO IT LOOKS LIKE FUNDRAISING WASN’T THE BIGGEST CHALLENGE. SO WHAT WAS IT, BACK THEN AT THE VERY BEGINNING OF THE STARTUP PHASE? The biggest challenge was the same challenge everybody has. Unless you’re very lucky, it takes an age to build a viable business. Our first day trading, we made £1.42 and on the second day, it was probably £2.42. We kicked off the development work in December and we were live in April. We had one website, one printing machine, about three products and that was it. So the challenge was to build a business which would pay for technology, premises, printing assets and all the rest of the physicality of the business when your average basket was £5. Unlike ringtones or some other electronic product, we had physical products that needed to be paid for. We were kept up at night by questions like ‘How are we going to get customers?’ and ‘How are we going to close that gap?’. That didn’t go away for another three or four years. SO YOU RAISED A LITTLE BIT OF FUNDING? Yes, we went back to our existing investors and raised another £50,000. The first years of PhotoBox could be characterised as a slow, but successful proving of the business model. We dropped our ambitions in terms of time scales and growth about 18 months in and that was the last month we ever made a loss. Afterwards, we didn’t raise anything until the next big corporate event, when we merged with PhotoWays, a similar business based in France in 2005. SO WHAT WAS THE GAME-CHANGING MOMENT FOR PHOTOBOX? WAS THAT THE MERGER OR WAS THERE SOMETHING ELSE THAT MADE IT FINALLY PROFIT MAKING BUSINESS OR A BUSINESS THAT TOOK OFF? When we became a small business, we ratcheted down. As soon as be became series A, we had the backing to aim higher. But the actual transformative event was a court case in 2003. AOL broadband and Dixons took British Telecom to court, because British Telecom had a monopoly over the telecom infrastructure. They controlled how quickly high-speed internet was being rolled out and to whom. They were obliged by government law to allow that service to be repackaged and sold through third parties, but they were very slow and very negative towards those trying to retain and control the monopoly. So British Telecom was taken to court and lost. At that point, it became much easier for third parties to sell broadband. That was unbelievable at the time, so it became one of the fastest roll-out phases of the UK internet. Everybody bought it. Dixon’s and AOL were selling it for £20 a month and you’d get ten times the speed you got from dial-up overnight. That transformed our business, because suddenly, you could upload 50 pictures in 20 minutes as opposed to 2 hours. SO YOU NOTICED THAT SALES CHANGED AT THE SAME TIME WHEN BROADBAND CAME? We did more than that. We actually made white label deals and partnership deals with many of the broadband providers. We were paying for customers through a pure revenue share model. We didn’t pay for customers unless we got an order, so we were in heaven. And of course, that supercharged our

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acquisition. Those deals ran with an explicit co-label. Everybody knew it was PhotoBox, so lots of people were introduced to the brand and subscribed direct. Best deals we have ever done. So about three years in, in 2003, everybody knew it was going to work. From 2003 to 2005, we got to series A on the back of really solid metrics. We merged with the French business, PhotoWays, and together we made a deal with Index Ventures and Highland Capital, who are both really great early-stage investors. SO NOW, WE GET TO THE POINT WHERE PHOTOBOX HAS ENOUGH MUSCLES TO ACQUIRE OTHER BUSINESSES. PHOTOBOX BOUGHT MOONPIG AND THE NUMBER I FOUND WAS £120 MILLION. WAS IT PHOTOBOX’S STRATEGY TO ACQUIRE OR WAS IT BECAUSE INVESTORS WERE EXPECTING IT? Well, first I should say that we hired a CEO when we made the deal with Index and Highlands in 2005. We hired Stan Laurent, who had already done an IPO and who was very familiar with the European consumer business. He had worked in Spain, Germany, France and the UK and because we had the ambition of becoming a Pan-European business, it was a no-brainer, really. It was probably one of the best decisions the firm made, and we enjoyed working together from first to last. In terms of strategics, part of that European buildout process was to acquire, yes. We looked a lot at potential businesses all over Europe and we bought a couple of databases and failed businesses. But the big deal that got us noticed was Moonpig. Even though we had known Moonpig for years, we never expected it to be our first big deal, to be honest. Graham and I knew Nick Jenkins [CEO of Moonpig] and we had talked about the combination over a few beers a few times. But we didn’t get it done until 2009. The thing about the Moonpig business, and Nick won’t mind me saying, is that is was very profitable and therefore very expensive. So it would have been completely beyond the reach of PhotoBox without backing. The good thing about Moonpig however was that because it was so profitable, we could do it partially on debt. We didn’t need to do it all on equity. WAS THERE A MISTAKE THAT YOU THINK THE COMPANY MADE BUT COULD HAVE BEEN AVOIDED? The one thing you will always hear me say is that we were utterly naive during the first 3 or 4 years on customer acquisition. We thought that if we just offered a good service, the web would provide a viral way of bringing customers to us. Even though it worked enough for us to think it was working, it really didn’t. We didn’t look at customer acquisition as an actual strategy for four years, maybe because we weren’t serial entrepreneurs, or we hadn’t gone to business school. We weren’t digital marketers - we just kind of winged it. But if we had taken just a moment to invest in customer acquisition in the early days of PhotoBox, the business would have been bigger in 2005 when we did the series A. And therefore, we’d have been valued higher. When we merged the businesses together, it was about 50-50, which was nice. The French business was growing faster, but less profitable and we were going slower but more profitable. When I look at startups now, I always look really hard at their customer acquisition models and their sophistication in terms of how they think they are going to get customers. WAS EXITING THE BUSINESS IN YOUR MIND FROM THE BEGINNING OR DID THAT IDEA COME LATER? Graham and I always thought that PhotoBox was something we weren’t going to hand over to our children, but we were in no hurry to sell. We had a lot of fun and we were working with people we really liked working with. We had in our mind that we needed to exit at some point. I think we were always confounded by the fact that it just wouldn’t grow as fast as it needed to grow to get the most optimal price. After all, you need a very profitable

business which is growing fast to have a successful exit. We would grow with 25% to 30%, which is not bad for a physical business. But we were turning over €300 million or €400 million at the time, which was not enough to really pile in with the great exits. So it was nearly there, but we never got to the deal that everybody wanted to get until, eventually, we did of course. HOW DID THE EXIT PROCESS LOOK LIKE? DID YOU MAKE THE DECISION TO LOOK FOR POTENTIAL BUYERS YOURSELF OR DID THEY APPROACH YOU? AND HOW LONG DID IT TAKE? Because of the seasonal nature of the PhotoBox business, there was a window that you could consider an exit after we got our Christmas numbers in and before we got too close to Christmas to make it too risky to make a deal. We had three or four months to get a deal before we would be into the next Christmas cycle with new uncertainty. We had been considering it for two or three years. It was almost entirely done through intermediaries, like banks, which were introduced by our venture capital partners and investors. They would prepare the data room and the prospects and all the required data that potential buyers want to consider a purchase. They also did the screening process, found the really interesting guys and they dealt with the capital markets people to figure out whether you got an IPO prospect and what that might bring. We were typically using the A-list banks and they would deal a fairly confidential process of looking at trade sale, recap via private equity or IPO. And we kind of considered the prospects of doing that until there was enough traction on the market with a 100% recap. It was just a question of getting to the level where everyone was satisfied with the deal. SO ALL SHAREHOLDERS WERE ON BOARD? Yes, they were. There were three levels of shareholders. The founders and management, the Series A round, and the series B round, who came in with Moonpig. The founders were really happy to get out, the series A-investors were happy, because they entered at a pretty low level. The series B investors were always looking for a higher number, but it was alright for them. And then of course, you’ve got the other side, the buyers. They want to buy as low as possible, because they want to get a multiple for the next phase in business. It’s just a matter of closing the gap, which Electra and Exponent did for us. IN YOUR OPINION, WHAT ARE THE BIGGEST MISTAKES THAT ENTREPRENEURS MAKE IN BUSINESS AND IN FRONT OF INVESTORS? The biggest mistake I see time and time again, is that people overpromise. I saw yet another one today. They’re three years into their business and did £90,000 worth revenue last year. They are planning £235,000 worth of revenue this year and £23 million next. Even if you’ve got a solution to turn lead into gold, this is just not going to happen. I think that entrepreneurs feel like they have to produce those kinds of metrics in order for investors to invest. But I can’t figure out whether it’s their fault or the investor’s. I’d rather see a rational plan over time than somebody promising me massive riches tomorrow, which I just don’t believe. But at the other extreme, if investors think that being five years in the businesses and only being at £2 million sales dictates a ridiculously low valuation, then entrepreneurs get disincentivised to raise and talk to investors. But making unsustainable promises which are doomed to disappoint, will only lead to bad relationships with investors. THE LAST QUESTION THEN: IF YOU COULD GIVE ONE PIECE OF ADVICE TO BUDDING ENTREPRENEURS, WHAT WOULD IT BE? Patience. Very few founders get rich in five or ten years. So I would tell them to be patient and to do something they enjoy, because they’re likely to be doing it for a long time.  entrepreneurandinvestor.com |

THE ULTIMATE GUIDE ON STARTUP INVESTING

How to plan for a successful exit For many an entrepreneur completing a successful exit and sailing off into the sunset is the reward for the long and challenging journey. In this article I am going to share with you my experience and suggest 6 key actions to enable a successful exit.

1. PLAN EARLY

When should you invest time and effort in looking at the exit strategy? Typically, at the seed investment stage you will be asked by investors about the exit plan. You will need to be able to articulate the exit options and ideally be able to give examples of any recent transactions. Things start to get more serious as you progress through the funding rounds and move away from the Angel investor to the institutional investor. In the early days investors are looking for you to prove the business concept and to get the company making a profit. By the time you reach the institutional investor the conversation will change to “How do you scale and accelerate the business?”

At this point you will need a well thought out exit plan. You will need to be able to provide several proof points from similar exits, demonstrate evidence of the multiples and also reference any meaningful interactions with potential acquirers. The detailed exit strategy should be integral to the business plan. Investors will be impressed if you have a specific exit plan section rather than a slide at the end of the Investment Memorandum (IM) that states: “Trade Sale” or “IPO”. This is an area where many entrepreneurs fall short. Having an impressive exit section on your IM will help you stand out from the competition!

2. ENGAGE EARLY WITH POTENTIAL TARGETS

I believe founders should identify target acquirers/investors early in the process. When you have some market traction, a great couple of client references and a strong sales pipeline, this is the time to start thinking about engaging with your target acquirers. Find the right contacts in the organisation, (easy with LinkedIn), connect and send some relevant content such as a recent press release and then ask to meet up. Be clear you are not seeking for an exit imminently but looking to build a relationship. If you flatter your contact with: “Would you mind giving me some pointers?”, most people are happy to meet for a coffee and give their opinion! Don’t forget to engage your team early as well! Don’t keep the plan solely with the founders. The management team will be integral to the exit process so involve them in the planning. Make

sure they understand that when the exit does happen then there will be much due diligence and the quality of the management team will be put under great scrutiny. Sell this as a benefit and a chance for them to work on their own profile. Make sure they have a strong LinkedIn profile and that they create content to come across as a thought leader in your industry. Speaking at industry events really helps too and will definitely make your management team stand out. Financial motivation is also required and seen as a must from investors. Make sure you have a plan in place for the management and wider team to share in the reward. Share options are a fantastic tool for recruitment and staff retention and are often the best way to reward the years of hard work, loyalty and dedication.

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THE ULTIMATE GUIDE ON STARTUP INVESTING

3. FOCUS ON BUSINESS VALUE

Can you articulate your business value in a concise and clear manner? One common mistake is for founders not to explain the value in the right way. You would be surprised how many companies I see who do not have a clear value proposition. It is an area well worth getting external help on. This process is not easy but when you do have a wellcrafted value proposition, elevator pitch and tagline, you can use these assets across the business. When you come to exit you will be able to position your company in a concise, logical and unique way that will inspire confidence. Remember investors buy into why you do it, not the what and the how. Watch a great TED Talk on YouTube by Simon Sinek – “Start With Why”. VC’s love looking at growth figures. However, do see it from my side. How many companies do you think I have

seen during my career which have failed and underdelivered on the numbers? You do become pessimistic when looking at future projections. So how do you convince me? It is all in the execution and the detail. It is important to articulate how and why the growth is going to happen and back that up with evidence. No investor will move forward with the deal if they are not convinced by the numbers. Balance is so important and you want to show how growth can be accelerated. However, being too conservative is also counterproductive. If the projections look poor and uninspiring they will put the deal into question. There is no right answer but use your judgement and if you can link your numbers to evidence and proof points from within your industry, then the more credible the deal becomes.

4. HAVE A GREAT INVESTOR PACK

You will need to have a winning IM that clearly conveys the value proposition. Investors receive large numbers of pitch decks every week. Only the very best will stand out and get their attention. Make sure the key points are covered in the most concise way possible. Providing a one or two-page executive summary and a detailed financial model will be essential. It really helps if you can get a friendly VC or investor to review your

IM before you start the exit process. I have seen great companies struggle to secure investment because they are unable to pull together an impressive IM. Consider paying for outside expert help to support this process. As well as content, pay attention to the look and feel of the pack. A high-quality IM goes a long way and it may be the first time an investor comes across your brand. First impressions count.

5. SELL THE LONG-TERM VISION

One common issue can be that the founder is unable to articulate the longterm vision. The investor will need to see that although the founder may be stepping back there is still a driven management team working towards a

bigger goal. A clear plan could involve moving into new markets. Positioning of strategic acquisitions and expanding into new geographies are good examples of having a long-term vision.

6. CLOSURE AND WALKING AWAY

When you get to the negotiation phase keep calm and have an open mind. There always needs to be some room for negotiation. Remember that there are many terms to be agreed. Take professional advice and try to make decisions based on fact rather than on emotion. When the deal is complete you will usually have an earn-out period depending on your management team and the structure you agreed in the deal. I have seen several founders struggle through this period. There can be changes made to the company that you

do not agree with. New members could be added to the management team. The emotional challenge of letting go can be very hard for some people. I believe you need to leave with two things: money and your reputation. If you have a 12/18 month earn-out period, do keep the same motivation and work ethic. This is a great time to consider what you will do next and time to set up a new venture. I know of investors who stay in touch with founders and then become investors in their next venture. So this is a perfect opportunity to impress!

Exits are difficult but if you plan the process, engage early and have a great value proposition, produce a professional looking IM to deliver fantastic results, plus sell a vision and a dream that will live on long after you have gone, you will definitely improve your chances. At Venezia Capital we work on both the buy/sell side and use our detailed knowledge and contacts within the technology industry to facilitate successful exits.  If you would like advice or support on any of the above topics, please contact me on: alex@veneziacapital.com entrepreneurandinvestor.com |

THE ULTIMATE GUIDE ON STARTUP INVESTING

The five golden rules of successful angel investors WHO ARE ANGEL INVESTORS? The profiles of angel investors are very diverse: they range from “exited” entrepreneurs - successful business owners who have sold their companies – to corporate executives and highincome City professionals (investment bankers, asset managers etc.). These are the main categories but you will also find angels who in their day job are lawyers, consultants, marketing executives and even the odd professional gambler. Angel investing is gaining in popularity and although angels are still more likely to be middle-aged men, we are increasingly seeing younger and female investors getting involved as well. SO WHAT DO SUCCESSFUL ANGEL INVESTORS HAVE IN COMMON AND HOW DO THEY OPERATE? At Startup Funding Club, we are fortunate to run one of the most active angel investor networks in the UK with over 300 private investors who have invested together in more than 100 young companies. This gives us a unique insight into how these angel investors operate. There are as many different strategies as there are angel investors. They have different goals depending on their wealth and the richest

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investors might even see this as a form of entertainment although the vast majority of angels would put their capital at risk because they hope to generate a significant financial return. Angel investors have very different profiles it is not easy to identify common tactics between such different people. One of my favourite books on angel investing and venture capital is “Startup Wealth” by Josh Maher which compiles interviews of some of the best and most successful angel investors in the US (think those who invested in Google before their search engine was even launched). It’s a very entertaining read but also quite confusing: the strategies these investors deploy are often very different if not contradictory. Some are highly analytical and focus on numbers while others tell you that metrics don’t matter until much later. Some encourage you to become actively involved in the management of the companies you invest in while others recommend to be as hands off as possible. They’re all equally successful, so who do you trust? Fortunately, there are some constant truths in business and it is possible to observe common traits in successful angel investors.

SO WHAT ARE THE FIVE GOLDEN RULES OF ANGEL INVESTING? 1. FOCUS ON PEOPLE, THEIR INCENTIVES AND THE TEAM DYNAMICS Being an angel investor is more akin to talent recruiting than traditional types of investing. Similarly to hiring new employees, you are entering in a long term relationship with a person or a team whose performance will determine the success of a business. Unfortunately it is very difficult to judge people you only superficially know. You have to rely on first impressions, references and whatever information the entrepreneurs are giving you. This is why beginner angel investors typically overlook people when evaluating an investment opportunity in favour of other common criteria such as early metrics, the vision or the market dynamics. But experienced angel investors know how to identify red flags about entrepreneurs and make sure that the people they invest in have the right attitude, mindset and incentives. First – are you investing in a team or a sole founder? Although there are some counter examples it is extremely difficult to survive the first years of a business alone. Make sure that you invest in a team of complimentary individuals who ideally have collaborated before on similar projects. Secondly – you want to see entrepreneurs who present the right mix of insight into their market, skill, grit, vision, and persistence. Passion is not enough – you want entrepreneurs who are obsessed about solving a particular problem and building a successful company on that solution. Building a business is incredibly challenging and often painstakingly slow: are the founders ready for the ride or are they expecting a quick exit? Do they also have skin in the game: are they taking personal risks to start this company or are they just having a good time with investors’ money? Third – beware of the “wannabe entrepreneurs”, a growing species! Although it is great to see entrepreneurship being widely celebrated and encouraged, it should be reminded that by definition only a minority will make it. The problem with the current hype and the growing supply of capital is that it attracts people who

THE ULTIMATE GUIDE ON STARTUP INVESTING

probably should not start companies. Young graduates might do it because it’s the cool thing to do after university. Bored executives coming from the corporate world try to experience the startup thrill but are often used to support systems that they don't even perceive. Experienced angel investors know how to spot and avoid wannabe entrepreneurs: they "need money to make any progress", they lack the ability to “go out of the building” and gain customers early on etc. Good entrepreneurs generally don't wait for investment to build something.

investor protections are included (such as tag and drag along rights, pre-emption rights, minority protections etc.) and interests are aligned with the management: have they created an option pool to attract future staff, how are investors repaid in case of a liquidation etc. You also want to make sure that investors are represented and consulted for major decisions and large expenditures. Being known as an angel investor who can move quickly as long as the terms are standard will build your profile and allow you to have access to great dealflow in the future.

2. HAVE A PORTFOLIO APPROACH Every investor knows about the portfolio theory and how to apply it to their traditional investment portfolio (stocks, bonds etc.). However there is a tendency to forget the diversification principle when it comes to angel investing which is a critical mistake. You might get excited about a particular start-up and overweight your investment or only invest in a specific sector that you know best. But diversification is absolutely crucial in angel investing. If successful angel investors have one thing in common this is it: they have invested in a LOT of companies. This was necessary to pick the few stars that made them rich. Considering that only 5-10% of deals generate large multiple returns, a portfolio of angel investments should typically include at least 20 companies. A lot of angels stop at 5-10 which is not enough to get a decent chance of hitting a big win. Diversification is also the only factor that is fully under your control when angel investing. Everything else is so contingent on external factors, do yourself the favour of spreading your risk in an optimum way: diversify your portfolio, maintain your position in winners and cut losses on losers.

4. GET INVOLVED TO THE RIGHT DEGREE Angel investing is definitely an “active” type of investment where you get to know the management of the companies you invest in and get involved in supporting them. The right level of involvement depends on the company, your domain expertise and how you get along with the entrepreneurs. Some angels are more hands-off than others but the majority look for ways to help the management teams. Investors can help put together a proper governance structure with regular board meetings to track progress, discuss the longterm strategy and keep the directors accountable. Investors should also have basic controls and oversight over how their funds are used and can help with decisions that require to take a step back such as culture, major hires and other strategic decisions. Beware of entrepreneurs who don't want you involved and make sure that investors have as little input as possible. Good entrepreneurs do the opposite and surround themselves with people, constantly seek advice and keep stakeholders in the loop of the business’ developments. But the job of an angel is to be helpful and not to put unnecessary pressure on the entrepreneur. Nor is it to get too involved in the running of the company and taking responsibility away from the CEO. Investors are not operators: if you feel the need to get too involved to compensate for the shortcomings of the entrepreneurs, you probably haven’t followed rule #1 and backed the wrong team in the first place.

3. KEEP THE PROCESS SIMPLE BUT MAKE SURE THE RIGHT INCENTIVES ARE PLACED AND INTERESTS ALIGNED The corollary to doing a large number of deals is to be able to do them quickly. Good angels keep the investment process simple and don’t overdo the due diligence and legal negotiation process. The best deals tend to close very quickly (in a few weeks) and you will have to move fast if you do not want to be left behind. Doing too much due diligence can be detrimental to your investment strategy. Spending more than 10-20 hours on a deal is usually a bad sign. At the start-up phase, there aren’t years of financial data to review and projections are hugely speculative. Provided that you are satisfied with the quality of the team (see above), the soundness of the proposition, the short term plan and the use of funds you should proceed with an offer. Good angels accept the high level of contingency and don’t look for answers to questions that can’t be answered at this early stage. The same applies to the legal terms of the deal. Valuation is key and should be negotiated carefully. Entrepreneurs tend to have inflated expectations of the value of their company and you should not necessarily accept at face value their proposed terms. Knowing that a lot of your angel investments will fail, the key question is: if this one is a winner, can it generate a 10x multiple return on your investment to make up for the losses on others? But the rest of the legal structure of the deal should be kept simple and investors can acquire a bad reputation by insisting on onerous terms. However make sure that key

5. DON’T BELIEVE THE HYPE Last but not least: don’t jump on the bandwagon. Some sectors can be seen as the flavour of the month and will attract too many entrepreneurs building similar solutions and seeking unreasonable terms such as very high valuations. Currently we are seeing this dynamic in a number of domains such as artificial intelligence, blockchain and fintech (financial technology) which are typically the most talked about topics in the start-up world. These sectors and technologies are hugely popular with entrepreneurs and investors and will generate a large number of companies with more or less solid business plans. Experienced angels remain cool-headed and do not forget the fundamentals of their strategy even if the sector appears very exciting. Successful angels also invest in rule breaking startups which are disrupting an industry and where they can see no immediate direct competition (at least it should be difficult to define direct competitors). If a sector is too hot it probably means that the wave has already passed and that the competition already got funded and will have a head start on any new entrant. An angel investor should always try to look for trends that have not gone mainstream yet as these will be the true sources of value in the future. 

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THE ULTIMATE GUIDE ON STARTUP INVESTING

Stephen Page on exit strategies What are they and why should you do it?

In every company, there is a time when a business owner wants to exit the company. Their strategy can give them a way to reduce or eliminate their stake in the business by selling shares owned in the company. If the business is successful, the entrepreneur can receive a substantial amount of money for their hard work. If the company is not successful, a trade sale can limit the losses. The reasons for such exits can often be found in the business owners themselves as they want to move on or start a new adventure with another startup or simply retire. The most obvious reason why to aim for exit are however investors who expect their money back with a profit. EXIT STRATEGIES There are four ways to exit. The first strategy is acquisition, which means that the company can be acquired by a bigger business in exchange for profit, such as cash or stock. During such acquisitions, key executives and employees often stay for some time in order to be able to cash out and vest their stock. These kinds of exits also provide capital for startup investors, who can then return the money to their limited partners, such as Venture Capitalists (VCs) or to the investors themselves if they acted as business angels. A different kind of acquisition is called an acquihire, which is a very common method in Silicon Valley of acquiring and afterwards hiring the team. In this case, the buyer is more interested in the team than the product itself. The employees end up getting transferred to another company and the products or services which have been acquired are often brought to an end (Sparrow mail acquihire by Google). The second strategy an entrepreneur can implement is an initial public offering or IPO. The company start floating on a stock market, where it sells a significant number of their shares in the process to institutional and non-institutional investors. Mature businesses often choose this strategy when they can no longer raise more capital from VCs or private equity firms. This way, they can 74

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provide liquidity of the existing shares and large sums of capital to all parts of the company, including founders, early employees and investors. For a long time, IPOs were mainly seen on NASDAQ and Wall Street, both American stock markets. Now, European stock exchanges are become more popular with companies such as Zalando, Odigeo, eDreams and Rocket Internet selling their shares on stock markets in London, Frankfurt and Madrid. Thirdly, an entrepreneur can choose for Mergers and Acquisitions. This strategy usually implies a merger with a similar large company. Very often it is a win-win situation for both parties, since they would complement each other’s skills. For bigger companies, it is a more efficient and quicker way to grow their revenue compared to creating new products in-house. The last strategy a company owner could carry out is simply not selling their business. If the company’s team is able to establish a solid business model and scale, they might choose to stay independent and reinvest the profits in the company. The entrepreneur may find someone they trust to run the company for them, while the remaining cash can be implored to develop the next great idea. Parts of that profit can also be distributed amongst investors as

a dividend, providing liquidity to outside partners while avoiding the public markets and the obligations that come with it. HOW DO YOU KNOW IT’S TIME TO EXIT? Unfortunately, there is no universal answer to that question. The time for startups and investors to sell differs from the right time for buyers to obtain the company. On the one hand, owners and investors want to maximise their selling price. Their moment to sell would be at a moment when their growth rates are high. However, founders of lowervalued startups might want to sell for a lower price. The longer they wait, the more investors will own the company and the lower their percentage will be when they eventually do decide to sell. Buyers on the other hand, will want to make their move when the company value is lowest and consequently, the price is lower. The key to the transaction is to find a balance between two sides. The task for entrepreneurs and investors is then to consider the circumstances of their ventures and make a decision based on that. SOME WORDS OF ADVICE When preparing their exit strategy, entrepreneurs would do good to take these pieces of advice to heart: • Differentiate. The product the company sells must be something everyone needs, has the ability to capture an important customer segment and should grow sustainably. • Develop. Cultivate partnerships and take advantage of new opportunities during the whole startup journey. • Tell a story. Using story-telling as a marketing strategy will ensure that the company is able to interest investors, press and consumers. Publishing regular updates and significant milestones for the company will radiate its success. • Do research. By regularly conducting market research, the entrepreneur ensures that the product is continually adapted and can keep up with the market’s changing preferences and demand. • Be bought, not sold. Entrepreneurs should never set the premise that they are looking to be acquired, since that could signal that something is wrong within the company. Rather, they should open conversations with potential viable buyers while communicating their “Plan A”: customer acquisition, fundraising, and growth. Shareholders and board members could help steer those conversation into the right direction. 

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Boost your business innovation with grant funding Vic Mistry, Head of Innovation Partnerships at Ixion, explains how grant funding can be the catalyst for growth in your business.

WHO ARE IXION INNOVATION? Ixion innovation is a team of experts that helps Innovative businesses win major grant funding to support their growth ambitions. Last year we helped businesses secure funding for projects worth £32 million. SO WHAT IS GRANT FUNDING? The UK government and EC have both recognised that just 5% of SME businesses drive 50% of economic growth. Innovative SMEs grow twice as fast as those that don’t innovate, so are vital to the UK’s economic strategy. However, access to finance is the biggest barrier to SMEs innovating, so billions of pounds have been set aside to co-fund the development and commercialisation of novel technologies and business models. In the last 18 months, the funding body Innovate UK has given £307m to start-ups and small businesses, with a further €45m given to UK SMEs by the EC last year. Grants can range from as little as £20k all the way up to £2m and beyond. SHOULD ENTREPRENEURS AND INVESTORS BE APPLYING? Absolutely. Grant funding can deliver vital funds at the point they are most needed. For example, the EC’s Horizon 2020 SME Instrument is specifically designed to help companies cross ‘Death Valley’ – the funding gap between prototype and market. Crucially, grants do not have to be repaid and do not dilute equity – hugely attractive for businesses already receiving investment. Clearly, this benefits investors too. It derisks their investment and the credibility grants give a business is a vital boost to commercialisation.

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SO HOW DO BUSINESSES GO ABOUT ACCESSING THIS FUNDING? Both Innovate UK & Horizon 2020 publish calls for proposals, which are listed on their websites (see links below). However, applying for grant funding is not for the faint-hearted. As you can imagine, the promise of equity-free investment makes these programmes extremely popular. Creating a winning bid is complex and time-consuming. In fact, the odds of success for a firsttime applicant to the Horizon 2020 SME Instrument are less than 2%! IS THIS WHERE IXION CAN HELP? Yes. We specialise in supporting established and start-up businesses to identify and win the most suitable grant funding for them. If you’re an entrepreneur or investor, we can help you validate your project idea, find the best funding opportunity, and prepare and submit your bid. With a track record stretching back 20 years, our team of bid writers, scientists and engineers are uniquely equipped to understand your needs, eliminate the burden of bureaucracy and maximise your chance of success. 

If you would like to know more about accessing grant funding for your business innovations, you can contact Vic Mistry at vic.mistry@ixionholdings. com or 07725256376 Innovate UK: www.gov.uk/government/ organisations/innovate-uk Horizon 2020 SME Instrument: ec.europa.eu/easme/en/horizons-2020sme-instrument

Vic Mistry

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Startup Discovery UNIZEST The Aspire Account UniZest Ltd developed the Aspire Account for the global international student market. It elegantly resolves the perennial problems that these students suffer when trying to open an account after they have arrived in the host country. The Aspire Account is an online account with a Visa contactless debit card and an integrated foreign exchange service. The product also provides cash-back rewards and a budgeting tool to help the student account holders manage their money. Open your account even before you leave your home country on www.unizest.co.uk. BOTONIQUE The Botanical Drink For Wine Lovers Botonique is a non-alcoholic botanical drink with the looks, dryness and acidity of dry Prosecco but a unique taste reminiscent of gin, Pimms, wine and vermouth. It was created by a wine merchant wanting a drink she could happily switch to after a couple of glasses of wine, or instead of, that would have the dry crisp refreshment, complexity and long finish she admires in good white wine, and is so sadly lacking in de-alcoholised wines. Botonique also contains PrelixirÂŽ nutrients to replace those that alcohol depletes, and contains just 17 calories per flute, with no sugar or artificial additives. BEAN Taking the guesswork out of managing your money. Bean is an online platform that helps consumers reduce their monthly spending. To use Bean all you need to do is connect your online bank statements. Bean then finds and shows you all your regular payments. If you find a subscription that you no longer use, let us know and we will help you cancel it. Bean will then monitor your contracts and let you know if you are paying too much for the things you do use. If you are, we will try to get you a better deal. To sign up for Bean go to usebean.com

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COLLTEC Perfecting Beauty Science. Ingenious Beauty has spent several years perfecting its first product, Ultimate Collagen+. Packed with three highly effective ingredients in a patented capsule, it counteracts the signs of ageing caused by reduced levels of natural collagen and hyaluronic acid, as well as UV damage. Clinical tests show smoother and firmer skin, stronger nails, thicker hair and improvement in the body’s overall vitality within 10 to 20 days. Available online on ingeniousbeauty.com, the Hut Group sites and in store at Michael John salons. KASHING Creating a Membership in which every business welcomes card payment Already thousands of independent business owners have turned to Kashing to power their payments and enable growth strategy. Thanks to our all-inclusive, value-led membership, no business will be left behind. Our payment services are streamlined to offer your customers the best payment choices – whether they’d prefer to pay via card or online. For just £10 a month for 12-months, you will get a free secure Chip and Pin reader, unlimited transactions at just 1.7% each, and powerful backend tools – all with Level 1 PCI DSS rating! Call us on 0800 014 2950, or go to https://www. kashing.co.uk/. HOPE AND GLORY Award-winning, whole leaf, organic teas, hand-picked from around the world. Hope and Glory offers a unique collection of award winning, organic, premium teas that will enhance the tea drinking experience for the consumer. From the robust and strong blends of Breakfast and Assam, to the nurturing and natural collection of tisanes that are Peppermint, Chamomile and Rooibos, everyone can now enjoy an exceptional quality tea, while also contributing to ethical trade and production. Hope and Glory sources loose-leafed teas, hand-picked from only the very finest of the world’s tea gardens, and aims to bring back all that is great about this very British tradition through training and education for operators.

NIMBLE BABIES Making cloudy, smelly bottles a thing of the past. We understand that parents spend a lot of time and effort buying the best things for their children. Our aim is to look after those things and make them last as long as possible. Our first product, Milk Buster, is the world's first and only patented baby bottle cleaner that removes cloudiness and smelly odour from bottles. Our formula is made with plant-based ingredients that detach milk fat and proteins from plastic more effectively than regular washing-up liquid. Our multi-awarded product in now available on Amazon, JoJo Maman Bebe, Kiddicare and soon on Ocado!

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1-6 Speedy Place, Cromer St, London WC1H 8BU www.startupfundingclub.com/

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Investing in Rare Guitars Top Tips

Precious metals may be an obvious investment class but there is a growing realisation that the best value could actually be found in rock.

t is in rock music that the guitars made famous by the likes of Jimi Hendrix, Eric Clapton and Mark Knopfler are cherished. For those players, the chance to own a guitar of a certain vintage is undeniable but the growing scarcity of truly rare instruments means that investors from outside the music world are plugging into their potential. Guitars dating to the ‘golden period’ for Fenders and Gibsons – the mid-to-late 1950s – have proved rock solid investments for those that have the money to invest. Some of the most famous models were not made in huge volumes meaning that in some cases, only a few hundred were ever made. That provides a buffer against deflation. Meanwhile the upside can be staggering. A specific vintage guitar sold for £20,000 in 1991 is now worth upwards of £400,000. That point is made clear when a truly remarkable item comes up for sale. A Gibson Les Paul dating to the company’s magic year – 1959 – is set to be sold at the New Kings Road Vintage Guitar Emporium this year with a starting price of £400,000. The guitar had one owner and still has all of its original receipts that provide irrefutable proof – or provenance in collecting terms – of its entire history. The guitar, owned by a jazz player, will fetch more than most instruments wielded by more famous players. The rock solid back story enshrines much of its value. The instrument is worth up to £200,000 more than if the same guitar was found in a cupboard without any back story. The guitar is a kingpin of vintage guitar investment. As with any investment involving intangible cultural value, there are pitfalls when buying. Purchasers can be tempted to pay huge sums for guitars with tenuous connections to stars that have little intrinsic value beyond the fame game. Likewise there are copious numbers of fakes out there as well as overpriced classics that do not stand up to scrutiny no matter what the seller paid. The three key points in determining the value of a guitar include the quality of the instrument, the provenance and the number of the models that were made. Those classic models from the Golden Age were made in limited numbers making them the most desirable guitars on the market. Those on the lookout for such opportunities also need to consider the entire package rather than just being starstruck by the guitar. An original case will bolster the value of the guitar as well any documentary evidence. Conversely any signs of modification should be factored in.

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"Prices for classic guitars have steadily risen since the 1980s" Restoration work is commonplace in the vintage car mark but signs that a guitar has been repainted can wipe 60 per cent off the potential value of a vintage Gibson. A few dinks and scratches found on a well-loved guitar should be overlooked as nobody expects a 60 year old guitar to be in a pristine condition. Other factors to consider include original colours. The limited number of ‘blonde’ guitars, for example, means that a vintage model will be worth much more than the standard ‘sunburst’ colours. The exception is the 1959 Les Paul which was never made in blonde, only in sunburst. Most investors looking to take advantage of appreciation in the classic guitar market feel the connection to the history of the instrument. If they are not a famous musician themselves, many buyers will also play. Some collectables end up behind glass, in safes or, in the case of wine, in the basement. Vintage guitar buyers are more likely to play the instruments whether they are wealthy musicians, investment bankers or software billionaires. Prices for classic guitars have steadily risen since the 1980s. Economic circumstances can of course cause distortion with the price of some guitars, notably Fenders, cooling in 2009 as a growing bubble in guitar prices burst. Yet the price on Gibson Les Pauls held

firm which was a sign of durability and the correction helped to highlight the value inherent in the best and rarest models. The impact of Brexit, which has hit the pound hard, has also played into the hands of international buyers looking to cherry pick the best British deals. American buyers were picking up deals within 24 hours of the vote while Japanese buyers have emerged looking for UK stock for the first time in a decade. The feeding frenzy that takes place for the rarest guitars that go for more than half a million pounds does not mean there are not more affordable opportunities out there. Gibson is no longer making its ‘Collector’s Choice’ series of guitars under the Custom Shop marque. That locks in scarcity value for those still on the market meaning that a £2,000 guitar could easily double in value within the next five years. All of which means those thinking about investing in a rare Gibson, Fender, Martin or Gretsch should not fret. 

Rick Zsigmond, Owner of New Kings Road Guitar Emporium (www. newkingsroadguitars.co.uk). The Emporium is part of the family, an alliance of professional and trusted advisers which provide services to the entertainment industries www. thefamily.me.uk

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Investing in Yachts Top Tips When investing in a yacht, you are investing in a new kind of freedom, a luxury mobile hotel that can be situated wherever you wish, your own personal offshore sanctuary where all your problems are left ashore. Obtaining a yacht should not be taken lightly, and before you join this exclusive global club and the opportunities that follow with it, there are many factors you must consider. This guide is here to help you on your way to luxury leisure.

WHEN’S BEST TO INVEST? The most popular time to buy is summer, however due to the demand the price typically goes up. The recommended time to buy in terms of price is after October. Should you require the yacht for summer, the search should begin in March to ensure you acquire the yacht in time for when you want it. It’s best to start the search for your ideal yacht early as such a deal can take up to six weeks to complete. From the agreed deal, you should reach a memorandum of understanding, before a survey. The survey could trigger a discount or an agreed repair programme before the paperwork can be completed. TO BUY, BUILD OR CHARTER? For short term, we would recommend chartering, as it is possible to charter a yacht for less than a week, making yacht chartering the perfect quick getaway or addition to a land based vacation. Not only is it great for short breaks away, there is the option to charter for up to a whole season, ideal if you’re wanting to get a taste of the yacht life. If you want to invest long term, building or buying is the option for you. Building ensures your yacht is built from the get go as a reflection of you, a truly personalised space customised to meet you and your family’s requirements. To create such bespoke luxury is tempting, a new yacht will be built to the very latest industry standards, which can often reduce running costs. Yacht brokers such as West Nautical, can ensure you have guidance from beginning to end of your yacht construction, and all the way up to the launching ceremony. Purchasing a ready constructed yacht means the hard works been done, but should you find a brokerage yacht with some cosmetic features you would like to change, you can get assistance putting forward a realistic appraisal of what would and wouldn’t be possible to alter, including estimated costings of the desired altercations. Many yacht owners are amazed at the results of a refit, with the most popular changes including: – re -painting, new soft furnishings and upgrades to the audio and visual technology. In terms of finance, owning the vessel is a tax efficient investment. Owning a yacht and registering it for charter can be effective, as the vessel should be kept running to keep the machinery working by the captain or engineer. Therefore, in purchasing and chartering your yacht you’re creating your own sustainable system of running it. This is where having an expert in yacht brokerage to provide knowledge and expertise is essential, as running a yacht means keeping track of; • Running costs • Crewing • Eventual upgrades and refits • Chartering • Eventual re-sale

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WHERE TO BASE YOUR YACHT When choosing a yacht location, consider the cost of airline access and how practical the location is to reach from your hometown to the yacht base. Should you need help and advice, West Nautical can create an itinerary that suits your travel needs and wishes, showing safe anchor points to get supplies. We’ve compiled a list of top 5 yacht destinations to help you with your decision; • CARIBBEAN Basing your yacht in the Caribbean can present sailing challenges. South of the Caribbean (Grenada, St. Lucia, Martinique) holds stronger winds than the North Caribbean (US and British Virgin), which holds a variety of sailing grounds and anchorages for a relatively small area. Thrill seekers can enjoy water sports and diving in the reefs and cays, or you can opt to relax on one of the secluded white sand beaches. Visit Gustavia Harbour in St Barts for shopping, nightlife, and restaurants, or retreat to the deserted beached od Anegada surrounded by the native pink flamingos. • CROATIA AND MONTENEGRO Rich in history, surrounded by ancient ruins, the remote beaches offer phenomenal views and experiences for those interested in luxury cruising. Its neighbouring country, Montenegro, also boasts plush marinas and resorts. Montenegro has received major investments in its hospitality sector recently, and now offers picturesque water front restaurants and lavish seaside accommodation, specially catered towards yachting enthusiasts.

• AMALFI COAST – ITALY Stretching from Naples to Positano, the Amalfi Coast is home to some of the most extravagant harbours and hidden coves. Its coastline is an especially quiet area of Italy where charter guests can enjoy the tranquil surroundings. If you’re into luxurious experiences, then head to the island of Capri, just off the Amalfi Coast. • CUBA Cuba is the ultimate yacht charter destination for those who want the serenity of the ocean waves paired with the hustle and bustle of city living. La Havana has a magnificent culture to explore, with its brightly coloured buildings and classic cars. If you want lively night life, then Cuba is the place for you. Havana is jam packed with bars and nightclubs where you can dance the night away, listening to live music, with a fresh mojito in hand! It’s the perfect location for young yachting enthusiasts.

Spirit of the Sea

Yacht Firefly

• THE FRENCH RIVIERA The French Riviera is the heart of the superyacht network and is most popular during the summer months, with annual events such as the Monaco Grand Prix attracting charter guests. Each summer, the French Riviera showcases some of the most profound superyachts from around the world. It’s a great opportunity to socialize with other yacht enthusiasts.  Check out West Nautical’s exclusive charter itineraries for more information on yacht bases at www.westnautical. com/charter-itineraries

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Major New Ferrari Exhibition at Design Museum London To commemorate the 70th anniversary of Ferrari, Design Museum, London will be home to a stunning new exhibition ‘Ferrari: Under the Skin’. Offering an insight into the life of Enzo Ferrari, unique cars and a rare behind-the-scenes look at the design, manufacturing and engineering of one of the most iconic car brands on the planet, this promises to be a must-see for all Ferrari fans.

reated in collaboration with Ferrari, this celebrates 70 years of precision design, from the launch of the first Ferrari car in 1947 to the latest car production. The exhibition will open on 15 November 2017 and run to 15 April 2018. A forerunner to the exhibition is currently on show at the Museo Ferrari in Maranello. The exhibition will provide unique insights into the world of Ferrari, drawing on rarely seen material. This ambitious display will bring together early design models, drawings, letters and memorabilia as well as some of the most famous Ferraris to be seen on roads and racing circuits around the world. Together, these artefacts and original documents provide an unprecedented study of automotive design. Key exhibits include rare personal memorabilia and archival material relating to Enzo Ferrari’s life, early cars, wind tunnel models and hand-sculpted models in both clay and wood. Dedicated displays will explore the design development, engineering and manufacturing of Ferrari together with the company’s phenomenal attention to detail in every element of the cars’

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design. The exhibition will also present Ferrari’s racing heritage, the ongoing quest for innovation as well as the glamour of their well-known clientele. The exhibition pays tribute to Enzo Ferrari and his passion for racing which ultimately gave rise to the brand. The son of a manufacturer in Modena, he became a racing driver in 1919 and competed for Alfa Romeo. In 1947, Enzo Ferrari launched his own car – a new, complex 12-cylinder engine designed entirely with performance in mind – a bold move in post-war Italy. His cars soon started to win races and attract a clientele of wealthy and famous patrons, which in turn built the reputation for the brand. Andrew Nahum, curator of Ferrari: Under the Skin commented: ‘Ferrari’s story has been one of the great adventures of the industrial age. It also represents an absorbing case study in design and development. Ferrari uses the subtle and often unseen techniques of automobile design but with the utmost care and precision and the exhibition provides an insight into the history and practice of the whole private world of automotive design.’ 

Enzo Ferrari in Factory, 1947

Peter Whitehead in action with the Ferrari 125 F1 The pilot will win the GP of Czechoslovakia in Brno 1949

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Seeking Out New Talent By Investing In Startups The economic and political uncertainty that the UK in particular has been subject to in recent years has shaken the business world in many ways, and knowing where to put funds as an investor has become more difficult to deduce. Start-ups have a number of benefits to both entrepreneurs and investors, and have proven to be fruitful routes to explore when investing in business. Having recently sifted through hundreds of applications to announce the winner of The Formations Company 2017 Entrepreneur Award, Piers Chead of The Formations Company explores some of the key advantages to investing in startups.

BENEFITS FOR INVESTORS TAX RELIEF SCHEMES such as Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS) are available to help startup companies. By awarding tax relief to individual investors, the financial risk attached to a business venture is decreased, meaning more funds can go directly into the business and towards reaching goals. BUY AND HOLD IS DEAD. This traditional investment method was a popular character in the business world for decades, but only recently have its flaws been fully exposed. Bottom line is that buy and hold is a technique not suited to the modern business landscape, and all parties in a business are looking for much more involvement from their partners. SECONDARY TRADING is on the rise, and is much more likely to boost the valuations of shares that investors buy, making for a stronger investment arrangement in the long term. DIRECT INVOLVEMENT makes the investment process more exciting and engaging. By investing directly in promising young innovators, you are making a personal contribution to the success of upcoming entrepreneurs, and this involvement will make the entire journey much more compelling. BENEFITS FOR ENTREPRENEURS EXPERTISE AND REPUTATION are huge advantages for startups who are battling to get their work recognised by the bigger names that will make or

break them. Having a figurehead on their side who can not only knock on the right doors but open them too, fast-tracks a startupâ&#x20AC;&#x2122;s progress and makes your investment all the more likely to be a fruitful one. LESS PERSONAL RISK is involved to the entrepreneurs, who traditionally would have to raise personal funds or collateral in order to secure investment. This opens out the playing field and gives more opportunity to those who may not have the means for acquiring their own funds. COMPATIBILITY is what separates an investment from a business relationship. When both entrepreneur and investor are passionate about the company they are pouring their time and resources into, it makes for a stronger alliance and is more likely to produce good results. QUICK DECISIONS will also add ease and pace to the dealings of a business. Where a third-party investor like a bank may need to go through lengthy formalities and paper trails before approving any requests, independent investors can give entrepreneurs quick and personal decisions on next moves, and offer elaboration on each decision, which is a rare commodity. In an era of hardship and procrastination when it comes to securing investments or funding, investors can establish mutually beneficial business relationships that offer opportunities that neither party would have if a more traditional investment route were chosen. It is time to sever ties with outdated investment techniques that do not fit the modern business landscape and embrace more inclusive, two-way arrangements. ď Ž

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I Need Investment For My Business – Where Should I Go? I have owned businesses since I was 16. In the past 18 months, I have sold over £40m of businesses where I owned all, or a significant part of the shareholding. Since selling my last business I have gone from being an entrepreneur to becoming an investor – launching a £13 million investment fund called Firestarters, which is aimed at business founders who want to grow their businesses. In May 2017, I invested in a new business and asked my bank manager for a £550k loan. I was asked if I was willing to sign a personal guarantee. Really? I would love to spend the next 400 words telling you what an idiot my bank manager was for even suggesting that I use their money to fund my next businesses, pay them 5% for the privilege and then protect their organisation by agreeing that I will repay the loan personally if it all goes wrong. Anyway, I won’t. Instead I will tell you where you can go when the same happens to you. Here is a brief personal overview of what’s available and what you should consider when needing investment: VENTURE CAPITAL Venture debt is early stage stuff. It’s money for an idea or money to support early proof of concept and growth. It normally comes in stages for example; stage A, B and C and on many occasions these stages have names matching the tax advantage like SEIS for seed investments. It’s high risk, and when it goes well it has high returns. Research shows that on average two-thirds of these investments lose money and one third fail. Venture fund success needs at least one home run, a highly successful business that generates a 10 times (10x), or 100x return. Venture debt providers typically invest in more companies than other 88

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funding providers as they need to increase their chances of a home run. Who should look for venture debt? People with an idea that need money to prove the concept or have proof of concept that needs funding to get to market. Getting access to funds step by step allows an entrepreneur to benefit from progressively higher valuations and give up less equity as the business matures. This makes this a great form of funding for early businesses. Who provides venture debt? Almost everyone these days. There are typical venture capital funds that are normally run by entrepreneurs, there are on-line market places that allow anyone to club together and give you the funds e.g. crowd funding, and there are wealthy individuals known as Angels. What will it cost me? You will need to give up equity and in many cases, be willing for the provider to take a different class of shares than you, typically known as preferred equity. This establishes a hierarchy of claims on future proceeds in the event of an exit or liquidation. You may in some cases also be expected to have a fund representative sit on your Board (it’s not a bad idea and you should take it). GROWTH EQUITY FUNDING Growth equity is what it says in the title. It’s funding to enable growth. Typically, the provider of the funding asks for a minority shareholding in newly issued shares. It’s unusual, but in some cases a portion of the funding may be used to provide an exit for an existing business owner. Who should look for growth equity debt? Businesses that have a delivery model that shows more investment, comes more sales and profitability. Typically,

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"It is not uncommon for further funding to be provided by the same provider in return for more equity"

the business will be a mature Small to Medium Size Enterprise (SME). Growth Equity is fantastic for owner CEO’s that want to keep their businesses but build them to the next level. Who provides Growth Equity Funding? Growth funding is not as easy to get as venture debt. Specialist organisations and groups provide this service along with some private equity companies. Growth funding organisations expect a strong culture alignment and will ask for many minority shareholder rights to protect their position. At Firestarters, we also provide growth equity funding. What will it cost me? You will need to give up equity and some control. Although growth equity partners tend to be minority investors they do expect to have some control, for example the exit strategy, voting and approval rights. You will, in almost all cases be expected to have a member of the funding organisation on your Board. What can I expect from a growth equity partner? Money, expert advice, guidance, contacts and a desire to grow the business and sell within 3-7 years. PRIVATE EQUITY BUY OUTS Private Equity normally seeks to acquire the majority shareholding of an organisation. Funding is normally achieved by a mixture of bank debt, equity financing and management buy-in. In most cases the significant shareholder(s) are exiting and some funding is used to execute this. Who should look for private equity buyout funding? Typically, an owner wanting to exit, a management team wanting to take control of the business they work in or an individual wanting to purchase an organisation which is known as a management buy-in.

Who provides private equity funding? At Firestarters, we provide buy-out options, but there are also many organisations across the globe that do too. They are easily found through a quick search and many specialise in certain business types e.g. size, sector or markets. Private equity organisations are typically managing funds on behalf of corporate investors. They are clinical on their method for valuations and adding value post transaction. They expect strong management teams and a profitable business that can service the debt interest that they will place into the business.

BY JAMIE WALLER Jamie Waller is an entrepreneur and investor focusing on both growth and buy-out equity. He can be researched at www.firestarters.co.uk

What will it cost me? You will need to hand over controlling interest of the organisation. You will need to be prepared to accept that much of the funding (sometimes up to 75%) will come via debt with equity funding making up the balance. Debt servicing will reduce the free cash flow available for further capital investment. It is not uncommon for further funding to be provided by the same provider in return for more equity. You will always be required to have at least one person on the board of directors and in many cases two. What can I expect from a private equity partner? Money, strong leadership, proven methodologies for operational improvements and a desire to grow the business and exit in 5-10 years. BANK FUNDING Without doubt the best type of funding is bank debt but only if you don’t underwrite their risk with a personal guarantee which is almost impossible. So, for those of you that need investment to start a business, fuel growth or take the business to the next level then concentrate on the three main markets: venture, growth and equity buy-outs. 

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Luxury Travel From winter sun, to snow fun, here is some inspiration for your next luxury break

Privacy & Luxury at Hilton Seychelles Labriz Resort & Spa

Located on stunning Silhouette Island and the only resort there, this very special Hilton gives guests the impression they are on their own private island. The 111 one-bedroom villas can be found nestled in the hillside amongst lush gardens, and scattered along the beach. Each villa sleeps up to three adults, or two adults and two children, with contemporary designs combined with tropical chic, making it a comfortable destination for families or groups of friends to spend a holiday together. This idea of ultimate privacy is continued with Labrizâ&#x20AC;&#x2122;s Silhouette Estate â&#x20AC;&#x201C; a two bedroom villa set apart from the resort with jawdropping views and VIP benefits including a private butler and helicopter arrivals. www.hilton.com

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Swim Straight to Your Room at Beachcomber Resorts & Hotels

Opening this January is Victoria for Two at Victoria Beachcomber Resort & Spa. Designed exclusively for couples, this new adults-only wing will consist of 40 two-person terraced rooms, each opening onto a private beach and the marine park. Couples can choose between a Swim-Up Room, which has direct access to the swimming pool, or an Ocean-View Room. The wing will also see the opening of a brand new restaurant, Moris Beef, with spectacular sunset views, and a new swim-up pool bar, Nautil CafĂŠ. www.beachcomber-hotels.com

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The Ultimate MultiResort Ski Safari Première Neige has launched a new and luxurious multi-resort ski safari for this winter season. Based at the sumptuous Chalet Merlo in Sainte Foy and with the inclusion of a private chauffeur and chef, experience the ultimate multi-resort trip – where you can also enjoy Tignes, Val D’Isere, Les Arcs and La Rosiere – and Première Neige’s out of this world Platinum Collection of chalets too – with saunas, hot tubs and every amenity you could desire. The beauty of this arrangement is with private chauffeurs on hand, you’ve the ability to easily hop from piste to piste and be challenged by a different world class ski resort when ever you want. And if you want to take in the spectacular views from above and enjoy off-piste action, the chalet can arrange heli-skiing for you too. Whilst of course enjoying the delights the different Platinum chalets, and the resorts they are located in, have to offer. www.premiere-neige.com

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Luxury Travel: Maldives Special If you’re keen to escape the city, catch some sunshine, and enjoy some much-needed R&R, we’ve visited four of the Maldives’ most luxurious resorts, famed for their pristine white sand beaches, world class cuisine, eco initiatives and exceptional villas. The Maldives is such a wonderful antidote to the stresses and strains of corporate life. For jaw-dropping incredible natural beauty, super-luxurious accommodation, gourmet cuisine, peace and tranquility we can’t think of anywhere more perfect to relax and recharge. We guarantee you’ll want to return, again… and again…

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Dusit Thani

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hen you need to recuperate from the stresses of everyday life, you’ll find it easy to relax and switch off at Dusit Thani. Located on Mudhdhoo Island, which is just 35-minutes by seaplane from the capital city, Malé, or 10 minutes by speedboat from Dharavandhoo Domestic Airport in Baa Atoll, it’s part of Baa Atoll, which is Maldives’ first and only UNESCO World Biosphere Reserve. If you choose to travel by seaplane you’ll be treated to incredible views of turquoise waters, pristine white sands, shallow lagoons and uninhabited islands. The journey is an experience in itself as you take-off and land from the sea, and the large windows offer incredible opportunities to take photographs of the stunning natural scenery. 

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Once you catch sight of the white sand beaches, coconut palms and beautiful blue lagoon, you’ll feel like you’ve been transported to a castaway paradise — but you’ll have all of Dusit Thani’s modern amenities at your fingertips. The 94 villas and residences are equipped with cuttingedge technology, including a 46” LED television, Internet Protocol Television (IPTV), Wi-Fi access, and an MP3 Bose surround system. The mix of beach and over-water villas and residences offer a combination of private pools and lagoon access, all with panoramic views of the breathtaking landscape. We stayed in a water villa with pool, which was set on stilts over the crystal-clear waters of the lagoon. This gave us the best of both worlds: we could take a dip from our own private deck, or cool down in our private waterfront pool. When we needed to retreat from the heat, we headed inside to sample our bespoke selection of wine from the in-room cooler, or get our caffeine fix courtesy of the Nespresso machine. If you can tear yourself away from your villa — and we struggled — the island is surrounded by the living house reef, which offers endless opportunities for snorkelling. The reef is known for frequent sightings of dolphins, eagle rays, and sea turtles, and you can also take a speedboat ride to Mudhdhoo Island, which is a seasonal planktonrich feeding ground for manta rays and whale sharks. Diving, kite surfing, water skiing kayaking and catamaran sailing are also on offer, and the resident marine biologist is on hand to educate guests about the resort’s conservation initiatives. The resort’s centrepiece is one of the largest infinity swimming pools in the Maldives, and there are tennis courts, and a Fitness Centre with a personal trainer and yoga teacher, as well as the award-winning Devarana Spa, where you can enjoy blissfully pampering face and body treatments, manicures and pedicures, all in elevated tree-top treatment pods. When hunger strikes, Dusit Thani’s restaurants and bars cater to every taste. Start your day with a delicious breakfast buffet in The Market, and return at the end of the day for themed buffet dinners — or sample traditional Thai delicacies at Benjarong. Sea Grill serves delicious sea food and steaks for lunch or dinner, and you can watch the sunset as you sip cocktails from Sala Bar. If you’re looking for a bespoke experience, your butler can deliver a decadent picnic to the beach, or organise a private island trip, to help you create your dream dining experience. It’s the ultimate holiday escape!  98

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Soneva Fushi

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ecognised as the first luxury hotel in the Maldives, Soneva Fushi has been operating for over 20 years. It was founded by Indian-British hotelier Sonu Shivdasani, who also co-founded the Soneva Foundation, which addresses social and environmental challenges around the world. As a result, the focus at Soneva Fushi is barefoot luxury and natural simplicity — you’ll be getting away from it all in a sustainable hotel that doesn’t compromise on comfort and style. Soneva Fushi is located on the island of Kunfunadhoo in Baa Atoll, within the UNESCO Biosphere Reserve. You can travel by seaplane direct from Malé

International Airport, or take a domestic flight to Daravandhoo, followed by a 12-minute speedboat ride. The resort is very lush and green, giving an instantly tropical feel, and is fringed with pure white sand and the sparkling crystalclear turquoise sea. We stayed in a villa right on the beach with a good sized private pool, but there’s a selection of accommodation, from original Robinson Crusoe-style hideaways to large villas, retreats and reserves, many of which have the signature garden bathroom; others feature a private pool and spa, a water slide, fitness suite and wine cellar. You’ll find plenty of ways to spend entrepreneurandinvestor.com |

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your days, whether you want to relax on the beach, take a wonderfully relaxing sensory journey in the Six Senses Spa, go island hopping, or get up close and personal with a diverse range of marine life when you go scuba diving, snorkelling or freediving. There’s an impressive range of experiences on offer, all designed to help you make holiday memories: take a speedboat trip to a traditional Maldivian restaurant located on a nearby uninhabited island; enjoy a guided snorkelling trip with the resident marine biologist; go snorkelling with manta rays; or sip champagne on a sunset dolphin safari. If you’re feeling creative, you can learn to blow glass in the resort’s own glass art studio. After dark, watch classic film screenings underneath the stars at Cinema Paradiso, or make your way to The Observatory to gaze upon the night sky through a stateof-the-art telescope. When you’re happy to simply sit back and relax, you can enjoy the stunning scenery from the comfort of the resort’s restaurants. Fresh in the Garden is restaurant without walls which rises above the herb and vegetable garden. It serves Mediterranean-inspired cuisine, made from freshly-picked produce. You’ll find anything you crave at Mihiree Mitha, from imported cheese to fresh fruit, pizza and ice cream. For the ultimate nightcap, head to Bar (A) Bara, and lie back on a cushioned hammock suspended over the Indian Ocean and sip a cocktail as sea turtles and dolphins swim beneath your feet. 

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Soneva Jani

oneva Jani is located in the Medhufaru lagoon in the Noonu Atoll, which is made up of five islands — of which Medhufaru is the largest and is a scenic 40-minute seaplane flight from Malé International Airport. As we were staying at its sister resort Soneva Fushi, we took a fabulous speedboat ride direct from there, but also had the option of taking a leisurely half-day cruise instead. Accommodation at this superluxurious new resort is made up of a collection of Water Villas and Island Sanctuaries, all set within a private lagoon, fringed by white sand beaches and tropical greenery. All of the villas are made from sustainable materials, and each water villa opens onto its own stretch of private lagoon, and also has a private pool. Many of them also have slides to take you from the top floor straight into the lagoon, as well as a retractable roof so that you can stargaze from the comfort of the master bedroom. There’s an open air bathroom in every villa, and there’s a Mr or Mrs Friday butler service, to cater to your every need. We started each day with a delicious breakfast at So Fresh, complete with fresh fruits and creative juices. The restaurant serves salads, bespoke pizzas and fresh fish at lunchtime, and the chef entrepreneurandinvestor.com |

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creates an array of dishes in the open kitchen for dinner. For a memorable holiday experience, head to Zuhair’s Beach on the deserted north island, where the chef cooks only what he can catch or pick — try freshly-caught fish baked in the sand. After dark, let the chef trick your tastebuds with a Laboratory Dinner, sample the mystery menu at the chef’s table, or dine under the stars at So Starstruck on the Observatory deck. If you have a sweet tooth, So Cool serves over 50 flavours of ice cream and handmade chocolates — and The Gathering Wine Cellar is famous for it’s world-class sommeliers, not to mention the six-metre high glass tower where the wine is stored. Private tastings and dinners can be arranged above the wine tower in the Tasting Room, So Imaginative. Unwind in the Soneva Spa, or use the fully-equipped gym, sauna and steam rooms. There’s also a wide range of activities on offer, including water sports, dolphin cruises and bicycling along the island trails. PADI instructors at the Soleni Dive Centre will escort you to dive dive sites around the resort, where you’ll dive in small groups to discover the lagoon’s rich marine life. If you’d rather stay on dry land, you can also loose yourself in the Labyrinth, a meditative maze made out of ficus hedge that follows and ancient circular pattern, and spend evenings watching movies at the overwater open air cinema, which is located in a tranquil bay at the south of the island. This wonderful resort may still be pretty new, but it’s already proving a firm favourite for those who want the Maldives experience at its most luxurious best.  entrepreneurandinvestor.com |

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Gili Lankanfushi

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or our final resort our choice was simple – it had to be the multi-award-winning Gili Lankanfushi. We’d heard and read consistently glowing reports and wanted to experience this Maldives icon for ourselves before heading home. To get there, we took the sea plane down to the resort from the more northerly atolls we were staying, but you can travel from Malé International Airport by speedboat or luxury yacht in just 20 minutes. This makes it perfectly positioned for those who want to reach their luxury resort as soon as possible after their long international flight, avoiding waiting for sea planes or domestic flights. From the moment you arrive on this tiny, private coral island resort, you’ll feel the pressures of everyday life slip entrepreneurandinvestor.com |

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away. We were met by our very own Mr Friday, our butler for the duration of our stay, who offered us a cooling spritz of peppermint spray and led us to our luxury Lagoon Villa, complete with over-water sundeck and rooftop terrace. We spent lazy days basking in the sun from the comfort of our private water hammock, or relaxing on the sundeck, retreating to the open-air living room whenever we wanted to escape the heat. All 45 of the over-water villas are made from natural wood and glass, and the open design means that the sights, sounds and smell of the ocean soothe your senses. If you’re staying in a Crusoe Residence or the four-bedroom Private Reserve, they can only be accessed by boat — simply drive one yourself or call a floating pontoon any time you like. At breakfast, we feasted on French toast and freshly-squeezed tropical smoothies at Main Restaurant. We chose light lunches from the organic salad bar and, in the evening, indulged ourselves at the luxury street food markets, which are held four nights per week. We sampled exotic flavours from the Mediterranean Spice Souk, the Asian Street Market, and the Passage Through India Tandoor evening. We also took advantage of the delicious fresh fish and seafood and ordered sushi and sashimi at Japanese fusion restaurant, By the Sea. If you’d prefer some privacy, you can dine in your own villa — but we didn’t get the opportunity as we were too busy exploring the chilled underground wine cellar, where you slip a hot water bottle under your feet as sommeliers guide you through food and wine pairings, followed by the subterranean Chocolate and Cheese Rooms, where you can sample handmade chocolates and artisanal cheeses. It’s impossible to resist the allure of the clear turquoise waters, so we took advantage of the breathtaking scenery and went snorkelling among blacktipped sharks and turtles. You can also go scuba diving, windsurfing, or learn to surf — the biggest break in the Maldives is just 15 minutes from the resort. If you’d rather go island hopping, board the Riviera yacht to take a cruise through remote atolls, or get a taste of authentic Maldivian life when you visit local islands. There are plenty of other unique experiences on offer, so it’s easy to make your holiday dreams come true. Whether you want to find inner peace in the overwater Meera Spa, where you can try the four-handed massage or experience a Tibetan singing bowl session, or do your bit to protect the environment when you sign up for a data-collecting science dive, you’ll find it’s easy to switch off and enjoy a truly luxurious retreat.  110 | entrepreneurandinvestor.com

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Explore Wellness to Boost Your Business BY JOE REEMER Head of Fitness, 3 St. Jamesâ&#x20AC;&#x2122;s Square

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’ve worked as a personal trainer for over 15 years, so when I tell people that I can help give them 10 years of their life back, it’s a pretty bold statement. But for most 40-something year olds, the thought of being in better physical, emotional and mental health than they were in their 30s or even their 20s is a tantalising offer - especially when those 40-somethings are in the pinnacle of their career, with limited time and opportunities to dedicate to their health and fitness. But the fact is, with the right training and support, being physically, mentally and emotionally ‘fit’ is the best way to ensuring your good health for as long as you can. Put at its most simple terms, the fitter and healthier you are, the better it is for you, your loved ones and your career. Invest in your physical health, and your mental health will love you for it. Which is why more companies than ever before are investing in health and wellbeing programmes for their employees; be it reduced gym membership or mindfulness coaching. Simply, healthier employees tend to be happier, more resilient under pressure and are likely to work that little bit harder than their stressed-out, sedentary counterparts. Employees report a greater sense of well-being, including a greater tolerance to stress, and employers benefit from a happier, more productive workforce. So is it really that simple? Join a gym, get fit and bingo… increased job satisfaction and productivity suddenly materialise? Not quite. You see, when it comes to fitness and well-being, we are all very different, yet the standard (and highly successful) gym membership model treats us exactly the same; a numbers game whereby the more people who sign up for membership, the greater the profits to the gym chain - whether a luxury gym or no-frills pay-as-yougo. That’s why you’ll often find yourself squeezed into a weights class alongside 20 others, or waiting for the cross-trainer to become free. And, whilst you might get treated like an ‘individual’ for the first few weeks, with perhaps an initial fitness assessment and possibly a diet plan, most people quickly find the gloss wears off and they literally become the invisible runner on the treadmill, become disheartened, give up and stop going. If you’re one of the typical UK gym members who averages 13 visits per year* - consider this: Back pain is estimated to affect a massive 70% of the UK population at some point in their lives, leading to extensive time-off from work. Yet regular, structured exercise can negate the likelihood of being affected by this often debilitating pain. Or, consider the fact that a lack of vitamin B6 and B12 can compromise your immune system to such a point that succumbing to colds and even ‘flu can seem like an inevitable path to time off work. Most people aren’t even aware of their dietary deficiencies, let alone how to address them. Solution? Quality vitamin supplements that can be actively absorbed by the body more effectively than most foods. And when you consider that stress-related sickness costs the UK over £6 billion a year in lost productivity, any opportunity to raise  entrepreneurandinvestor.com |

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"Above all, health and fitness aren’t about being a perfectionist; it’s about being realistic" the body’s stress-busting hormones and lower blood pressure with the power of exercise surely has to be a winner? Health and well-being programmes have become increasingly commonplace in the bid to support productivity and wellness in the workplace. If you’re lucky enough to be part of an organisation who invests in their employees in this way, you would probably be doing yourself a dis-service if you didn’t take advantage of it. But if you’re really serious about your health and reclaiming those 10 years back from your life, you need to know that it is going to take more than a few runs on the treadmill and a weekly yoga class. That’s the bad news. The good news is that health and fitness have taken massive leaps forward in recent years, enhancing our understanding of what it takes to fuel a body, increase its performance, protect it from damage and aid its recovery. We are better able than ever before to take a good body and make it great, and we are coming closer than ever to understand the symbiotic link between body and mind. Faced with an unprecedented rise in mental health issues in the workplace, we owe it to ourselves to understand the importance of buffering us from stress, depression, anxiety and fatigue. 3 St. James’s Square, has taken fitness and wellbeing to a new level because we know that it is completely possible to re-set the clock; making your body and mind stronger, fitter and better equipped to handle demanding, pressurised roles. It starts with stripping every member back to basics, taking a detailed look at what’s going on, both inside and outside the body. We’ve taken advantage of innovative technology that delivers a complete 360 image of your

body, combined with a unique DNA analysis used by elite athletes to pinpoint exactly the perfect diet and fitness plan to address our clients’ concerns and reach their goals. Then and only then can we start to build a bespoke profile of our clients’ unique needs and requirements for reclaiming those 10 years. Getting fit and well can be hard work, so why make it even harder, our approach ensures that you know exactly where you’re starting and exactly where you want to be, taking away the uncertainty and often conflicting advice out there about fitness, nutrition and stress management. With time so precious, making every minute count towards something tangible and achievable is key to staying motivated and committed, alongside support by those who understand your journey and care as much as you do about achieving it. There are some truly fantastic personal trainers out there, but often their focus is distracted by the numbers game. Above all, health and fitness aren’t about being a perfectionist; it’s about being realistic; what to achieve and why you’re trying to achieve it; perhaps you just want to be able to keep up with your kids at the park, live long enough to see them graduate or you want to want to find a truly effective way to manage stress levels. Be holistic in your approach and make 100 things in your life 1% better; not one thing 100% better, that’s how we deliver our promise to give you 10 years back.  * UK State of the Industry Fitness Report, 2016.

WWW.3SJS.CLUB

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New Volvo XC60

or those who want a mid-sized SUV, this is the car for you. This compact yet still spacious sibling of Volvo’s excellent XC90 is a handsome, all-terrain capable delight. Released this year, the new XC60 replace the highly successful original model, which in the nine years since its launch became the best-selling premium mid-sized SUV in Europe, with almost a million sold around the globe. Volvo is synonymous with safety – and here the company has certainly showcased its world-leading expertise. This is one of the safest cars ever made, and is loaded with new technology to keep you and your loved ones safe on today’s busy roads. Steer Assist has been added to the ground-breaking City Safety system. A new safety system called Oncoming Lane Mitigation uses Steer Assist to help mitigate head-on collisions, while Volvo’s Blind Spot Information System (BLIS) now uses Steer Assist functionality to reduce the risk of lane-changing collisions. Clever Pilot Assist, Volvo’s advanced semi-autonomous driverassistance system, which takes care of the steering, acceleration and braking on well-marked roads up to 130 km/h, is available in the new XC60 as an option. It’s a car designed to aid your wellbeing too – with a new CleanZone four-zone climate control system, which removes harmful pollutants and particles from outside the cabin to deliver Scandinavian-fresh air on

the inside. And comfort is assured in the bright and spacious, luxuriously appointed cabin with ample room for passengers to relax. Drivers will enjoy a great command driving position offering excellent visibility, and sensibly arranged controls, plus a comprehensive range of features including smartphone integration with Android Auto and Apple CarPlay and of course the Volvo’s ground-breaking Sensus touchscreen control system – freshly upgraded. Power-wise, the new XC60 comes with a choice of excellent engines – a diesel 190hp D4 engine, and the D5 with PowerPulse technology delivering 235 hp. In terms of petrol - the T5 delivering 254 hp and the 320hp, 400Nm turbo T6. Not forgetting the innovative T8 Twin Engine plug-in hybrid which combines a petrol engine with an electric motor, making it a near-silent zero-emission city car one minute and a highperformance family SUV the next. With CO2 emissions of just 49 g/km, the T8 is also exceptionally tax-efficient. The XC60 has been a firm favourite of the team for years – but this new model really exceeded our expectations. Truly handsome with serious kerb appeal, it’s incredibly well built and every fabric and detail is of an excellent quality. Out on the road and county tracks it is agile, sure-footed, powerful and willing, with decent driver engagement and super visibility. Cracking car.  www.volvocars.com/uk entrepreneurandinvestor.com |

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Volvo V90 Cross Country

raised for its desirability, comfort and semi-autonomous drive technology, Volvo’s V90 has to be about the very best estate car around. It has won for acclaim from experts appreciating its contemporary clean design and quality too. If you think all estate cars are boring, this is the one to change your mind. From instant kerb appeal thanks to its sleek lines and substance to a host of state-of-art technology there’s much to admire and enjoy. There’s class-leading connectivity, including an advanced nine-inch touchscreen and natural voice control system as standard. Plus also the option of Smartphone Integration – which includes Apple CarPlay and Android Auto – and the exceptional Bowers & Wilkins sound system, which has 18 speakers and a sophisticated audio setting that mirrors the acoustics of the Gothenburg Concert Hall in Sweden. In addition, clever Pilot Assist, Volvo's semi-autonomous drive technology that can take care of the steering, acceleration and braking up to 80 mph, is also standard on every V90, as are a host of labour-saving devices, such as a power-operated tailgate and keyless

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engine starting. And such advanced technology continues under the bonnet. The D5 engine, for example, gets an ingenious Volvo-designed system called PowerPulse, which uses compressed air to give the powerful 2.0-litre engine the responsiveness of a much larger engine at low revs. To live with the D5 Cross Country on test proved an excellent car for local errands and long motorway journeys thanks to Pilot Assist, its smooth ride, minimal wind, engine and road noise, and seamless power delivery. The spaciousness and comfort of the cabin was appreciated, and the boot, that made light work containing a gardencentre’s worth of shrubs, Waitrose shop and hay for the horses. For a car of its size, its remarkably agile too – and easy to park. Thanks to its genuine off road capabilities, enabled us to travel across the horse’s fields and tracks with safe easy. With Intelligent four-wheel drive as standard, and an extra 65mm of ground clearance there’s little terrain it can’t perform on. Definitely a firm team favourite.  www.volvocars.com/uk

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Jaguar F-Type Convertible Seriously Sexy, Seriously Good

Few sports cars - even in the £100k plus bracket, are quite as striking as this simply stunning 2-seater convertible from Jaguar. Design Director Ian Callum has created a sexy masterpiece of sleek, sharp lines and muscular curves encasing a cabin of sensory delights – from textured buttons, to warm, silksmooth leathers and flashes of chrome. It’s a car that seems to ask to be touched, as well as ardently admired. Unlike many drop tops, it also cleverly appeals to all genders - is masculine enough without relying on typical convertible clichés such as boardroom gloomy interiors and phallic gear knobs, and instead has appealing curves, plenty of seat adjustment and acres of reflective chromes. Features-wise, even as standard, the list is seriously impressive, with everything from artfully placed ambient lighting to heated and cooled seats. The convertible comes with satin grey roll over protection bars and protection system too. When it comes to this type of car, looks are not of course enough. Thankfully the F-Type’s performance and handling prowess matches the eyepleasing good looks and it’s a genuine driver’s delight to drive with on-point dynamics, pin sharp steering, plenty of feel and impressive acceleration. Out on the road, with the roof down, even this time of year when the weather is cold, the low seating position, high flanks and raked screen keep you snug and cosseted from the elements. This way you can really relish this cat’s delicious throaty exhaust growl too.  www.jaguar.co.uk 120 | entrepreneurandinvestor.com

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Jaguar F-Pace J

aguar continues its winning streak with the F-Pace – the company’s fastest selling model to date. This popularity is no surprise given just how incredibly versatile, sporty and stylish it is – and that’s even before we come to the high quality of all materials used right through from bonnet to boot. The model has notched up numerous awards in a short space of time including ‘Car of the Year’ and ‘Compact SUV of the Year’, and has a growing band of celebrity owners and admirers including Boxing World Champion Anthony Joshua. What else makes it so special? An aluminium light yet stiff body structure, frugal yet powerful engines - the rear-wheel-drive 180PS diesel F-Pace emits just 129g/km, while the 380PS supercharged V6 model is capable of 0-60mph in 5.1 seconds. Fully loaded as you’d expect from Jaguar with the latest in high tech features including optional Head Up Display and a natty ‘Activity Key’ – a wristband that allows owners to leave their traditional key inside the car if they’ll be taking part in activities like swimming or running. There’s also a Wi-Fi hotspot in the car, allowing eight separate devices to connect, and an InControl app, which lets owners remotely access functions on the F-Pace, like pre-heating, checking the fuel status or even location. To live with it is the perfect family car. Spacious, light and airy with ample head and leg room, good visibility, plus a sizable boot that’s big enough to carry all the regular stuff most need. Out on the road it proves it is a genuine driver’s car too. Bright, sporting, nimble – with plenty of engagement and feel. Suspension is just right – much better than others in its class, and it’s rewarding whether tackling tight and twisty ‘B’s, or on longer motorway jaunts. Jaguar’s highly acclaimed Design Director Ian Callum has worked his magic again and it’s a masterpiece of muscular curves, eye-pleasing highlights and unexpected and clever touches.  www.jaguar.co.uk 122 | entrepreneurandinvestor.com

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SEAT Ateca This first SUV by SEAT is taking on the traditional leaders in the field, and notching up awards along the way. Stylish to a fault – providing plenty of kerb appeal thanks to its muscular curves, substance and aura of quality and craftsmanship. It’s also fun to drive, and incredibly versatile – perfect for both family life and the daily commute. There’s plenty of cabin and boot space, a wide range of powerful and efficient engines to choose from, plus all-wheel-drive. The extensive array of technology options extends from full-LED headlights through a broad portfolio of assistance systems, including some of the very latest Group technology, such as Traffic Jam Assist and Emergency Assist, right through to a package of high-end infotainment systems with eight-inch touchscreens and Full Link connectivity. Three trim levels will offer colours and top-quality materials to suit every taste, with the top-of-the-range being the Ateca XCELLENCE. On test this model quickly became a firm favourite of the teams, thanks to its driver engagement and agility, quality of materials, comfort and versatility. And we also appreciated the fact everything is ergonomically arranged - the controls are grouped closely together for ease, while the read outs, such as the infotainment display measuring up to eight inches, are just a brief glance away. Definitely an SUV worth considering. 

SEAT Ibiza Another SEAT hitting the headlines is the striking new Ibiza – which is already winning awards. Sleek, sophisticated, with eye-catching appeal, this is a refreshing alternative to the usual superminis out there. A good range of engines and specs ensure there’s an ideal model for just about everyone, and it’s genuinely spritely and engaging to drive. Economical, and remarkably spacious for its size it’s a great and practical choice as a second car run-around, or for the city commute. 

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Range Rover Evoque Super Capable, Super Slick Very few modern day cars have captured the public’s attention like Land Rover’s rather fantastic Evoque. Since its launch, to global acclaim, it’s been busy notching up numerous awards worldwide. It might not be as statuesque as its Range Rover elder sibling, but it retains the same aura of quality and timeless class. Sleek, rather glamourous and a delight to drive, this is one classy case of both style and substance – especially with 4-Wheel drive models capable of safely traversing pretty much any terrain. Eye-catching inside and out and a masterclass in the application of quality materials of the highest order. Neat and functional but with enough flair to please. Trim levels even at entry are more comprehensive than you might expect, and should you grade up to the range-topping models, you’ll find all manner of state-of-the-art safety, dynamic, comfort and infotainment gadgetry. Our model on test, an HSE Dynamic Lux, featured stylish 20” satin black allows, a panoramic roof, 10.2-inch touchscreen, Traffic Sign Recognition, Park Assist & Blind Spot Monitor, a Meridian 825W sound system and much, much more. Perfect for pretty much any use, out on the road the Evoque is hard to beat. With a super smooth and quiet ride, butter-soft leather seats, and a cabin that’s spacious, bright and airy, it’s a passenger’s dream. Driver’s fare well too, with good visibility, decent seat adjustment scope, plenty of feel and slick auto gearing. You don’t have to be a seasoned and gritty off-roading expert to get the most out of an Evoque. Land Rover’s clever world-acclaimed Terrain Response system is fantastically confidence giving, and pretty much does all the thinking for you ride-wise and enables you to safely tackle muddy sports fields and all the snow and ice our winters can bestow.  www.landrover.co.uk

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Sunseeker 76 Yacht The exciting, all-new 76 Yacht delivers unprecedented levels of luxury, sociability and entertaining space and, with 18 yachts pre-sold, is already in high demand. This model certainly hits the sweet spot in terms of size, space and superyacht feel whilst being extremely manageable for those looking to selfcrew. Clever design maximises social and entertaining spaces, whilst the innovative use of glass enhances natural light, making this a bright and airy boat in which to relax and unwind with family and friends. The optional retractable glass skylight over the lower helm, creates an almost open boat feel to the helm and the adjacent companion seating area to port which is the ideal spot for guests to enjoy the view whilst underway. Natural light also flows into the main deck through extended window lines and unique full-height glazing on the port side. Her exterior decks provide unprecedented levels of space and flexibility that can be can be adapted to suit any needs, whether relaxing, entertaining or both. In fact this is some 126 | entrepreneurandinvestor.com

25% greater than her highly popular predecessor and offers an extensive variety of options to entertain or relax. The substantial cockpit for example can be adapted to provide additional lounge seating or a cocktail bar for afternoon drinks and the option of a ‘beach club’ complete with BBQ grill, fold-out seating and full height rain shower makes full use of the extensive bathing platform which is large enough to carry a Williams 445. The vast flybridge is another exceptional feature of the 76 Yacht, and the impressive layout can be further enhanced by the addition of an optional spa-tub and cocktail bar to further complement that ‘superyacht’ feel. The light and space continues below deck, where there are four sumptuous cabins and four bathrooms, including an impressive full beam master suite with ensuite and dressing area. The spacious crew cabin can accommodate up to three people in an open-plan layout or can be specified with an enclosed double berth cabin.  www.sunseeker.com

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Fairline Squadron 64 The new Squadron 64 is the latest model designed for Fairline Yachts by celebrated superyacht designer Alberto Mancini. The hugely successful partnership between the Italian designer and British boatyard, which began with the Targa 63 GTO, has created an instantly recognisable sleek hull shape with effortless styling and large interior spaces that flow seamlessly. Taking inspiration from Mancini’s Targa 63 GTO, the Squadron 64 will be built on the same Vripack wide chine hull and will hold the same innovative, versatile, light, bright and achingly stylish feel of the Targa 63 GTO. The luxurious social cruiser will add another dimension to Fairline’s established Squadron range, designed in line with the brand’s ethos that nothing should get in the way of the perfect getaway.  www.fairline.com

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Fine Fragrance Nuit et Confidences A sensual halo of warming tonka bean, frankincense and white musk. Perfect for winter evenings and special occasions.

Lâ&#x20AC;&#x2122;Envol de Cartier

Woody, fresh, vibrant and distinctive, with notes of citrus and Gaiac wood. Masculine and memorable.

Jimmy Choo Rose Gold Edition Sparkling, seductive and playful, this latest fragrance has notes of candied orange, sweet toffee and tiger lily, artfully married with Sandalwood and Indonesian Patchouli.

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Wellbeing Lumie has launched its most premium wake-up light - the Lumie Bodyclock Luxe 750D, an upgrade on the Luxe 700 offering AB radio in addition to Bluetooth and low-blue light to make it non-alerting at bedtime. Lumie Bodyclock is a range of wake-up lights, alarm clocks that mimic a sunset to help you drift off to a good night’s sleep and a sunrise to wake you naturally with light. Using light in this way has been shown¹ to improve mood, energy and productivity as well as the quality of sleep and awakening. Lumie was the first to pioneer the wake-up light concept in the early 90s and its products are certified medical devices and therefore backed by academic research and rigorous health and safety standards.

Lumie Bodyclock Luxe 750D

In addition to the new DAB radio function, Lumie Bodyclock Luxe 750D features a low-blue light so it is non-stimulating at bedtime and mimics the colours of a real sunrise and sunset. You can select from more than 20 wake-up and sleep sounds including white noise and also enjoy high-quality audio; in addition to DAB radio, you can stream music via Bluetooth or play music via the USB port, which you can also use to charge your phone. “We know that a strong light signal at dawn and dusk is important for keeping our body clock on track, particularly in the winter months, as it provides a clear transition between day and night. The low-blue light in the sunset feature on Lumie Bodyclock Luxe 750D should encourage the brain to switch off helping you to fall asleep and have a good night’s sleep.” Dr Victoria Revell, Chronobiologist, University of Surrey. www.Lumie.com

The World’s Lightest Bike

The Haibike x Duro FullSeven Carbon 10.0 is lightest and best specified full suspension carbon electric mountain bike in the world. It’s suitable for all mountain activities including crosscountry riding and forest tracks. The lightweight carbon frame weights a mere 17.5kg makes it nimble and easy to manoeuvre over all terrains. The whole frame is carbon, so are the rims, the seat post, the handlebars and even the cranks! Haibike have even cleverly engineered the Bosch eBike motor mounting in full carbon within the frame to reduce weight further. Haibike are the only electric bike manufacturer to mount the motor with the swing arm pivot bolt in a raised position ensuring the rear end is much shorter than any other eMTB providing the ultimate control and manoeuvrability off road. Price: £11,799 www.haibike.com

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porsche design Timepieces

FIRST IN BLACK. THE NEW ORIGINAL.

Timepiece No. 1 | www.porsche-design.com/timepieces