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But welcome to

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the M&A using the show for acquisition Entrepreneur

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Search funders and holdco builders across the UK and Europe.

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We regularly dive into real world stories and strategies and challenges

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behind buying and building assemblies and whether you're just starting out

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or you have a wide

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portfolio of companies, this is your space to learn, share and inspire.

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And in the next in our series of interviews today, I'm joined by

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Sam Simpson.

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Sam is an excited founder and angel investor,

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CEO of Founder, Catalyst and co-founding CEO of Forge Technologies and Ongoing Buy

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and Build platform of digital and cloud services businesses.

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Sam is frankly a modern day polymath, qualified in quantum physics

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and most relentlessly hard working leader I've met and one of the nicest human

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being human beings I've had the privilege to know.

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He was also one of the first investors and operators I recall having ever met

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who had deep experience of both angel investing in venture opportunities

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and in growing equity and established companies through buyouts.

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So, Sam, it's an honor to have you with us, sir.

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Thanks for joining us today. Great to be here. Thanks, Gareth.

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So every founder faces challenges, but what would you say are

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the universal hurdles that entrepreneurs encounter regardless of the industry?

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And how have you personally navigated them in your career?

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This was a lesson, really in my first brush with entrepreneurship.

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You go in naively thinking everything will be great

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and you're not really sure what to focus on.

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And for me, it came down to three CS,

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which is, you know, a relentless focus on customer.

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A relentless focus on colleague.

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Are you surrounding yourself by the right people

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and, you know, a relentless focus on commercial as well.

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And yeah, all of those three lessons were hard learn.

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And there is a great, great saying in the startup world, which is first time

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founders focus on products, second time founders focus on distribution.

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And that is, you know, if there's one takeaway from today, I would say learn

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that and make sure you, you know, relentlessly pursue that.

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So how exactly did you learn that?

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Because your entry into entrepreneurship has an interesting origin story.

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Having worked previously in a fast growth piggy

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backed company, which reached about 415 million in revenue.

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And how did the ending of

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that story of that origin story spark entrepreneurism for you?

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Yeah, I guess a lot of those lessons

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subconsciously in that journey with the company come to me too.

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So my first small foray into

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becoming an entrepreneur, I started a company called Eve actually,

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which was Acqui hired back in the day by a company called Prime Business

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Solutions, which was then acquired by Twitter.

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And to me

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too, was a buy and build piggybank, loads of bank debt, as you would expect.

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And that grew from, you know, just a group board

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with with zero revenue to about 450 million revenue over 15 or 16 years.

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So it's one hell of a journey with about 14 or 15 acquisitions.

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My goodness, that's really good fun. Until it wasn't.

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And, you know, I guess the colleague thing there, I surrounded

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myself was lucky to be surrounded by just some amazing, amazing people

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and lots of those I still work with to this day.

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And how did the 2e2 story end?

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I've been very, very badly, as I've alluded to.

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So I mean, in hindsight went very well for me.

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But at the time it didn't feel like it.

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It's all so typical story by and build, you know, loads of bank debt.

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The bank debt, lots of it were loan notes

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which were collected in 2008 roughly and 18% interest.

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So the company was profitable, 450 million revenue, about 10%.

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EBIDTA So you got great EUR 45 million

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a year, but that's earnings before interest obviously.

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And the low notes were, you know, you haven't you were paying 18%

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and when you got £300 million worth of loan notes of bank debt and B

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so the cash you were making was going to the lenders.

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Yeah. And, and more and, and all unraveled.

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It was January 2013. I remember it very well.

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It was the end of January 27th of January 2013.

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Yeah.

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There was I knew things were anybody but 700

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people were called onto a conference call which is pretty soon thank God.

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700 people on a conference call.

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All told, the company is in trouble.

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You're all made redundant.

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There's no pay for January,

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no pay in lieu of notice, no redundancy pay, no expenses, no nothing. Wow.

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They ran it right to the end. Yeah, they run it to the wall.

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I run out of cash.

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I think they were hoping that, you know, the banks

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or somebody else would have chipped in.

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It was, frankly, unthinkable that a 450 million revenue

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business can disappear like that, but genuinely have the assets in there.

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No, there was nothing.

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It was a it was lots of people, you know, they rented some datacenter

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probably in the long term contracts.

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We were

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the biggest asset, but there was nothing, nothing tangible that you could sell.

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Yeah, it was carnage.

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The first day, 700 people out of two and a half thousand employees were let go.

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The next day, another conference call with 700 odd people.

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I actually got to witness a administration and process liquidation process.

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I was I was actually the most senior person to survive the journey,

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which is not great. I collected it.

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I mean, it landed on your shoulders.

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Any of it

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I worked on is interesting because I got to work

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with the liquidators, which was a fascinating process.

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It was all behind the veil.

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Yeah, it was.

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Seeing how they can operate is genuinely terrifying.

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And it was, you know, heart wrenching I'd worked for was pretty much my first job.

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But it, you know, I joined them as the most junior engineer.

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I ended up as the head of project services.

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We have 130 people working for me in about £230 million with run rate projects.

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So I'd kind of go on a really long

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journey was kind of the only thing I, I knew from a career perspective.

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I had no foresight that those hundred and 50 people

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were for the off as a consequence of the mass redundancies, like,

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you know, privileged inside information about not not at all.

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I mean, you know, you get to see some of the issues

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being kind of a member of senior management.

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So you get to see the issues.

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But it was unthinkable really, that the business could be could collapse

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and you would have expected that somebody P or whatever would have tried doing a,

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you know, break it into bits and sell the bits off a high ruptured?

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Yeah, absolutely not.

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They threw the keys in, walked away and my guess and that was that.

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Well well that was what,

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12, 13 years ago now coming up with it.

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And how did that process or that endgame changed your worldview

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at the tender age that you were when you were in that situation?

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Let's put it this way.

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I'm never going to rush and say banged into any of my businesses.

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And I have a very strong aversion

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to institutional cash as well.

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Probably an excessive

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fear of what that can do, having been having seen it firsthand.

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So, yeah, at that point I made a promise to myself, you know, always be my own

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boss, never take private equity, cash and do everything I can to avoid,

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you know, debt by solutions as well, because I don't think they're a great fit

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for lots and lots of businesses unless you you know,

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unless you can do invoice factoring.

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Well, you know, you're rich in assets you can leverage a mortgage against.

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Yeah. Yeah, sure.

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Debt service cover ratio is vital.

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And if you are

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running up against the wire, then yes, you probably already lost the battle.

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Maybe.

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Or at least made your life more difficult in the process.

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Exactly.

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So coming out of that situation,

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you obviously get to go on to talk about some of the more successful

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chapters of your career, but I think it might be worth touching on

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another life lesson learned along the way, because you've done a few acquisitions

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and certainly in the early stages when you're cutting your teeth,

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you made what could be termed an ill fated acquisition of an event space company.

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I know I'm jumping around a little bit in the career time

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frame here, but just while we look, talking about, you know,

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adverse life experiences and lessons learned, how did that play out?

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Yeah, that was, again, not a great lesson.

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I've got a few horror stories and this is this is probably the most painful for me.

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So after I successfully and we all jumped forward,

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but I successfully exited my business, was looking for something to do and,

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you know, a bit of angel investing here and there and

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one of my friends contacted me and said, There's events business.

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It's about to go into administration.

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You know, the landlord's looking for somebody to pick it up.

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Is it worth a challenge, Right?

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Yeah, of course.

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So I've been kind of on the administrator's side,

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not on their side, but I kind of seen that side.

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So, like, how difficult could it be to play the game with administrators?

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And anyway, we put an offer in for this business

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and it was amazing.

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The first I remember the day we took over the whole event space that we owned was

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was rented out to Microsoft and they had Satya Nadella over doing a well.

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Yeah. So, you know, it was a really premium space.

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They were, they were doing their European Tech launch of an API.

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Yeah, I think so.

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It was really, really interesting.

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And they had lots of,

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you know, lots of high profile customers and things like that.

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And it was all going well. You know,

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we could see the attraction of it if that's the thing turned.

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And yeah, it was a big play as well and things like that anyway.

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So that was going really well until it didn't, until COVID happened.

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Cove It happened and the government obviously said, you know,

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there were no events, you weren't even allowed to work in offices.

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So that pretty much mothballed the business and there was no age.

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There was no financial assistance for that sort of asset.

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There was some, but yeah, it couldn't save us from, unfortunately, the landlord.

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So when the restrictions were limited, the landlord said, Well, great, we'll give

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you a, we'll give you a flat on the,

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on the rent for the, for the space over the period.

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But you're over self service charge of a million quid.

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We were like right.

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Well you know, we kind of used the space we couldn't have.

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So that was it.

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We threw the through the keys in at that point.

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So that was a, goodness me, it was just, just a matter of timing.

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And, you know, we won't be the only

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kind of events business to go bang during the cold. no.

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Of plenty of casualties.

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I think you're in good company term, but yeah, how could you have ever foresaw

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how could any of us ever foreseen those those situations.

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Okay.

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So you know, they didn't let it you didn't let it stop you

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because obviously you've gone on to bigger and better things.

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But the precursor to that from whence the capital to to

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make those

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experiments came from was obviously rock

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where you were were part the early team, part of the founding team.

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Yeah.

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Which, which had the happy ending

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took us through the sort of the trajectory that because it seemed to happen

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all very quickly it was it was quite an accelerated

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trajectory eventually exiting I think for an embryo to.

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BGF Yeah, yeah.

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So yeah, that was a fantastic journey.

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I know you know frankly to me to collapse and they hate me in three of my,

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three of my colleagues from the Timi two days went, well,

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this is all very unfortunate.

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Should we go and do something else?

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And then,

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yeah, set up technologies.

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We actually stepped into a shell business that already existed, which is useful

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so we didn't have to worry about, you know,

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create a bank account insurance incorporating.

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And how did you go about coming by that business. Wait, wait.

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At the shell company, it was one shell and that was one of our

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one of the other three already had a business

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which was incorporated, sidestepped into that. Very good.

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So you could hit the ground running.

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We could.

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And the best decision I've ever made in my life, we

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we stepped into the

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business and we did so via invest in our own business via CEO.

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So me and the other genius.

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Yeah well yeah it's we,

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me and my three co-founders, we all put £20,000 in

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at the point.

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It seemed like a really good deal because you get £10,000 back and you know,

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that's a lot so useful.

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And of course no one owns 30% of the business because we,

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the four of us, we all own 25% say yes, we invested in the business under us,

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put 20 grand in, got ten back, that was all very good and then forgot

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about us until later down the line when all of a sudden it became very,

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very, very important.

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Yeah.

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And the business went really well.

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I think within our first two months we did half a million in revenue.

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Within the first year

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we did 4.8 million and pretty much doubled up, doubled up, doubled up.

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Where were you finding that business?

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Was there some hangover that some low hanging fruit

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you could pick up from Tui two or was it an entirely different proposition?

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Yeah, that's a really good question.

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And yeah, we weren't just really great at selling of really lucky what we did.

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We looked at colleagues from Tui too and said, Who do we really know and love that

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which people would we absolutely choose to have in our team moving forward?

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We picked up the phone to them and you know, there was,

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there were two guys

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who were the only people in the UK who knew how to run a major supermarkets

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following, for example, we picked up the phone

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to those guys and said, You, you're to come and work for us.

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We'll give you exactly the same salaries.

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So we do, you know, we won't miss a beat.

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We'll pay you from day one then a lot of neglect. Yeah, absolutely.

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So we went from the four of us to, I think, 30 employees within a month,

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all bringing their book with them all bringing that book and then, you know,

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you had the opposite side of the conversation.

00:13:05:26 - 00:13:08:09
You phoned up the major supermarket, right?

00:13:08:09 - 00:13:10:06
So these two people now work for us.

00:13:10:06 - 00:13:11:26
Do you want us to keep looking after your foibles?

00:13:11:26 - 00:13:13:31
And we'll do on the same deal that we do?

00:13:13:31 - 00:13:15:06
Yes, please.

00:13:15:06 - 00:13:19:23
So yeah, so we ended we went from zero employees

00:13:19:23 - 00:13:23:08
to 30 employees in a month or two, which in some ways is great

00:13:23:08 - 00:13:26:10
because they will drive the revenue in other ways was terrifying having what

00:13:26:10 - 00:13:29:23
a sharp growth curve having financially because of that as well.

00:13:29:28 - 00:13:30:02
Well, yeah,

00:13:30:02 - 00:13:33:02
just the working capital requirement from a standing start is a tough one.

00:13:33:10 - 00:13:35:29
Exactly. So your clients aren't going to pay you upfront.

00:13:35:29 - 00:13:39:28
No. And supermarkets don't for put in their pocket or for paying quickly.

00:13:39:28 - 00:13:40:22
Yeah.

00:13:40:22 - 00:13:45:25
Is so we started the business in literally February 2013

00:13:45:27 - 00:13:47:10
and the major supermarket

00:13:47:10 - 00:13:51:14
I'm talked about paid their first invoice in November of that year and cash

00:13:51:17 - 00:13:54:17
cash is king first of all business then with the growth curve anyway.

00:13:54:24 - 00:13:58:03
So yeah we went from we did

00:13:58:06 - 00:14:01:15
5 million revenue in the first year, double double W

00:14:01:18 - 00:14:04:29
we picked up Sun Times Tech track, second fastest growing company

00:14:04:29 - 00:14:09:09
in the UK and Financial Times 17 fastest growing company in Europe,

00:14:09:12 - 00:14:10:18
which was perfect timing

00:14:10:18 - 00:14:14:01
because we'd already had a conversation about a potential exit.

00:14:14:03 - 00:14:17:20
Now two of my co-founders wanted to do it by a build strategy,

00:14:17:20 - 00:14:20:26
so they wanted to take cash loads of bank debt and go and hoover up some.

00:14:20:26 - 00:14:23:07
Of course, you've seen how that had played out previously.

00:14:23:07 - 00:14:26:12
Yeah, if you remember, I said 10 minutes ago, my appetite for doing a buy

00:14:26:12 - 00:14:29:12
and build was absolutely zero.

00:14:29:14 - 00:14:31:25
So yeah, we did the usual, you know, appointing

00:14:31:25 - 00:14:34:25
corporate finance, found ourselves a good lawyer,

00:14:34:28 - 00:14:39:02
went through the process of yeah, doing a beauty parade and writing

00:14:39:02 - 00:14:43:08
and I am and sending that around and, you know, timing was perfect.

00:14:43:08 - 00:14:45:31
We were really hot property due to winning those awards.

00:14:45:31 - 00:14:49:21
And also it was a real great moment for the business growth for BGF

00:14:49:28 - 00:14:55:11
with Stephen Whelton and the team with the, you know, the massive amount of

00:14:55:14 - 00:14:56:08
pension funds

00:14:56:08 - 00:15:00:00
and government money, they were they were allocating

00:15:00:00 - 00:15:03:15
right to just this kind of strong fast growth UK success story.

00:15:03:22 - 00:15:07:13
And I think one place where you can go other businesses on and you know and happy

00:15:07:13 - 00:15:09:14
to take minority positions Yeah well exactly

00:15:09:14 - 00:15:12:15
we make more mezzanine than anything so so is that the sort of deal

00:15:12:15 - 00:15:13:22
that you ended up doing then.

00:15:13:22 - 00:15:17:16
And part of that was to cash in a lot of your secondaries and leave

00:15:17:18 - 00:15:22:19
these guys that wanted to play with the the debt markets

00:15:22:22 - 00:15:23:05
to it.

00:15:23:05 - 00:15:24:04
Yeah, that was exactly it.

00:15:24:04 - 00:15:29:01
So of the four co-founders to left to state

00:15:29:03 - 00:15:31:23
they were it was

00:15:31:23 - 00:15:35:22
an acquisition happened in parallel which was required to make the BGF term.

00:15:35:23 - 00:15:39:18
So yeah there was an acquisition happened in parallel with two of the sexting

00:15:39:20 - 00:15:42:03
and that was a very good deal. I remember.

00:15:42:03 - 00:15:43:17
Well, yeah, yeah.

00:15:43:17 - 00:15:47:23
And played out well since well and and yeah it's a go back to why

00:15:47:26 - 00:15:48:32
some people on the podcast

00:15:48:32 - 00:15:51:21
listen to the podcast may not understand the importance of this.

00:15:51:21 - 00:15:54:11
So I put 20 grand in, I got ten grand back.

00:15:54:11 - 00:15:59:00
The other benefit I had was complete CGT exemption so didn't pay us.

00:15:59:02 - 00:16:01:20
I haven't even touched my entrepreneur's relief

00:16:01:20 - 00:16:04:31
will be ideal as it is now course because it's ringfenced outside of that.

00:16:05:02 - 00:16:07:23
Exactly. Yeah. So I didn't I didn't pay a penny on tax and an exit.

00:16:07:23 - 00:16:09:30
So the best decision I've ever made.

00:16:09:30 - 00:16:15:09
And one thing that amazes me still, gov, there are so many people

00:16:15:12 - 00:16:16:15
specifically in the startup

00:16:16:15 - 00:16:20:04
space who could be making use of themselves as founders.

00:16:20:06 - 00:16:24:06
And then I was too much hassle what I'm like paying 24% CGT on an exit.

00:16:24:07 - 00:16:27:03
Now that's a hassle to spending a couple of grand

00:16:27:03 - 00:16:30:09
to get yourself as the eyes on founder shares is yeah

00:16:30:12 - 00:16:33:20
I mean it should be elementary it's it's it's absolutely

00:16:33:22 - 00:16:37:07
table stakes frankly and with that we'll come on to

00:16:37:14 - 00:16:41:11
how your current one of your current businesses serves that market.

00:16:41:13 - 00:16:45:25
But yeah absolutely if you haven't considered for your activities

00:16:45:27 - 00:16:49:14
in terms of seeding your initial acquisition vehicle

00:16:49:17 - 00:16:52:32
you tread carefully because acquisitions could compromise it.

00:16:52:32 - 00:16:58:06
But yes, there is there is definitely gold in them there. Yes.

00:16:58:09 - 00:17:01:01
So you you've exited

00:17:01:01 - 00:17:05:26
rock and you've gone on via one

00:17:05:29 - 00:17:08:14
unfortunate incident with the event based company,

00:17:08:14 - 00:17:12:20
but you've gone on to effectively found one business and co-found another.

00:17:12:20 - 00:17:13:00
I talked to you,

00:17:13:00 - 00:17:16:26
co-founder of both businesses, Right, Because you've got teams in either.

00:17:16:29 - 00:17:18:02
So found the catalyst.

00:17:18:02 - 00:17:19:25
Give us a bit of an explanation of that.

00:17:19:25 - 00:17:23:09
And while you're at it, you're you're buying build strategy that you have

00:17:23:11 - 00:17:26:13
inadvertently found yourself it with forge Technologies.

00:17:26:13 - 00:17:27:08
Yeah. Yeah.

00:17:27:08 - 00:17:33:05
So yeah, I kind of when I when I exited Rock Technologies,

00:17:33:05 - 00:17:37:04
I promised myself I'd never work in another i.t company I had spent all of

00:17:37:04 - 00:17:39:11
my life in, I'd say, and I'm like, I think I'm done with this now.

00:17:39:11 - 00:17:41:21
I think there's lots of fun things to do.

00:17:41:21 - 00:17:44:18
And so I started angel investing

00:17:44:18 - 00:17:48:27
and over the last eight years I've got 33 investments

00:17:48:29 - 00:17:50:03
and I got some real horror stories.

00:17:50:03 - 00:17:51:20
I don't think we got long enough to cover them.

00:17:51:20 - 00:17:54:17
I mean, similar portfolio and similar, similar stories.

00:17:54:17 - 00:17:56:31
So that's maybe for a different podcast than it is.

00:17:56:31 - 00:17:58:05
It is, but but anyway, yeah.

00:17:58:05 - 00:18:01:04
So I started Angel investing and what makes me, I kept going

00:18:01:04 - 00:18:04:25
to loads of great loads of pitch events, bumping into really amazing founders

00:18:04:25 - 00:18:08:11
who had great ideas, who just had no idea how to do a funding round.

00:18:08:13 - 00:18:12:02
They didn't understand CCI or advance assurance or term sheets,

00:18:12:05 - 00:18:15:17
didn't understand valuation or where to find invested and what This is bonkers.

00:18:15:17 - 00:18:17:17
This is all elementary.

00:18:17:17 - 00:18:20:25
So my original idea was to write a bunch of content

00:18:20:25 - 00:18:24:08
and give it away for free, and which we've done anyway.

00:18:24:16 - 00:18:26:23
But then I realized actually there's a platform play here.

00:18:26:23 - 00:18:31:18
There's a gap in the market to offer cost effective services around everything

00:18:31:18 - 00:18:32:18
I've mentioned around

00:18:32:18 - 00:18:36:03
helping founders navigate that journey, producing the funding round Legal's,

00:18:36:11 - 00:18:39:32
managing the workflow between founders and investors, doing advanced insurance

00:18:39:32 - 00:18:40:32
and that kind of stuff.

00:18:40:32 - 00:18:45:03
So I started found a catalyst with a very dear friend I've known

00:18:45:03 - 00:18:50:22
for decades, the lawyer who helped me set up rock technologies back in the day.

00:18:50:25 - 00:18:52:20
Yeah, we started Family Catalyst two

00:18:52:20 - 00:18:54:24
and that was for me, Structure and Edge is doing something

00:18:54:24 - 00:18:58:16
in a completely different area, and it's very humbling actually, because it's

00:18:58:16 - 00:19:02:29
my first step into a SAS business, which is fundamentally different.

00:19:02:29 - 00:19:04:21
But yes, very different challenges.

00:19:04:21 - 00:19:07:05
Yeah, Yeah. It's been a really interesting,

00:19:07:05 - 00:19:09:06
really interesting learning curve, that's for sure.

00:19:09:06 - 00:19:12:06
And there was there seemed to be a degree of altruism about

00:19:12:10 - 00:19:15:28
found a catalyst, which but, you know, it is a very commercially sensible business

00:19:15:28 - 00:19:19:30
but you, you didn't emulate others that were also building platforms

00:19:19:30 - 00:19:24:20
for founder documentation at that time and go after percentage of the funds

00:19:24:20 - 00:19:28:17
raised using the paper route which I thought was a really genuine thing

00:19:28:17 - 00:19:31:32
to do in support of the founder ecosystem or the innovation economy

00:19:31:32 - 00:19:33:28
because you know, there are a lot of families out there

00:19:33:28 - 00:19:37:17
getting fleeced for using this kind of boilerplate documentation

00:19:37:20 - 00:19:41:10
and then being billed a percentage of the funds raised during it

00:19:41:10 - 00:19:45:28
using that documentation, which seems counterintuitive really, for a company

00:19:45:28 - 00:19:49:02
that needs all the capital it can get at the early stage of its existence.

00:19:49:02 - 00:19:51:10
But you chose to go the fixed fee route

00:19:51:10 - 00:19:55:01
and you know, the all you can eat route, which I thought was really wonderful.

00:19:55:08 - 00:19:56:15
Yeah, clearly

00:19:56:15 - 00:19:57:20
the sort of decision you can only make

00:19:57:20 - 00:20:00:09
if you don't have external shareholders to have to place, of course. Yeah.

00:20:00:09 - 00:20:02:08
And you know, I guess there's two reasons for that.

00:20:02:08 - 00:20:06:04
Like you say, the commercial model of some of the other providers

00:20:06:04 - 00:20:07:11
just doesn't sit well with me.

00:20:07:11 - 00:20:10:09
It feels predatory and I didn't like it.

00:20:10:09 - 00:20:13:09
And secondly, I mean, that really, really lucky position where, you know,

00:20:13:11 - 00:20:15:13
I don't need to tell you I need to earn any money,

00:20:15:13 - 00:20:19:06
I don't need to make a living anymore so I can do things with different motivation.

00:20:19:11 - 00:20:19:23
I guess.

00:20:19:23 - 00:20:25:18
Thirdly, I needed a way to differentiate family catalyst and by offering

00:20:25:21 - 00:20:28:16
hand-held handholding through the process by somebody

00:20:28:16 - 00:20:32:10
who's been through the process, exited successfully and is an angel investor.

00:20:32:17 - 00:20:36:09
Plus offering a very different commercial model is a great way of differentiating

00:20:36:09 - 00:20:36:25
the business.

00:20:36:25 - 00:20:40:28
Yeah, now I think it's played out in the community you've built and the

00:20:40:30 - 00:20:44:32
the high net promoter score that founder Catalyst achieves.

00:20:44:32 - 00:20:48:11
And yeah, it's, you know, it's chalk and cheese in comparison to the other options.

00:20:48:11 - 00:20:51:21
So really great to see how that's flourished. But

00:20:51:23 - 00:20:53:20
I guess the cornerstones of one of the questions you're given.

00:20:53:20 - 00:20:55:13
So that was rock technology, which is true.

00:20:55:13 - 00:20:59:26
Yeah that was that was of let's get on to forge Forge technologies is my Yeah.

00:20:59:26 - 00:21:03:31
Is is my new I.T company and I said I would never open another

00:21:03:31 - 00:21:07:29
i.t company but I had fear of missing out one of my dear friends, Jeremy.

00:21:07:29 - 00:21:10:29
We'd work together in prime business solutions then to be to.

00:21:10:30 - 00:21:15:02
I'd poached him into rock as our CTO

00:21:15:05 - 00:21:18:05
and he was still in there at this point

00:21:18:10 - 00:21:20:08
and he introduced me to a couple

00:21:20:08 - 00:21:23:33
of his colleagues from a company, Ocean, and I poached Jeremy from there.

00:21:23:33 - 00:21:26:20
So I was a little awkward, but we got over that quickly.

00:21:26:20 - 00:21:27:28
And the I.T.

00:21:27:28 - 00:21:31:03
industry is incredibly incestuous, as you know. yes.

00:21:31:06 - 00:21:31:25
Anyway, yeah.

00:21:31:25 - 00:21:35:29
And the three of them were looking to start up an i.t company and said,

00:21:35:29 - 00:21:39:24
Do you want to come along based upon your experience in 2d two in rock?

00:21:39:24 - 00:21:40:20
And you know,

00:21:40:20 - 00:21:43:19
that feels to be a, you know, a gap in the team that you can fulfill.

00:21:43:19 - 00:21:44:17
Absolutely can't be.

00:21:44:17 - 00:21:46:27
And I had massive fear of missing out.

00:21:46:27 - 00:21:50:21
I'm really glad I would have been easy for me to spend all of my time on,

00:21:50:22 - 00:21:53:08
found the car less and miss out on the fun that is forced out of you.

00:21:53:08 - 00:21:56:24
So I'm really glad I did that and

00:21:56:27 - 00:21:58:27
we are absolutely not going the two easy route.

00:21:58:27 - 00:22:01:18
We're not taking on any external debt.

00:22:01:18 - 00:22:01:32
Interesting.

00:22:01:32 - 00:22:04:01
So but it is it has done some acquisitions for

00:22:04:01 - 00:22:08:20
which has been acquiring some businesses quite avidly in recent months.

00:22:08:20 - 00:22:11:07
I mean it was formed in 2021. Yeah.

00:22:11:07 - 00:22:13:20
And how many acquisitions has it got under its belt now?

00:22:13:20 - 00:22:15:27
We've got a couple, but they're mainly acqui hire.

00:22:15:27 - 00:22:16:28
So they are.

00:22:16:28 - 00:22:19:27
Yeah, they are aqua as they are people we know from the industry.

00:22:19:27 - 00:22:22:27
The benefit of having, you know, having worked into two

00:22:22:30 - 00:22:26:02
and having two and a half thousand people exploding into the rest

00:22:26:02 - 00:22:29:28
of the kind of i.t ecosystem, it's created a diaspora.

00:22:29:29 - 00:22:30:24
Yeah.

00:22:30:24 - 00:22:33:30
And lots of people that we know are doing really interesting things.

00:22:33:30 - 00:22:38:01
And the most recent acquisition I'll talk to was a company called Over.

00:22:38:01 - 00:22:43:11
I know Caleb and Stuart from, you know, 28, 27, 28, something like that.

00:22:43:11 - 00:22:47:03
Really amazing guys with totally different skill sets of anybody else in 4G

00:22:47:03 - 00:22:52:00
technologies and they made such a natural bolt on to the existing services.

00:22:52:00 - 00:22:53:31
Forge at that point was all infrastructure.

00:22:53:31 - 00:22:56:16
You know, it was networking and desktop and cloud.

00:22:56:16 - 00:22:59:23
So that kind of the more lower level infrastructure and these guys played

00:22:59:24 - 00:23:02:24
a, you know, business process re-engineering

00:23:02:24 - 00:23:06:10
all of the kind of mix of how would be okay consultancy.

00:23:06:18 - 00:23:10:08
So it sits over the top of the firm entirely complementary to what we did

00:23:10:08 - 00:23:10:25
already.

00:23:10:25 - 00:23:15:11
And and it's created a lovely, you know cross-sell upsell opportunity.

00:23:15:11 - 00:23:19:11
All of our existing customers where we're delighting with services

00:23:19:11 - 00:23:20:22
in the infrastructure,

00:23:20:22 - 00:23:23:01
they are very open to having conversations Where we go, we,

00:23:23:01 - 00:23:25:23
we think you can optimize this part of this application or

00:23:25:23 - 00:23:28:15
you could be doing this very differently, or why are you doing

00:23:28:15 - 00:23:30:01
integration and automation here?

00:23:30:01 - 00:23:32:16
They're very open to having those conversations because,

00:23:32:16 - 00:23:35:17
you know, we've earned the right to sit at the top table and hopefully

00:23:35:20 - 00:23:39:09
it wasn't just about these guys bringing their book with them, you know,

00:23:39:09 - 00:23:44:09
it was also about being able to sell more services to your existing customers

00:23:44:11 - 00:23:48:01
and increase your average revenue per customer, just which is genius.

00:23:48:04 - 00:23:49:26
And also drive us up the food chain. Yeah.

00:23:49:26 - 00:23:53:19
And the infrastructure stuff gets you so far, but

00:23:53:22 - 00:23:54:22
yeah, these guys that

00:23:54:22 - 00:23:54:30
how to

00:23:54:30 - 00:23:56:30
have a very different dimension and allow us to have

00:23:56:30 - 00:23:59:02
a different conversation with the customer as well.

00:23:59:02 - 00:24:02:05
So how do you split your brain into because these are two,

00:24:02:09 - 00:24:05:32
you know, vibrant, fast growing businesses in three different camps.

00:24:05:32 - 00:24:07:12
I'll be interested if there's any synergies

00:24:07:12 - 00:24:09:00
that you've discovered between the two. Yeah.

00:24:09:00 - 00:24:12:00
How do you have the discipline to sort of time box and make sure

00:24:12:00 - 00:24:15:06
that you are giving attention to each where it needs it?

00:24:15:09 - 00:24:18:01
Yeah, I think I was somewhat naive and brave

00:24:18:01 - 00:24:20:11
when I started both that pretty much the same time.

00:24:20:11 - 00:24:22:22
and by the way, I have my daughter Skye, who,

00:24:22:22 - 00:24:25:08
you know, somewhere during the COVID period as well.

00:24:25:08 - 00:24:28:02
So yeah, the timing was interesting.

00:24:28:02 - 00:24:32:00
And I guess to come to Sitges on time, let's cover that one first,

00:24:32:00 - 00:24:35:06
because what I've tried to do, what I have absolutely

00:24:35:06 - 00:24:39:17
done is try to standardize wherever possible across the businesses.

00:24:39:19 - 00:24:43:03
So, you know, I'm responsible in both of them for back office functions

00:24:43:03 - 00:24:43:23
and things like that.

00:24:43:23 - 00:24:45:22
So we've got a degree of automation built out there.

00:24:45:22 - 00:24:48:04
Yeah, we're using the same automation in both.

00:24:48:04 - 00:24:52:03
So we're using the same systems, the same automation, the same accountant,

00:24:52:06 - 00:24:55:20
the same lawyers, we're using the same employment contracts where

00:24:55:27 - 00:24:59:25
so the standardization across the because context switching.

00:24:59:28 - 00:25:01:11
Am I reading this paperwork?

00:25:01:11 - 00:25:04:16
It would just be, you know, just be ready to I'm wielding and horrible.

00:25:04:20 - 00:25:05:26
So that's the first thing.

00:25:05:26 - 00:25:11:06
The second thing in both businesses, we have incredible management teams.

00:25:11:08 - 00:25:12:27
That's probably a lesson of

00:25:12:27 - 00:25:18:04
in rock technology is we from day zero pretty much until the end of of them

00:25:18:04 - 00:25:22:01
recruiting Jeremy as our CTO, it was the four of us that ran

00:25:22:01 - 00:25:25:07
the business at the coalface and we were integral

00:25:25:07 - 00:25:28:21
to the business, which creates a scalability problem.

00:25:28:24 - 00:25:30:26
It's a hub and spoke problem isn't this bottleneck

00:25:30:26 - 00:25:32:29
in a succession planning if you're looking to exit?

00:25:32:29 - 00:25:37:09
We we got away with rock but see the master's of delegation now

00:25:37:12 - 00:25:38:15
I'm not quite there.

00:25:38:15 - 00:25:41:30
I'm a control freak, which is a problem

00:25:41:33 - 00:25:44:22
but yeah in both business.

00:25:44:22 - 00:25:44:29
Yeah.

00:25:44:29 - 00:25:48:08
In Forge Technologies we've got an amazing

00:25:48:11 - 00:25:51:32
ops director who I've known for, you know, a dozen years.

00:25:52:01 - 00:25:55:29
We've got amazing sales director who took a competitor from,

00:25:55:29 - 00:25:58:07
I think, 8 million to 100 million revenue.

00:25:58:07 - 00:25:58:30
So we've got those.

00:25:58:30 - 00:26:02:33
We've invested really, really early on in a management team that can, you know,

00:26:03:01 - 00:26:06:01
take us from 5 to 5 times at least the size we are.

00:26:06:01 - 00:26:07:23
Five times. Yeah, marvelous.

00:26:07:23 - 00:26:09:10
Hopefully. Well, that's, you know, fingers crossed.

00:26:09:10 - 00:26:11:29
Well, as we say, is that the ambition or I mean,

00:26:11:29 - 00:26:15:11
the plan in Rock technologies was never to actually build for an exit.

00:26:15:11 - 00:26:18:03
It was to permanent ownership as

00:26:18:06 - 00:26:18:15
well.

00:26:18:15 - 00:26:19:12
In rock technologies.

00:26:19:12 - 00:26:22:29
That was yeah, that wasn't our plan was to build a business.

00:26:23:02 - 00:26:26:15
So to be to it morphed into a business

00:26:26:15 - 00:26:29:15
that none of us particularly liked and none of us enjoyed working.

00:26:29:19 - 00:26:32:32
And that's, I think that's by the nature of the way it was funded,

00:26:33:01 - 00:26:36:04
having loads of bank debt and banking covenants to worry about it

00:26:36:04 - 00:26:39:00
drives the business in a very particular way, working for. Yeah. Yeah.

00:26:39:00 - 00:26:40:32
And do you enjoy the work?

00:26:40:32 - 00:26:43:00
Yeah, it's a slippery slope isn't it?

00:26:43:00 - 00:26:43:29
So when we started rock,

00:26:43:29 - 00:26:46:21
actually we're like, Right, well let's focus on building a business.

00:26:46:21 - 00:26:48:15
We're proud of building business

00:26:48:15 - 00:26:50:31
our colleagues want to work with, and our customers, you know, don't feel

00:26:50:31 - 00:26:54:28
they're being chased for every penny because so we focus on that.

00:26:54:28 - 00:26:58:29
And I think in Rock the Exit was just opportunistic based upon

00:26:58:32 - 00:27:03:20
some conversations we had and also a diverging in,

00:27:03:22 - 00:27:05:31
you know, in design, you know,

00:27:05:31 - 00:27:08:01
part of the management team wanted to do a buy and build the other.

00:27:08:01 - 00:27:10:06
Paul absolutely did not want to do that.

00:27:10:06 - 00:27:13:06
So you know, that was going to come to a crunch at some point.

00:27:13:13 - 00:27:16:29
I think, you know, the motivation is the same and we want to build a business.

00:27:16:29 - 00:27:18:25
We all,

00:27:18:25 - 00:27:21:10
you know, we're delighted to work out every day, you know, often,

00:27:21:10 - 00:27:22:27
and our colleagues are delighted to work out

00:27:22:27 - 00:27:24:28
and our customers are delighted with the results.

00:27:24:28 - 00:27:28:07
And I think if you wake up every day and try and do the right things,

00:27:28:07 - 00:27:29:06
then good things will happen.

00:27:29:06 - 00:27:29:16
So there's

00:27:29:16 - 00:27:33:05
no we're not on any fixed trajectory at all actually, in either the business.

00:27:33:05 - 00:27:33:14
I've got

00:27:33:14 - 00:27:37:08
no you know, as you know, I'm massively emotionally attached to found a catalyst.

00:27:37:08 - 00:27:40:01
It's my baby. I can't imagine two like that.

00:27:40:01 - 00:27:41:13
There's definitely a clear sense of mission.

00:27:41:13 - 00:27:43:02
There is definitely.

00:27:43:02 - 00:27:45:09
I could see how it animates you whenever we talk about it,

00:27:45:09 - 00:27:47:20
which is which is, you know, lovely to see.

00:27:47:20 - 00:27:51:03
So but both are permanent place.

00:27:51:06 - 00:27:53:12
Although recently you've had a catalyst, you've recruited

00:27:53:12 - 00:27:57:11
some sort of senior management and your control freak has been

00:27:57:17 - 00:28:01:01
relinquished a little and you've, you've, you've let these guys flourish.

00:28:01:03 - 00:28:03:33
We've got girls flourishing in the team. Yeah, Yeah.

00:28:03:33 - 00:28:06:10
A couple of key hires recently have been. Yeah.

00:28:06:10 - 00:28:09:20
Have been very, very good for my work life balance, let's put it that way.

00:28:09:22 - 00:28:14:02
And even though it's my baby, I guess, you know,

00:28:14:04 - 00:28:16:22
maybe it's a timing thing, but I've spent the last four or five years

00:28:16:22 - 00:28:20:16
in found a catalyst at the coalface doing all customer calls,

00:28:20:19 - 00:28:24:25
solving all customer problems, having every conversation and

00:28:24:25 - 00:28:27:19
and actually, you know, that's selfish of me because I'm

00:28:27:19 - 00:28:30:26
I will end up constraining very, very soon our ability to grow.

00:28:30:28 - 00:28:35:32
So, yeah I've got a new hire Max who's fundamental he's head of sales

00:28:35:32 - 00:28:40:04
partnership growth and marketing who's you know just such a great hire.

00:28:40:09 - 00:28:42:03
Yeah I certainly see that.

00:28:42:03 - 00:28:45:21
And that's a real milestone, I think, for the business to have reached

00:28:45:21 - 00:28:49:30
that point where it actually now starts to take on a bit more of a life beyond

00:28:49:33 - 00:28:53:25
the the original founding team found a letter that was only go so far.

00:28:53:27 - 00:28:55:24
Well, it does certainly many times you could do with them.

00:28:55:24 - 00:28:58:24
I would feel authentic in doing

00:28:58:27 - 00:28:59:04
great.

00:28:59:04 - 00:28:59:18
Okay.

00:28:59:18 - 00:29:02:30
So as I mentioned in the preamble, you're one of the few people

00:29:02:30 - 00:29:06:33
that have got a foot in both venture and and have had some buyout experience.

00:29:06:33 - 00:29:07:06
Right.

00:29:07:06 - 00:29:12:32
And that I've met has got clear opinions and clear perspectives on both both camps.

00:29:13:06 - 00:29:17:24
So I'm really interested in what fundamental differences

00:29:17:24 - 00:29:22:11
you have perceived in the sort of terms of risk profile and operational involvement

00:29:22:11 - 00:29:27:24
and returns patterns between your angel investing and venture activities.

00:29:27:24 - 00:29:29:15
Verses, you know, what

00:29:29:15 - 00:29:31:14
Forge has been up to or what has been happening

00:29:31:14 - 00:29:34:07
in buying builds that you've been involved with?

00:29:34:07 - 00:29:37:04
I mean, they're just fundamentally different asset classes aren't there?

00:29:37:04 - 00:29:41:32
And be like, Yeah, yeah, it'd be like comparing running a business

00:29:41:32 - 00:29:45:24
to, you know, gambling on the stock market or buying Bitcoin.

00:29:45:26 - 00:29:49:14
And I'm not saying, you know, angel investing is like it is.

00:29:49:14 - 00:29:53:18
In fact, you don't say, like you not saying, I'm absolutely saying that.

00:29:53:18 - 00:29:57:05
So angel investing is

00:29:57:08 - 00:30:00:06
yeah, is rolling the dice is putting money into business

00:30:00:06 - 00:30:03:25
and hoping for the best you have unless you're very active in the business,

00:30:03:25 - 00:30:06:33
which is really unusual and certainly I'm not active

00:30:07:02 - 00:30:07:22
across any

00:30:07:22 - 00:30:11:11
of my portfolio other than supporting with funding rounds.

00:30:11:14 - 00:30:13:26
You know, you are putting money in and hope invest and trust

00:30:13:26 - 00:30:14:32
in the management team.

00:30:14:32 - 00:30:18:29
So there is a fundamental difference for me between those venture activities

00:30:18:29 - 00:30:22:09
and the activities I'm

00:30:22:12 - 00:30:23:23
involved day to day.

00:30:23:23 - 00:30:25:01
They're just fundamentally different.

00:30:25:01 - 00:30:27:06
Correlating, of course, with your percentage ownership, right?

00:30:27:06 - 00:30:32:14
I mean, we take these bets on the angel investing portfolios and we're satisfied.

00:30:32:17 - 00:30:33:16
You know, it's someone else's. Got it.

00:30:33:16 - 00:30:36:16
And we're, you know, perhaps hoping for a25 percent

00:30:36:19 - 00:30:40:05
ownership threshold, whereas it's much more material in the companies

00:30:40:05 - 00:30:44:06
that you co-founded or that you acquire whereby, you know,

00:30:44:08 - 00:30:47:01
the slightest sort of, you know, 5% increment decrement

00:30:47:01 - 00:30:50:08
on the EBITDA or either way it has kind of like personal impact.

00:30:50:17 - 00:30:53:08
So that's a massive impact. Yeah. And

00:30:53:10 - 00:30:56:11
you know, I'm never you're never going to be able to retire off

00:30:56:11 - 00:31:00:17
with an angel investment and invest it unless you get it radically right.

00:31:00:17 - 00:31:04:30
You know, early stage and you hit that of Beverly or anything like that.

00:31:05:01 - 00:31:10:17
But so for me they are like any other investment I make.

00:31:10:20 - 00:31:14:21
You know, I'm hoping for a blended three, three and a half, four,

00:31:14:24 - 00:31:18:16
maybe more, if I'm really, really good at betting.

00:31:18:18 - 00:31:20:31
Yeah, that's the kind of

00:31:20:31 - 00:31:24:22
return I'm expecting to have for over a 5 to 7 year

00:31:24:22 - 00:31:28:29
horizon isn't like great IRR really, is it, in the grand scheme of things? No.

00:31:28:29 - 00:31:31:30
But then you fold in tax return tax breaks and blah blah blah.

00:31:31:30 - 00:31:35:10
So and you know, if I'm not putting all of my money into angel investment,

00:31:35:10 - 00:31:38:10
I've got yeah, I've got kind of, you know, a broad portfolio.

00:31:38:10 - 00:31:40:25
It's not all of my eggs in one basket.

00:31:40:25 - 00:31:43:16
I am feeling bruised at the moment so I can tell you one of my stories.

00:31:43:16 - 00:31:46:26
Just one. Yeah. As an angel investor, so

00:31:46:29 - 00:31:49:22
very early stage in a business I don't think is in liquidation yet.

00:31:49:22 - 00:31:52:08
So I won't yet know is imminent.

00:31:52:08 - 00:31:56:15
So very early stage investor in a business I think I've got £50,000 in there

00:31:56:15 - 00:32:01:22
so not a huge chunk but the material not change and

00:32:01:25 - 00:32:04:00
I think it was okay so there's some mitigation.

00:32:04:00 - 00:32:06:32
Yes, there's downside. You know, I'm risking 28% of that.

00:32:06:32 - 00:32:09:21
However, I'd rather not have 28%. I'd rather.

00:32:09:21 - 00:32:12:33
So you left on multiple, multiple funding rounds.

00:32:13:02 - 00:32:17:06
They took a 15 million convertible loan now a little while ago.

00:32:17:06 - 00:32:20:03
So that valuations done really, really well.

00:32:20:03 - 00:32:21:11
They were just about to close.

00:32:21:11 - 00:32:24:14
I think it was classed as a series B at just over

00:32:24:14 - 00:32:28:03
100 million valuation, so my 2 million valuations go into it.

00:32:28:03 - 00:32:32:02
So I'm kind of 50 times my money minus the dilution you get along the way.

00:32:32:06 - 00:32:34:16
It sounds good. What went wrong? Everything.

00:32:34:16 - 00:32:36:19
So they were just about to get the

00:32:36:19 - 00:32:39:33
they were just about to get I think it's 15 or 20 million investment.

00:32:40:02 - 00:32:42:24
The founder was saying keep an eye

00:32:42:24 - 00:32:46:17
out for your documents to be signed in the post and did little brilliant.

00:32:46:17 - 00:32:47:06
Okay.

00:32:47:06 - 00:32:49:15
And the next call was ah, the funding fell through.

00:32:49:15 - 00:32:51:16
We're going into administration as all now.

00:32:51:16 - 00:32:53:07
And it went from Yeah.

00:32:53:07 - 00:32:54:20
And there was talk of a second rate.

00:32:54:20 - 00:32:56:32
You know, you could have got out with 30 times your money or whatever.

00:32:56:32 - 00:32:59:11
Now that's okay. 50 grand. I'll take that. In terms of the money.

00:32:59:11 - 00:33:03:18
But the the incoming investor felt he didn't like that.

00:33:03:21 - 00:33:04:19
I have no knowledge.

00:33:04:19 - 00:33:06:01
It's all there's nothing been released.

00:33:06:01 - 00:33:10:28
It was CEO has been fired the was collapsed.

00:33:10:31 - 00:33:13:22
Yeah the company's going into liquidation now there is

00:33:13:22 - 00:33:16:08
there is a rescue deal people are talking to the administrator

00:33:16:08 - 00:33:18:07
but it's going to wipe out the existing cash flow.

00:33:18:07 - 00:33:20:13
So I get nothing. No, no, that's a wash out.

00:33:20:13 - 00:33:22:22
Yeah. So sorry to hear that, Mike. That is bruising.

00:33:22:22 - 00:33:25:03
So let's talk much more about venture right now.

00:33:25:03 - 00:33:25:23
No, quite.

00:33:25:23 - 00:33:28:13
I had an interesting one recently,

00:33:28:13 - 00:33:33:11
which was a portfolio company that eventually got vulture capital.

00:33:33:14 - 00:33:35:00
You know, they were in the ascendancy.

00:33:35:00 - 00:33:35:28
They were doing all right.

00:33:35:28 - 00:33:38:10
But there was an existential need for cash.

00:33:38:10 - 00:33:42:03
And someone saw an opportunity to come in for a sort of pension in the pound

00:33:42:03 - 00:33:45:22
and it was take that or go the way that your port goes, just gone.

00:33:45:22 - 00:33:47:31
So, yeah, it's an interesting time.

00:33:47:31 - 00:33:51:17
And certainly I think with the noose tightening in the capital, the liquidity

00:33:51:17 - 00:33:56:06
not flowing into venture into sort of the same,

00:33:56:09 - 00:33:59:06
you know, abundance that it was three years ago,

00:33:59:06 - 00:34:02:16
it's starting to play out in some unfortunate endings.

00:34:02:16 - 00:34:06:18
So so I guess my question is, if you had 10 million to allocate this year

00:34:06:18 - 00:34:11:27
and you had a choice as to how to allocate it between or across or including,

00:34:11:30 - 00:34:14:02
let's say it's put property in there as well,

00:34:14:02 - 00:34:18:00
because I know you've had some property portfolios, but you know, angel investing,

00:34:18:00 - 00:34:22:00
early stage and acquisition of buyouts

00:34:22:00 - 00:34:25:19
of AS and BS, where would you where would you put your money.

00:34:25:22 - 00:34:27:00
I would bet on myself.

00:34:27:00 - 00:34:32:19
I think I almost exclusively so you know, if I look at my

00:34:32:22 - 00:34:35:22
if I look at my time allocation rather than cash allocation,

00:34:35:22 - 00:34:38:10
I spend all of my time working on my two businesses

00:34:38:10 - 00:34:41:21
to the extent actually you're right, I am half a dozen properties,

00:34:41:25 - 00:34:45:00
a mixture of commercial buy to let in furnished wholly

00:34:45:03 - 00:34:49:20
and I just sold my last furnished holiday very, very recently.

00:34:49:27 - 00:34:52:03
The tax treatment on that stuff is all going well.

00:34:52:03 - 00:34:55:00
The second home piece is a big, big disincentive there, right?

00:34:55:00 - 00:34:55:31
Yeah. Yeah.

00:34:55:31 - 00:34:56:32
So yeah.

00:34:56:32 - 00:35:00:17
And, and basically that's freeing myself up I think.

00:35:00:19 - 00:35:00:27
Yeah,

00:35:00:27 - 00:35:03:27
that's much my time up So I can focus on my two ventures.

00:35:03:27 - 00:35:07:28
I'm a young family and anything I can do to avoid distractions.

00:35:07:28 - 00:35:12:07
So I will continue to do I will to frankly continue to angel invest

00:35:12:07 - 00:35:16:12
and use all of my tax relief is the also and I call I can't stop myself because

00:35:16:15 - 00:35:17:23
when I'm working, we've found a catalyst.

00:35:17:23 - 00:35:20:27
I see so many amazing founders and so many amazing businesses.

00:35:20:28 - 00:35:23:08
Yeah, it's really hard to.

00:35:23:08 - 00:35:26:29
Yeah, to say no, it must be very difficult.

00:35:26:32 - 00:35:31:22
And, you know, I've had to cut myself off

00:35:31:25 - 00:35:32:24
awaiting returns.

00:35:32:24 - 00:35:34:30
But yeah, okay. Very interesting.

00:35:34:30 - 00:35:38:11
And obviously it is a deal flow engine for you have found a catalyst,

00:35:38:12 - 00:35:40:02
but that's not the primary reason.

00:35:40:02 - 00:35:42:31
But I guess that's not going to be soaking up 10 million any time soon.

00:35:42:31 - 00:35:46:32
That's no good. Good. So innocently, here it comes. It

00:35:47:00 - 00:35:48:28
got her for us.

00:35:48:28 - 00:35:51:10
Okay, so let's get on to sort of the current market.

00:35:51:10 - 00:35:55:17
And you, given your vantage point across these sort of multiple sectors,

00:35:55:20 - 00:35:58:07
what emerging kind of

00:35:58:07 - 00:36:01:00
trends or market shifts are you seeing?

00:36:01:00 - 00:36:03:20
Most entrepreneurs maybe aren't paying enough attention

00:36:03:20 - 00:36:06:20
to that, that perhaps they need to be keeping in mind?

00:36:06:23 - 00:36:10:11
I mean, the obvious couple of shifts over the last year are, you know,

00:36:10:11 - 00:36:14:23
an absolute dominance in I and it feels silly talking to you about it

00:36:14:23 - 00:36:16:10
because you know this as well as I do right.

00:36:16:10 - 00:36:19:33
But there are so many founders out there who they've got a business that,

00:36:19:33 - 00:36:21:18
like our business has nothing to do with.

00:36:21:18 - 00:36:23:08
They own they're plowing on ahead.

00:36:23:08 - 00:36:25:16
Every single business will be transformed.

00:36:25:16 - 00:36:27:20
One way or another by whether it's integration

00:36:27:20 - 00:36:30:23
with systems or customer outreach or automating process.

00:36:30:30 - 00:36:33:15
Whatever it is, every single bit is going to proliferate.

00:36:33:15 - 00:36:36:18
Yeah, And and if you're not taking advantage of it,

00:36:36:18 - 00:36:39:30
your cost base is going to be much higher than than those other businesses.

00:36:40:00 - 00:36:43:00
How many people, though, do you find are experimenting with AI

00:36:43:00 - 00:36:46:01
in, say, customer services or something?

00:36:46:01 - 00:36:48:23
Customer facing Yeah, they are finding themselves

00:36:48:23 - 00:36:52:18
being talked out of doing so because it's just not the way that it's being done.

00:36:52:18 - 00:36:55:18
Like who's going to be bold enough to go in like, you know,

00:36:55:18 - 00:36:59:00
make all of their CS, all their sales team

00:36:59:02 - 00:37:02:13
avatars powered by, Hey John for example, like,

00:37:02:16 - 00:37:06:27
you know, but is that really something we expect to be able to see happen?

00:37:06:27 - 00:37:10:07
Am I going to look back in 12 months time at this podcast and go, what a fall?

00:37:10:07 - 00:37:12:06
Of course,

00:37:12:09 - 00:37:15:09
like, I think it depends very much on the business

00:37:15:09 - 00:37:18:16
and the customer types and the importance of relationships.

00:37:18:18 - 00:37:19:20
You know, if you are a customer

00:37:19:20 - 00:37:22:20
spending 10 million quid, you're not going to go anywhere near them.

00:37:22:22 - 00:37:26:01
If you've got lots of low value, you know, lots of customers,

00:37:26:01 - 00:37:30:08
but low value transactions, you will, you know, you'll be much more likely to

00:37:30:11 - 00:37:31:33
manage those relationships.

00:37:31:33 - 00:37:34:06
And it's not necessarily about the interactions, it's

00:37:34:06 - 00:37:36:00
everything else that's going on in the background.

00:37:36:00 - 00:37:39:33
So I think automating, you know, if you've got a customer success team,

00:37:40:02 - 00:37:43:14
don't necessarily automate that from everything after.

00:37:43:14 - 00:37:44:21
Yeah, yeah, yeah, exactly.

00:37:44:21 - 00:37:48:22
And also you can use AI to, you know, to spot themes and write

00:37:48:23 - 00:37:52:06
knowledge bank articles that are, you know, common problems.

00:37:52:06 - 00:37:53:09
And then you have a real human

00:37:53:09 - 00:37:56:26
to make sure they don't just look like they're been spat out of an alarm.

00:37:56:26 - 00:37:58:14
But I think that's one of the fundamental shifts.

00:37:58:14 - 00:38:01:16
And I you know like I that you and I know that fundamentally.

00:38:01:16 - 00:38:04:23
But so many founders aren't embracing it.

00:38:04:26 - 00:38:06:24
I think the, you know, a fundamental shift

00:38:06:24 - 00:38:10:01
in the venture space and probably every other aspect of the economy is,

00:38:10:04 - 00:38:13:15
you know, three years ago, years ago, it was growth at all costs.

00:38:13:23 - 00:38:17:19
And I was profit growth is a complete track, the macro, hasn't it?

00:38:17:20 - 00:38:20:21
I mean, we've gone from growth stocks and the, you know, the Magnificent

00:38:20:21 - 00:38:24:33
Seven on the S&P 500, several of which were unprofitable through to right now

00:38:24:33 - 00:38:28:25
I won't, you know, cash deliverable, cash generating real assets.

00:38:28:25 - 00:38:32:30
You know I want value stocks and that's, you know,

00:38:32:33 - 00:38:34:29
playing out in the private markets as well, frankly.

00:38:34:29 - 00:38:39:09
And it makes the founders job to, you know, to get to profitability sooner,

00:38:39:09 - 00:38:42:15
which should be shouldn't come as a shock because that's how businesses

00:38:42:15 - 00:38:44:08
were always running until the venture seemed right.

00:38:44:08 - 00:38:48:00
But, you know, get to optionality on whether you need to borrow or sell equity

00:38:48:00 - 00:38:51:18
or whatever, but we run a fundamentally strong business that generates cash.

00:38:51:18 - 00:38:55:09
And that's why I was forgotten about for nowhere near a decade.

00:38:55:09 - 00:38:58:10
I was going to say a decade, but probably three or four years in the height

00:38:58:10 - 00:39:01:19
of the venture boom, everybody forgotten it was just customer acquisition.

00:39:01:19 - 00:39:02:22
Yeah, that was really toppy.

00:39:02:22 - 00:39:05:22
And you look back now and what hubris the market had

00:39:05:22 - 00:39:07:07
and who do that really serve, you know, the up

00:39:07:07 - 00:39:09:31
and to the right confidence trick that we didn't really serve.

00:39:09:31 - 00:39:12:20
The third point I'd make and I'll let you jump onto the next topic.

00:39:12:20 - 00:39:17:04
The third point I'd make is what we're spotting a lot with our brands are the

00:39:17:06 - 00:39:20:22
the companies that are doing well are either ends of the market, i.e.

00:39:20:23 - 00:39:25:22
they are at the you have no choice or the luxury end of the market.

00:39:25:25 - 00:39:29:18
The discretionary spend in the middle is the part we're seeing getting, you know,

00:39:29:20 - 00:39:32:20
massive pressure because people can decide whether it's true or not.

00:39:32:26 - 00:39:36:08
I keep hearing about the barbell economy and the squeezed middle.

00:39:36:08 - 00:39:37:13
He's made exactly that.

00:39:37:13 - 00:39:41:20
I mean, I'm very fortunate in family cartilage that, you know, if you're

00:39:41:23 - 00:39:43:25
if you're a founder doing a funding round, you've got no choice.

00:39:43:25 - 00:39:46:06
You need us, our competition or a lawyer.

00:39:46:06 - 00:39:48:19
And that's literally it.

00:39:48:21 - 00:39:50:28
Okay. So

00:39:50:28 - 00:39:54:09
something we often lament in in this market

00:39:54:09 - 00:39:59:06
is the cost and complexity of raising commercial finance.

00:39:59:06 - 00:40:01:20
Right? But here we are, the interest rate.

00:40:01:20 - 00:40:06:05
So gradually coming down, lenders are starting to become a little more liberal.

00:40:06:05 - 00:40:11:30
It's still more difficult to raise finance here than it is in some other the but

00:40:11:33 - 00:40:16:17
for for a UK sort of SMB start up or scale up

00:40:16:20 - 00:40:19:13
debt is sometimes a necessary evil.

00:40:19:13 - 00:40:22:16
But I'm interested, given your experience, what your advice tends

00:40:22:16 - 00:40:25:16
to be about the risk versus reward of debt funding?

00:40:25:18 - 00:40:29:20
I think for lots of start ups, debt just isn't an option through,

00:40:29:23 - 00:40:32:10
you know, I think for later stage businesses, you've got invoice

00:40:32:10 - 00:40:34:12
factoring, you've got asset backed financing.

00:40:34:12 - 00:40:39:04
There are lots of ways you can squeeze, you know, you can squeeze the debt sponge

00:40:39:04 - 00:40:43:14
and get some money out for early stage start ups. They've got no assets,

00:40:43:17 - 00:40:45:19
they're not cutting invoices, so it just doesn't work.

00:40:45:19 - 00:40:48:31
And if I again, I'll give you a really horrible example

00:40:48:31 - 00:40:53:30
from my experience on why I am anti debt personally

00:40:53:33 - 00:40:54:26
rock technologies.

00:40:54:26 - 00:40:58:00
We we got to I think we were at 20 million of revenue

00:40:58:03 - 00:41:02:07
and the supermarket customer again the second example I'm using them

00:41:02:07 - 00:41:05:07
and they said yeah, we're not gonna to pay you

00:41:05:08 - 00:41:08:20
in December, we'll pay you in February because we've got a year round coming up

00:41:08:20 - 00:41:10:05
and we've got to keep cash in the bank, of course,

00:41:10:05 - 00:41:12:00
as a lovely breach of contract period.

00:41:12:00 - 00:41:13:23
And we had another customer, we did the same.

00:41:13:23 - 00:41:18:12
Now thankfully they both warned us, but we faced a because we were in

00:41:18:14 - 00:41:22:26
such an intense growth period, you know, you your it was just like

00:41:22:26 - 00:41:26:33
we were always strapped for cash because the growth was just ridiculous.

00:41:27:02 - 00:41:29:16
And we were we were a bit heavy business.

00:41:29:16 - 00:41:32:13
We were, you know, 12, 13%, which is pretty good for an I.T.

00:41:32:13 - 00:41:33:03
company.

00:41:33:03 - 00:41:36:02
However, we had a 50 grand shortfall in December.

00:41:36:02 - 00:41:37:22
So we approached our bank

00:41:37:22 - 00:41:40:30
and said, Right, we need 50 grand for a month just to get over this hump.

00:41:40:30 - 00:41:43:30
And then, yeah, and they were rubbing their hands.

00:41:44:02 - 00:41:44:24
They would do it.

00:41:44:24 - 00:41:47:32
But they're like, we want personal guarantees, a solution in public.

00:41:48:03 - 00:41:49:09
And it's short term, it's bridging.

00:41:49:09 - 00:41:51:32
So they're going to be, you know, charging a premium. Yeah.

00:41:51:32 - 00:41:53:32
And I didn't mind the premium, but I can, you know,

00:41:53:32 - 00:41:57:02
hold my nose on the pages or the first one got distasteful on that.

00:41:57:02 - 00:41:59:33
Yeah. I'm like, I'm risking my home, I'm risking bankruptcy.

00:41:59:33 - 00:42:00:22
We 50 grand.

00:42:00:22 - 00:42:03:13
In fact, we all got I got 50 grand out. Okay.

00:42:03:13 - 00:42:04:28
When they all wouldn't bother.

00:42:04:28 - 00:42:07:32
And yeah, I mean, if I were a startup founder, you know

00:42:07:32 - 00:42:11:11
the failure statistics on startups all so ridiculous.

00:42:11:12 - 00:42:14:09
Well, it's seven out of ten within the first five years or something.

00:42:14:09 - 00:42:15:08
And more than that.

00:42:15:08 - 00:42:16:20
Yeah. And therefore,

00:42:16:20 - 00:42:20:11
if you were a startup founder, would you risk putting money into.

00:42:20:14 - 00:42:20:33
Absolutely not.

00:42:20:33 - 00:42:24:13
You're going to do equity finance and give angel investors the risk.

00:42:24:15 - 00:42:25:01
you say that.

00:42:25:01 - 00:42:28:31
I mean, the British British Bank have their start up loan scheme

00:42:28:33 - 00:42:31:16
where for you you can borrow.

00:42:31:16 - 00:42:35:16
Yes, it's personally secured your personal guarantee but it's

00:42:35:19 - 00:42:39:07
you can borrow 25 K per director in your company Right.

00:42:39:12 - 00:42:40:01
Yeah.

00:42:40:01 - 00:42:43:02
So and it's not dilutive and it's 6% per annum.

00:42:43:04 - 00:42:43:30
Yeah.

00:42:43:30 - 00:42:47:05
So you know, I know a number of founders

00:42:47:07 - 00:42:49:21
gone that route but they've, they've really had to back themselves.

00:42:49:21 - 00:42:51:05
They have only done it once they got their companies

00:42:51:05 - 00:42:54:05
to a point where they can trust, they can repay the debt isn't it.

00:42:54:09 - 00:42:54:24
Yeah.

00:42:54:24 - 00:42:57:32
But I mean if the facilities there it's just you know once you take the

00:42:57:32 - 00:43:00:32
king's shilling I just, I just can't bring my.

00:43:01:00 - 00:43:02:08
Please just don't make sense.

00:43:02:08 - 00:43:03:25
I, me they don't although there are interim

00:43:03:25 - 00:43:07:18
indemnities you can you can lay off 80% of it assuming you're not negligent

00:43:07:18 - 00:43:07:31
of course.

00:43:07:31 - 00:43:08:30
But you know, for

00:43:08:30 - 00:43:12:17
something like four or 5% of the quantum you can be laying off 80% of the PPG.

00:43:12:17 - 00:43:16:08
So, you know, oftentimes these PG backed

00:43:16:11 - 00:43:19:20
facilities are being sold alongside the indemnity

00:43:19:20 - 00:43:23:21
kind of policy, which, you know, that's just perpetuating the practice.

00:43:23:21 - 00:43:23:32
Right.

00:43:23:32 - 00:43:26:32
And of course the FCA have completely opted out and said, no, well we might

00:43:27:00 - 00:43:30:25
this might stray into personal lending, but you know, it's not really our bank.

00:43:30:32 - 00:43:32:12
This is commercial, it's a commercial arrangement.

00:43:32:12 - 00:43:34:32
Technically, it's a loan to a company, isn't it? And it's unregulated.

00:43:34:32 - 00:43:35:24
Yeah. Yeah.

00:43:35:24 - 00:43:37:11
So yes, it is.

00:43:37:11 - 00:43:40:11
And until, you know, action is taken legislatively

00:43:40:11 - 00:43:42:00
that it's just going to continue, isn't it. So Yeah.

00:43:42:00 - 00:43:42:12
But yeah.

00:43:42:12 - 00:43:45:07
So that best to be avoided if you can't afford to repay.

00:43:45:07 - 00:43:47:07
I think that's a very strong

00:43:47:09 - 00:43:49:18
and one we should all stand by.

00:43:49:18 - 00:43:51:26
So just looking back on your entrepreneurial career,

00:43:51:26 - 00:43:56:32
was there a particular decision or pivot or moment that stands out

00:43:56:32 - 00:44:01:07
as having a profound impact on your success trajectory?

00:44:01:07 - 00:44:05:12
Is there one thing that you think so glad I did this beyond the sky.

00:44:05:15 - 00:44:08:15
I can't keep banking that. Yeah, yeah.

00:44:08:19 - 00:44:11:11
I mean, the most obvious thing know I had no choice over this. Yeah.

00:44:11:11 - 00:44:15:21
If if two E2 hadn't collapsed, I would still be working for two too.

00:44:15:22 - 00:44:18:06
I had golden handcuffs, apparently.

00:44:18:06 - 00:44:19:16
But if you do the math, actually,

00:44:19:16 - 00:44:21:23
given the dilution in the cap table and the,

00:44:21:23 - 00:44:24:05
you know, might there be 50,000 patents?

00:44:24:05 - 00:44:25:17
But I think this is options.

00:44:25:17 - 00:44:29:05
Yeah, options, options within two weeks, which obviously went to dust

00:44:29:05 - 00:44:33:03
when the business disappeared. But but it's amazing that

00:44:33:06 - 00:44:34:24
the lesson in life, the

00:44:34:24 - 00:44:37:33
emotional attachment that even a relatively small percentage

00:44:37:33 - 00:44:41:15
of ownership in a business creates between employees and

00:44:41:18 - 00:44:43:30
yeah, employees in the business. So

00:44:43:30 - 00:44:48:19
and the reality is I have probably never you know, I was relatively well-paid.

00:44:48:19 - 00:44:50:06
I was given lots of opportunities in that business.

00:44:50:06 - 00:44:54:00
I don't regret a second being there, but I also don't regret collapsing

00:44:54:00 - 00:44:55:00
because that gave me the kick up.

00:44:55:00 - 00:44:58:33
We also need in order to roll up my sleeves and,

00:44:59:01 - 00:45:00:30
you know, and I think the timing was perfect.

00:45:00:30 - 00:45:01:15
If I had tried

00:45:01:15 - 00:45:04:17
to be an entrepreneur in my twenties, that would have ended very, very badly.

00:45:04:17 - 00:45:07:15
So I think maybe some life under your belt, fairly some experience.

00:45:07:15 - 00:45:08:23
I delivered some big projects.

00:45:08:23 - 00:45:12:04
I'd run big teams, I'd learn lots of lessons along the way.

00:45:12:04 - 00:45:13:24
So the timing was good,

00:45:13:24 - 00:45:15:28
so that life needed to give you some lessons in order for you to go

00:45:15:28 - 00:45:18:24
make some lemonade. Yeah, I love that.

00:45:18:26 - 00:45:21:12
So looking forward, what

00:45:21:12 - 00:45:23:24
the sort of personal and professional milestones

00:45:23:24 - 00:45:26:07
that you're focusing on, maybe over the next 3 to 5 years.

00:45:26:07 - 00:45:27:26
Congratulations, You've just got engaged.

00:45:27:26 - 00:45:32:10
So I think that I think as you went away,

00:45:32:13 - 00:45:36:23
I did get a text about it earlier. Yes.

00:45:36:25 - 00:45:40:16
yeah, I mean, my my personal aspiration is to

00:45:40:19 - 00:45:43:00
I think I'm like you in this respect, and I think I'm going to do this

00:45:43:00 - 00:45:46:01
really badly, but I am going to stop hoovering up opportunities

00:45:46:01 - 00:45:47:19
and things to do with my time.

00:45:47:19 - 00:45:51:15
I'm going to focus on on the two businesses that I love dearly.

00:45:51:15 - 00:45:55:25
So I'm going to focus on those and focus more of my time on my family.

00:45:55:25 - 00:45:59:07
So I'm trying not to get distracted by anything else at all.

00:45:59:09 - 00:45:59:28
And that's hard.

00:45:59:28 - 00:46:03:01
It you know, I've got a mine, I've got lots of ideas,

00:46:03:04 - 00:46:05:08
I've got lots of ideas that I think I could run with

00:46:05:08 - 00:46:08:26
and lots of people bring me lots of ideas as well by virtue of what I do.

00:46:08:26 - 00:46:12:03
But I'm being very, very focused on not hoovering up anything else.

00:46:12:06 - 00:46:16:06
I want to really continue and I hope this happens to thoroughly

00:46:16:06 - 00:46:19:06
enjoy every step of my journey in both of my endeavors.

00:46:19:06 - 00:46:21:32
And I enjoy them in different ways.

00:46:22:01 - 00:46:23:24
You know, in some ways, Forge Technologies

00:46:23:24 - 00:46:27:22
feels like a well-trodden path, but, you know, I'm really enjoying that.

00:46:27:23 - 00:46:32:20
I'm working with a new management team, which is which is amazing,

00:46:32:23 - 00:46:33:20
you know, in a family context.

00:46:33:20 - 00:46:36:19
I'm enjoying we've just released EMI, an unapproved Option Schemes,

00:46:36:19 - 00:46:40:18
and I've got a bunch of other products that we are building over time.

00:46:40:18 - 00:46:42:31
So I'm really loving that journey.

00:46:42:31 - 00:46:45:21
So I just want to I just want to enjoy what I'm doing.

00:46:45:21 - 00:46:49:02
Yeah, carry on, double down and broaden the offer.

00:46:49:02 - 00:46:52:06
It found a catalyst and keep on ringing the cash register.

00:46:52:11 - 00:46:55:02
Yeah, that's okay. One hopes Good man.

00:46:55:02 - 00:46:58:16
Well, listen, it's been an absolutely inspiring chat, and thank you

00:46:58:16 - 00:47:01:31
so much for sharing your your journey, your experience, your insights with us.

00:47:01:31 - 00:47:05:24
Your brain works so fast and it's always an absolute pleasure

00:47:05:24 - 00:47:07:19
hearing from you and your perspective.

00:47:07:19 - 00:47:08:29
So thanks for joining us today.

00:47:08:29 - 00:47:12:21
I hope the listeners and viewers have appreciated it as much as I have.

00:47:12:23 - 00:47:16:08
How do people get in contact with you if they want to know the trick

00:47:16:11 - 00:47:19:09
or they are out starting a brand new venture that qualifies

00:47:19:09 - 00:47:24:20
as an innovation and they want to make use of your your sales services?

00:47:24:22 - 00:47:27:07
Well, maybe in the show notes we can put the we've actually got

00:47:27:07 - 00:47:31:17
a landing page for founder s The Eyes which talks through some of the nuances of

00:47:31:20 - 00:47:35:15
the only social media I'm on is LinkedIn, the only one that matters.

00:47:35:18 - 00:47:39:17
I think snappily sums it up some one which is useful.

00:47:39:19 - 00:47:42:30
I but Sam Simpson on yeah on LinkedIn

00:47:42:30 - 00:47:46:21
always love and I am from yeah be great to hear from some of your listeners.

00:47:46:24 - 00:47:51:15
careful what you wish for that goes for your inbox full of Iams and PMS

00:47:51:15 - 00:47:54:16
and to accompany all of the pitch decks that you have on a daily basis.

00:47:54:16 - 00:47:56:29
Of course, I'm sure that will all be generated as well.

00:47:56:29 - 00:47:59:00
Which is. Yes, well, which is a conversation for another day.

00:47:59:00 - 00:48:00:25
How do we focus on the signal?

00:48:00:25 - 00:48:01:25
Through the noise?

00:48:01:25 - 00:48:02:10
Yeah.

00:48:02:10 - 00:48:02:22
Great.

00:48:02:22 - 00:48:05:10
Well, thank you again so much for joining us today.

00:48:05:10 - 00:48:09:20
Listeners, viewers, tune in next time for another interview

00:48:09:22 - 00:48:11:14
with a successful entrepreneur.

00:48:11:14 - 00:48:13:28
And until then, keep on clutching.

00:48:13:28 - 00:48:14:14
Bye for now.