James Caan Guest Blog – Investing in Entrepreneurs

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As part of my “Angel” series I asked my friend, James Caan to be my guest blogger. He explains what he looks for in Entrepreneurs and how he helps them. Enjoy. Keith

Many people dream of becoming a successful entrepreneur. Watching my father build his businesses I realised early on that I wanted to follow in his footsteps and build my own company. Although there are no predetermined rules for success, I do believe that it takes a certain type of person to succeed in business. So when I am investing, I invest in people rather than the product or service offered. A successful entrepreneur is not someone who is looking to take the effortless route and be part of the crowd, but alternately, it’s the individuals who are willing to stand out and swim against the tide in order to get ahead.  

From the moment I made my first investment to the present day one thing that really motivates me is working as part of a strong team of people who share your enthusiasm and drive. I think this is paramount to success. Also, I’ve always practiced my father’s ‘win-win’ formula. To really succeed in the long term, you need to make sure people around you win too. Relationships are crucial in business, so always considering the needs and desires of others will encourage them to work with you to build success together.

Also, many people think that being in business you have to come from a privileged background with a great degree and money to make it work. Yes of course an education is important in business and any financial backing will give you the head start you need, but for me the key factor I believe can make you successful – is your drive and passion.

After the sale of Alexander Mann I had a lot of time on my hands and money to invest. But it wasn’t always like that. My first investment was funded by 3 credit cards and the desire to impress my future wife.

After my ‘gap year’ I spent weeks watching private equity investor presentations and pitches on why I should invest my money into their clients. Although there were some attractive propositions I realised that I could probably do what those guys did – so I decided to start my own private equity firm; Hamilton Bradshaw.

The early days were rocky, I had yet to learn the basics on how to run a private equity firm, but I knew what my strengths were, and that; motivating people, making deals, and growing businesses.

We started out in a small shared office with three people, one of which was part-time. The beginning of HB reminded me of the early days of Alexander Mann. From meetings with prospective clients to making new deals – it was fun, dynamic and exciting, things were happening. I was setting the foundations for the business.

The next stage was growing the business. For any business to develop you need to have a vision. I decided that whilst a small office was great for communication between the team members, the portfolio was expanding fast – so it was time to move. I found a property in Mayfair and within no time at all I bought the building.

Finding good talent for my business was a difficult task. I had two key investment managers but we had up to six companies to manage. Then came the recession. It can throw up many challenges but it presented opportunities and led the way for us to find some excellent talent. I hired another four employees and within 6 months another four after that. Along with the investment managers we eventually built a finance and a marketing team. The company now occupies five floors of the building in Mayfair and weare still growing.

Today, Hamilton Bradshaw boasts an investment portfolio of more than 40 companies. When we are looking at any businesses to invest in we have key criteria. We have invested in a broad range of businesses in the past but our strategy this year is to focus on investing in recruitment companies. Fundamentally, recruitment is my background, it’s what I know, it’s what I love.

We work with the companies in the portfolio on a daily basis identifying how we can add value, overcome challenges and make the businesses work more effectively. They all have their own USPs and with the help of my investment team we work with them to come up with innovative business models. One of the companies in our portfolio has saved their SME customers approximately £6 million and creating a sustainable business model.  

In the first meeting with any entrepreneur, I quickly pick up on their appetite for success. The entrepreneurs I invest in always have passion. This may be demonstrated through the relationships in the management team, their sheer dedication, or their ability to motivate others. It’s refreshing to meet teams that are determined to shake up their industry and use technology to push the boundaries.

One
of the companies in the portfolio that is surging forward is Exsurgo, but like any new venture it wasn’t an easy start. We faced interesting challenges setting up Exsurgo; an international recruitment agency. The management team was extremely passionate. The managing director, David Jenkins, is the sort of person you want to be running your business. He is very savvy, energetic and always ‘switched-on’ when it comes to outlining goals. Besides the usual start-up risks, the fact that the company was to be launched during the recession, when more people are being fired than hired was also a concern. After we set up the company, the expertise of my recruitment team and myself went to work. In the second year of operations Exsurgo generated pretty impressive profits, especially for a start-up company during a downturn.

Everyday I get many questions about starting a company. What is the first thing to do? How do I find investors? What is the criteria for your deals?

Setting up your own company can be difficult if you don’t know where to begin. I have found there is an increasing appetite amongst entrepreneurs for advice about running a business. This is what led me to launch my new ‘Business Secrets App’. Interestingly, the most popular sections have been “Hiring” and “Raising Finance”. The latter has always been a very important issue for entrepreneurs and is now a big part of the government agenda. I’m currently involved in the Entrepreneur’s Forum and meet regularly with Vince Cable and other business people. It’s great to debate and discuss issues with them. I get to find out what other business people want and also report back the challenges I see everyday in my own job.

I love building businesses and thrive on the challenge. I am passionate about each and every business, from Dragons’ Den to the companies in the Hamilton Bradshaw portfolio. Like every entrepreneur I have faced ups and downs, but, one thing I do believe in, is that ideas alone will not make you successful, it is how you execute them that sets you apart. If you are going to do something don’t just talk about it – actually get out there, do your research, work out the numbers, look at your competitors, work out what you can do better. Starting a business isn’t easy but if you are determined and you have unquestioning belief in what you are doing then you can make your dream come true.

If you are looking for more advice and tips on starting a business go to iTunes store and download ‘James Caan Business Secrets’ http://itunes.apple.com/gb/app/james-caan-business-secrets/id430824440?mt=8