The great American engineer, industrialist and pioneer of venture capital Ralph Flanders once said, “We cannot float along indefinitely on the enterprise and vision of preceding generations.” We need to invent. We need to renew. And we need to find smart, logical and productive means by which to construct and finance a new prosperity for our world.
This is one inspiration behind Wild Blue Cohort, a new network of private investors that has started up in West London, one of the most prosperous areas in the global city, home to many talented business people and entrepreneurs and the greatest concentration of CEOs and CFOs beyond the pages of the Financial Times.
Kensington & Chelsea, Hammersmith & Fulham and Westminster are great centres of enterprise in London, be it scientific innovations born at the university Imperial College, global brands locally HQ'ed brands, such as Harrods, Virgin Group and L'Oreal, or as the birthplace of lifestyle and consumer empires such as the retailer Cath Kidston and estate agent Foxtons.
However, in recent years, because of an extraordinary rise in the value of property and the globalisation of banking and financial services – hotels, real estate and personal services are big employers in the district of Kensington & Chelsea,for example - the barriers to entry for start-up or growth enterprise in the area have risen dramatically. As a result, the fertile ecology of entrepreneurial inclusion that tends to lead to the growth of business ideas threatens to atrophy.
As independent neighborhood ventures are replaced by global brands, expensive boutiques and over-priced junk-shops, and financial institutions continue to focus upon their capital ratios and remain averse to lending to small and medium-sized enterprises, you have an environment that is no place to start or grow a company. Problem is, as acclaimed urban writer Jane Jacobs once put it, "When a place gets boring, even the rich people leave.”
In 2013, I decided to put in place something that might start to turn the tide. I was born and brought up in Kensington & Chelsea and for over a decade I have founded for-profit and non-profit ventures that have sought to animate, innovate and newly capitalise local economies.
While people fret over the gentrification of global cities and technology is applied increasingly to urban life, it seems important now to look ahead, grasp the personality of cities 'after the storm' and innovate new soft infrastructure for that time - assuming that we'd prefer not to live in places that look or feel like the shopping, dining and entertainment areas of airport terminals, which at times does seem to be where we are headed.
It would also seem worthwhile to embrace the fact that over the last few years, in part because of the rapid progress of places such as Silicon Valley and Cambridge, places associated with technology transfer and its commercialisation, an approach to economic growth has begun to emerge that values clusters of specialist investors who identify with the local, not just the global.
Alongside the advance of global, institutional and venture capital, private 'angel' investment has grown rapidly around the world, with individuals preferring to invest their money within a 50km radius of where they live, tending towards, as one writer has described it, "Instagrams not Hyperloops"
The popularity and efficacy of this move towards local private finance coincides with other business ideas.
Looking at the impact of technology and globalism on employment, Jim Clifton, Chairman and CEO of Gallup, has emphasised the importance to job creation and the direction of regional economies of “tribal leaders...a self-organised, unelected group of talented people”.
Sir Martin Sorrell, CEO of WPP Group, has pointed to the value of the local in a global, virtual world and “the huge competitive value that an evocative sense of place can confer on ambitious brands”.
Jack Dorsey, the co-founder of Twitter, linked the 'liveability' of a place with the coherence of the local business community in a recent interview with Fortune Magazine: "If we have strong networks of people working together to build local commerce, it can drive people to want to stay and live in these neighborhoods, and it builds a strong underpinning for the whole nation."
Supported by the Royal Borough of Kensington & Chelsea, I have teamed up with local resident and business advisory specialist Deepali Nangia. Deepali is a passionate advocate for business development, entrepreneurship and the use of private wealth for productive, profitable purpose. (She is also exactly the kind of new international resident of London, who wants more from her city than luxury shopping and artisanal chic.)
Deepali and me are now growing a community of people, many who are seasoned investors and entrepreneurs, almost all of whom live in West London, who want to invest in early stage or growth companies that have an existing relationship with the area, or wish to do so in the future.
Founder members of Wild Blue Cohort, our new angel investment network, include experienced angels, individuals who have started up, built and exited several successful enterprises, and many international professionals. They work in banking, fund management, insurance, venture capital, healthcare, retail, technology, biotech, media, marketing and the food industries.
When it comes to investment, members of our network have no sector bias and typically consider early stage and growth capital investment opportunities that offer a minimum potential of 3-5x return on investment in 5-7yrs. They seek opportunities that require up to £1m in debt or equity finance at reasonable valuations, with priority given to enterprises that are eligible for Enterprise Investment Scheme or SEIS tax relief.
On applying to become members of Wild Blue, individuals are required to comply with Financial Services legislation and certify themselves as high net worth individuals or sophisticated investors. They also need to complete a non-disclosure agreement.
Through our network of members, in-house research, direct deal sourcing, referrals from investment groups and our extensive relationships with national and local organizations, Wild Blue identifies entrepreneurs and investment opportunities to promote within the group.
Wild Blue does not offer investment advice but prior to sharing opportunities screens them for several indicators, including their local value: perhaps the entrepreneur is resident in the area, the venture operates in it or, with an injection of capital and know-how, it might grow its market and create new employment for the area.
In Spring 2014, we ran our first presentation event. Seven firms pitched. One won investment from a member of Wild Blue. A second deal is close to term sheet. We have new pitch events slated to take place in September and December 2014, as well as February 2015 and our membership is growing fast, an average of one new member per week.
Growth economies need to encourage imaginative and progressive entrepreneurs to come up with new ideas for successful enterprise.
Angel investors are a good source of finance and know-how for entrepreneurs who have exhausted their first major round of funding – normally themselves – and offer capital appreciation in return for high-risk, relatively illiquid, direct investment securities.
As a successful, San Francisco-based veteran financial intermediary once wrote, “When entrepreneurs can raise money, they become credible.”
Similarly, when cities foster new communities of private investor and find new ways to apply their wealth and talent to local business, they sow the seeds for a new generation of prosperity and vitality - and they do it in a place that matters to all people, whether rich or poor, a place close to home.
If you have a business that you would like members of Wild Blue to consider, please contact firstname.lastname@example.org. If you would like to become a member or have another enquiry, write to me: email@example.com.
This post is based upon an article written for the technology quarterly Erly Stage Magazine.
Images: I have lost the sources for all images, other than the first: Hayt86. Apologies but also thanks to their creators.