In my last blog, I mentioned that I have started investing in new businesses again. I also mentioned though that my criterion has changed. I hope this blog is useful as if you do fit the new model – please get in touch.

My starting point should be that I am seriously worried about Google. I have read so many business plans which end with Google buying the business. On my estimate they are going to spend at least £400m buying businesses that I might be investing in. If they are going to spend this much just on businesses that I see – what will happen to them if they end up buying all the businesses that no doubt other Angels see?

Seriously, I have seen many businesses that really are going to be the next ‘Google’ that as soon as I read this in a plan, I dismiss it. It would be funny (and painful) if one of the ones I turned down really does become the new Google!

I have decided to balance my portfolio of angel investments a bit. I have many companies that could become very big in a few years and are capable of delivering at least 5x return on my original investment. But they are unable to generate any cash or dividends in the interim. I have recently become very attracted to cash generative businesses.

They will never be massive enterprises, but they will deliver good returns because they should from month three, start returning cash to the owners. It sounds crazy but I don’t have any of these in my portfolio. Two deals I have done recently are precisely in businesses like these. I found them through my own personal network and was prepared to invest in them in place of a bank. I also find that the amount of investment required is not substantial in these situations.

So cash generation is one priority. The second is my involvement. I have always been a passive investor. I have to conclude that this has not been a good move. My mentor, Sir Rodney Walker has always said that he has only lost money in investments where he has not been involved. I have always believed that I am too young to be a Non-Executive Director (under 40 – only just!). And I guess I have lacked confidence to do this – strange but true!

But through some painful experiences (such as the loss of Amano) I have realised I could have done a much better job than the Non-Exec’s on the board at the time. I have also had my own successes of founding companies that have become worth more than £1m. Finally, it seems strange to be a business coach and a writer of this blog – and yet not be involved in companies I have put money into! As such I am now only investing in businesses where I am involved in a major way. But this also means that I have to select businesses where I can add real value. If someone came to me with an engineering, catering or medical business, I could not be involved as I don’t have the expertise to add real value.

And allied to this there is time. To be involved properly with a business means it takes up a lot of your time. As such I can probably only be involved in about five businesses at a time. I am formally involved with four companies at the moment – so now only have the capacity for one more.

My final recent criterion is that I have to know the entrepreneur – or they have to be vouched for by someone I know. This may seem very harsh, but I have found that some people who don’t know me have found it easy to just give up on a business where I have invested my money and not feel any remorse about it (Leadz on line is an example of this). I know that personal bonds are very important. The people I am working with now – would do anything to ensure that my interests are always being looked after. The only exception to this is where the founder is putting in a substantial amount of his or her own money into a business.

I would still like to do one ‘google’ investment a year where none of the above apply. But for the meantime, I am sticking to my new guidelines. If you have a plan which ticks the above boxes, I would like to hear from you.

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Like finding a suitable name for a new band that you are going to launch, much time is wasted in defining luck and the importance it plays in business success. I like the definition that luck is where opportunity meets preparation.

A successful friend of mine told me that he believes that most of us (but not all) get the same amount of luck in life. It is just that some people are able to take advantage of it and some people pass up on the opportunity.

When I purchased my very first property to rent out, I remember someone close to me at the time telling me not to do it because “if it was that easy, everyone would be doing it”. It is true that you should avoid acting with the herd, but equally, it is not a good reason to not do something.

If you pardon this ego-trip, I would like to share the history of my Canada experience with you and highlight the role that ‘accident’ has played in my latest venture which I am very excited about.

My good friend and business partner, Fergus got off a plane from Portugal and told me that he thought I should write a blog. This was over a year ago – and with a lot of help from him, I started writing a blog.

This blog got ‘picked’ up by some Canadians working at the National Angel Capital Organisation and a guy called Bryan Watson – started commenting on my blog and being very encouraging about the whole thing. Before his comments, the whole thing felt very lonely! I was as a result of this invited to speak at their Annual Conference in Halifax Nova Scotia, 11 months ago.

Whilst there, I met some very interesting people including someone who worked for a great University based there called St. Mary’s University. When I next visited Halifax in February this year, I spoke at the University to some business students. I also met a person there who invited me to have lunch with her and some of her business partners.

At that lunch on the last day of my trip some interesting discussions emerged and it seemed possible that there could be the makings of an interesting business venture between us.

Earlier this year, I was also at a European Angel Conference in Madrid and I met many of the Canadians I had first met in Halifax last October again, including the President of the Organisation.

I then went to Halifax for five weeks in May this year to start this business venture. It was obvious after just two days for reasons that I won’t go into (for fear of being sued!) this venture was not going to work. I then contacted my old friends from the conference and they invited me to a few dinners and networking events. By ‘accident’ at one of these dinners, I happened to be sat next to two company executives who were both looking at the UK market for their business. I was able to help them (and since then I have invested in one of them).

Because of this evening, I was also introduced to some local government officials who were able to put me in touch with other companies that I could help and as a result of this, I was able to get a lot of paid work to help local companies – and am now going back to Canada at least one week in four.

In the interim, I have been able to use this experience of Canadian and UK angels to launch a new venture with the head of the Canadian Angels called www.newmarketspartners.com

This venture will bring 25 of the most promising Angel funded Canadian businesses into the UK on September the 30th. These companies are looking for UK based angels with market expertise and contacts in their chosen fields to help them expand into the UK.

There is another trip taking place on November the 25th in Toronto where UK companies looking to expand into North America will be invited to present to North American based Angels with strong market expertise.

The partners in this venture believe that angels add most value when their money is combined with expertise and market know-how.

If you are an angel – please email me and I will be able to send you an invite to the event. If you are a company looking to expand into North America, please get in touch via the website.

Back to the point of the blog! When I talk to entrepreneurs, what strikes me is how fluid their plans were and what an important role accident played in shaping the way their business looks today.

The lesson here is to go with the flow – but always be looking for new ways in which you can help others.

I do hope you found this blog useful – who knows what this may lead to for me or for you!

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As many regular readers of my blog will know, I am now increasingly based in Canada (at least one week a month). I love the place that I have settled in completely by accident (Halifax, Nova Scotia). I have done many speaking engagements there and recently wrote a guest column for a local newspaper.

After my feature in the newspaper, the hits on my blog went up substantially and I was contacted by many people and offered a few good deals. It seemed to prove to me the old adage about the value of PR and profile. This blog was inspired though by me reading the weekend papers – more about that later!

A good friend of mine who I have worked with for almost ten years is very private. He easily qualifies for a place on the Rich list – and yet never appears there. He confessed to me when I asked him, that he pays his accountant a lot of money to make sure he never appears on any rich list. I also learned that someone else I knew (calling them a friend would be an exaggeration) was paying their PR agency to ensure that they always appeared on the annual rich list.

Two very different approaches and yet they both made sense. The first person did not need the PR. He worked in a ‘closed’ industry. The people he did business with, knew about him and what his company and values were all about. Other than a massive ego massage, there would have been nothing for him to gain from appearing in a rich list – or indeed any other form of PR.

The other person wanted to be taken seriously and ‘break into’ the top tier of deals. They were in the business of selling products to retailers. They had calculated that if the people they were selling to, thought they were ultra-wealthy, they would be more likely to get a meeting and want to befriend them (by saying yes to doing a deal). There is a cold logic that runs through this. However, the real reason is ego. And there is nothing wrong with that motive at all. I should know – On many occasions, I have done things driven purely by ego.

I have talked to many people about the Dragons Den experience. You get the feeling that when the cameras are off, many of the dragons would rather not be bothered with these new deals they have done; it is a massive ego trip for them. The Dragon whom I most respected was Doug Richards who was there at the beginning – but then left because he did not have the time to fulfill the filming commitment (it takes an entire month to do just one series).

The problem I do have with exercises in ego is that it is unfair on the person seeking to do a deal with you or funding as they may believe your reasons for doing something with them are real. This brings me back to the inspiration behind this blog.

As I mentioned, I saw a couple of people I know well featured in the weekend papers. They were having very good coverage and I am sure they will have been very pleased with the write ups they got.

Any entrepreneur reading these interviews may be tempted to spend a lot of time and energy to contact these people as a result of what they have read. The reality is that from what I know of these people; they would not be able or willing to support new start ups.

So my advice to entrepreneurs seeking funding is to be wary of people who have very high profiles. Most angels conduct their affairs in private and want businesses to put the effort into finding them (it really is not that hard). There are of course exceptions to this. One of the most active angels in the UK (and also the largest single angel investor) has a high profile – but not because of his angel investments but because of the deals he is involved in.

I hope this is useful advice from a publicity seeking blogger!

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In sales we are taught a very important discipline. You have to try and ensure that you are always on your customers mind when they think of their needs that you can fulfill. This becomes your reason to call them at regular intervals and develop your relationship with them.

I was reminded of the importance of this last week when I was in Manchester coaching some businesses (great ones by the way!). I was leaving a company when I received a phone call from someone whom I had met about two and a half years ago through the Enterprize initiative. We had stayed in touch as I liked him and his business idea (which revolved around the taxi business).

I had been helping him with the occasional phone conversation every now and then. When he phoned me, I told him I happened to be in Manchester. He wanted to see me and I explained to him that I was off for a meeting with a fellow Investor who is based in Manchester – and I only had 20 minutes to get to Salford from Manchester, so I couldn’t really talk.

Three minutes later, he came to pick me up (you could never do that in London!) and we had a conversation whilst he was driving me to my next meeting. He basically made a very impressive elevator pitch – but had 15 minutes to do it.

As it happens, the investor I went to see complained that he had not seen any good investment propositions recently. He wanted to see me to ask me if I had seen anything of interest. As he was the last person I had met – I was able to mention the proposition I had just heard. He was impressed when I told him how I got to hear the pitch; here was someone (the entrepreneur) making the most of co-incidence (me being in Manchester) and seized the opportunity.

He is going to meet the entrepreneur and may invest a considerable amount in his business. Of course there are no guarantees – but the entrepreneur has put himself in a great position and demonstrated first hand certain qualities.

I guess the moral is – that I am very cheap - a free lift or lunch will do it!

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If you had read one of my first few blogs, you will know that I am extremely critical of the huge (billion dollar plus) self help industry. (By the way a billion is one thousand million in the UK and a million million in the US – a trillion is one thousand billion in the UK and a very large number in the US!)

It is amazing when you go to any shop at any type of travel terminal, the books that are most prominently displayed are the ones belonging to the self-help genre. They only help the authors!

By definition, if the books worked you would only ever need to buy them once to solve each problem. I really would like to meet the ‘sixty second manager’ or the ‘reawakened giant’. Buying more than one book on effectiveness implies that the books don’t quite deliver. The book that has really made it big in the last couple of decades has been “The seven habits of highly effective people”. I know many people who have that book on their shelf and yet very few that have read it. I like the audio version that tells people to focus and to have narrow vision – not the best thing to pay attention to when you are driving I guess.

I am not disagreeing with what some of these books say – or the bolt of energy they may give you from time to time. I just really doubt their power to actually make you feel better or transform you. I was therefore heartened when two weeks ago, a report from my new adopted country, Canada, seemed to show that self-help books can actually lower your self-esteem.

The crucial ingredient of any self-help formula is the self-affirming mantra. This is where you are encouraged to say to yourself “I am brilliant/ effective/ funny/ charismatic/generous” (enough about myself – let me get back to the blog). These affirmations said with enough conviction and over enough time, will lead to you becoming that person you want to be. There is something sinister in this. If you do not end up becoming that person (and trust me you wont through this exercise) you are made to feel that it is because you do not believe enough. You cannot become funny just because you will it. And all the money in the world will not make Peter Jones (from Dragons Den in the UK) funny or charismatic.

I am always nervous about self-affirming types. I have always believed that if you want to be effective or anything else – just do things that demonstrate you are effective! If you want to be thought of as generous – behave generously! To me it really is as simple as that.

So, save your money – and wait till next year when in a complete turn around I will be releasing my own self-help book!

Pre-orders will be accepted from now.

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1. Never underestimate your internal strength

I have a confession to make which I am not particularly proud of; when I first got to Halifax, I had a bit of a wobble and I wanted to come back home after just two days.

It became clear to me after just two days that the purpose of my trip was not going to be met and I do lead a rather spoilt and charmed life in London so the idea of having to ‘rough it out’ did not appeal. However, with most of us, there is an inner strength that can kick in and make you make the most of a situation.

I left Halifax with a massive smile. I had achieved a great deal and will be going back this month as I managed to get engagements to get some work done. Most entrepreneurs have bags of inner strength and I was surprised that I did find that ability to ‘snap out it’. If you are thinking of being an entrepreneur, look back at situations in the past where you feel you had to find some inner strength to deal with things going against you. If you did – then you have at least one of the qualities needed to be an entrepreneur. The only thing I can promise you is that things absolutely will go against you when you start your own business!

2. Realise how important it is to feel connected – Facebook is a must have for those on extended leave

Being away from home is not easy. I have always questioned the value of social networking sites such as Facebook. Why not just phone people? My view has now completely changed!

I was using Facebook a lot and it stopped me feeling cut off from the world of my friends and it was great to keep up to date. Again, the lesson here for entrepreneurs is obvious. When you start a business, it is lonely and because of the hours you have to put in you will have little time to keep up with all your friends. That is when Facebook can be invaluable as it helps you keep up to date with what your friends are up to and ensure that you do not feel isolated and cut off. And a big thanks to my friends for helping me with Facebook.

3. Setting SMART goals really does work in keeping you happy

Before I went to Halifax, I set myself some unrelated goals for my five week stint there. One was to lose some weight (5lbs) and the other was to learn Italian (through a brilliant 8 hour CD course loaded on to my iPod). These goals were able to really motivate me and make me feel a sense of achievement. I was also able to say that I would have paid a fortune to go away somewhere for five weeks and learn a foreign language and lose some weight. I have now decided to go to Italy next year for six weeks – and immerse myself in the language and the culture – I simply adore Italy (the history, the food, the people and the culture).

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One of the highlights for me of last year was to successfully start up a fund management business – www.flightandpartners.com The company is now managing over £12m and is doing well (very well if you consider the way the markets are performing). In the process of doing this though, I realized how much I enjoy setting something up.

Since December I have been working on another start up business. It is so exciting – it reminded me why I got into this area of business in the first place.

I went to see my first potential customer in Manchester on Friday last week and when he said yes – the feeling of utter joy was marred with my nerves jangling because I realized I now had to deliver!

Starting a business is one of the best feelings you can experience (along with jumping out of an aeroplane – but that is for another day!) You realize that entrepreneurs don’t do these things just for money but for the sheer thrill. I have met many would be entrepreneurs seeking investment from me in the last few years. I do get turned off immediately if I suspect the only desire driving the team is money. It simply is not enough to keep you going.

I also remembered a quote from an entrepreneur that I had worked with on a project a few years ago. She said that you do not have a business until you have a customer. The events of last week brought that to life for me.

Many of us come up with great business ideas and some of us may do something with this idea (like form a company) but very few take the critical step of turning that idea into a business. That is truly the scary bit – but it is about emotions rather than money.

I will not invest in a business that cannot prove strong customer demand. Sometimes all you need is a letter of intent or pre-orders and you have transformed your idea into a business.

My advice in this blog is to all of those of you who have a great idea but have not done something with it….

Go for it – make it happen. I promise you that even if you crash and burn – the thrill of having gone for it will give you a smile that will last for eternity. To misquote Dickens “Better to have loved and failed, than not to have loved at all”

All the best, and as always, I am happy to help.

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I was at an event last week organized by a company I invested in about three years ago. The business is called Medical Futures and exists to encourage and promote innovation in health care. It is a fabulous business and one that I am very proud to associate myself with.

The event that I went to was the Medical Futures Innovation Award. The business runs this as a not for profit event and as a result of that it is able to generate a great deal of goodwill. The process involves putting together a panel of the great and the good in specific medical fields to validate and probe business ideas put forward by entrants in the competition.

If you can imagine it, is a dragons den made up of people who actually do know what they are talking about and who want to support rather than knock the entrants in the competition. Because the event is not for profit, the panel is willing to give up their very precious time for free. As a result of this input from them, the winners are very good and are able to go on to successful funding rounds.

The company makes it money by persuading some of these businesses to work with us to get funds raised and to allow us to invest in them. Whilst many people like to invest in the healthcare sector because of the potential of great returns, it is a notoriously difficult sector to get right. It really does require a lot of due diligence and specialized knowledge which most angel investors simply do not have.

This is an example of a business which has a clear vision about the future and has worked out how to create a compelling pipeline of companies to invest in. It has also worked out a long term plan. It is very happy to run these events on a not for profit basis (a lot of money was raised for charity that night) because it is thinking of long term gain and not short term.

Sadly, not enough businesses do that. I am constantly amazed at the huge amounts of goodwill that exists out there. My own career has numerous examples of people giving me a lucky break or helping me with something which had no gain for them. One of these people is Chris Gorman (who also happens to be a shareholder in Medical Futures).

I remember asking Chris on one occasion why he was so generous with his time and money supporting me. He answered back “Because I see you as a good long term bet!”

Apart from the enormous encouragement I got from this vote of confidence, it highlights again the virtue of taking a long term and hopefully ethical view in your dealings with people and businesses. Time will tell whether or not I do turn out to be a good investment for Chris, but certainly, I feel obliged to do my utmost to repay his faith.

Let me end by asking you a question; how are you planning for the long term?

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I had the pleasure last week of going to Prague for a pan-European investment show. Angel investors from lots of European countries turned up to listen to 20 companies looking for angel investment. The companies were all based in central Europe and as Angel investing is still relatively knew there - it made sense to look across Europe.

In all honesty the businesses which presented were poor and I personally did not get excited about any of them as investable propositions. However the idea is great and what was really good fun for me was meeting lots of other angels and sharing war stories (lots of business angel blogs to come from there!)

From the feedback I get from readers of this blog, it seems that most of the readers are Entrepreneurs. What I have always tried to do with business angel blog is pass on some advice for people wanting to have a go at a start up. It was great to hear from other business angels that essentially I am on the right lines.

As a group, we really do not like what Dragon’s Den is doing in its portrayal of Business Angels. I have to be honest and say I have not met any angel that behaves like the dragons when they invest (but it would make really boring TV). If you work with a group of professional angels - they really will try to ensure that the deal makes sense for everyone.

As an angel explained to me, “if you screw the deal too hard, you may win the battle, but you will lose the war”. As a business angel, you always have to strike a delicate balance between getting a good deal but also a deal that leaves the entrepreneur motivated.

In Europe, Cross border angel investments are set to grow - and if you are a start up looking to do activity across Europe, it makes a lot of sense to seek that type of investment arrangement. Contact your local or national Angel network for information about EASY - or look it up on the BBAA website www.bbaa.org.uk

I am excited about going to North America and seeing if I can start some cross border investing. It also makes a great deal of sense for the angel. It helps diversify your risk but the appeal is wider than that.

Angel investing is an emotion led activity - as a business activity it does not make sense (you are much more likely to lose your money than make any!) So therefore most of us do it because we enjoy it. I love Italy and if I was to invest in Italian Companies, I would have more of a business reason to go there. However, there is no way that I would want to invest in foreign companies unless I knew other locally based angels or networks that were supporting the activity.

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Hello readers. Welcome to the review of the last episode of the current series. I hope you have enjoyed these blogs - what should I write about instead on a weekly basis?

The first presentation was from the founder of “Baby Loves Disco”. The business works very well in the USA and someone wanted to buy the franchise in the UK. I was confused straight away. Why is a successful entrepreneur prepared to give a franchise to someone who needs to go to Dragon’s Den to get funding? Ignoring this, the business had very strong projections going forward. However, the US business has performed very poorly. $50,000 profit for a year after being based in 30 cities is very poor. Then they do the thing that really annoys me as an investor. They talk about “the real revenue coming from sponsorship and brand exploitation”. If that is what you are pitching - then pitch that. I see too many businesses which present one thing, but then say the revenue will come from another area.

The fact that they had got Universal records to sign up for a deal with them was great - but the fact that they had not put any money into the deal suggests that Universal did not value the “brand equity” that highly. To my complete surprise they were made an offer of the full £100,000 but for 40% of the business. They tried to negotiate and they did a good job but eventually they declined - Idiots! (I don’t often say that when people say no to a deal).

This reminded me of a business I really liked about four years ago. It was a food business based in Croydon that had gone nowhere in twelve years. I liked the brand and the food offering and asked to see the founder. We met and I spent a lot of time trying to work out a proposition for him (at great expense I must add) to try and get a roll-out plan going. The person in question turned out to be very greedy and actually just wanted a very high salary. He wanted a ‘consultancy’ fee for every store that opened up on top of a massive equity stake. The deal fell through and I backed Amano instead. I saw the original entrepreneur two months ago and he still had the one store and was lamenting the fact that he has not moved beyond one store. As always, he saw the fault as lying elsewhere and not with his own attitude.

The second proposition was a non-spill water bowl for a pet (dog). It was a great idea and she had already sold 22,000 units. She was looking for money to expand into the USA. (First tip - she should be presenting to US based angels) I liked it a lot and decided in the first 5 minutes that I would like to explore this. My problem is that I would like to see some US management on the board. The US is a very difficult market to crack - a very tough market. It requires a huge amount of cash and expertise. So if you are looking to propose a business plan which requires sales into a particular sector/ region etc - make sure you can demonstrate that expertise on board. She also was going into the US market too soon. I learnt from my experience at Blueback that you have to have strong foundations before you start building expansion plans. This was the reason Theo (one of the dragons) gave for not investing.

The final presentation was from a company that created a waste recycling business focused on the construction sector. The most impressive fact was that in just 15 months, the business had built up a turnover of £350,000. This business was really taking advantage of STEEPL factors. The business environment is going their way and I would have wanted to find out more with a view to backing this business. I would want to know about management expertise and credibility. The great thing was that the business will be taking advantage of changes in the law which will make this a mandatory purchase rather than a discretionary purchase (I love that as it becomes a much easier sell). As the presentation went on, I liked the business more and more. Not surprisingly he was made an offer but I was surprised that he was not made an offer from every dragon. He was made an offer for £200,000 for 40% of the business which he accepted. For a start up in a growing sector with £350,000 of turnover, he was robbed! I wish him the best of luck. If the deal falls through - I hope he contacts me!

Well I hope you have enjoyed reading these reviews.  Before the next series there will no doubt be other business programs to review. Please let me know of any great business programs that catch your attention!

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