721 : show : blogs : Start-ups : cmypitch.com

Blog Entry | Mon 2 Nov 2009

Name: Brad Rosser

Firm: Personally through my trust and also through six to 10 key investors we work with, These are made up of individuals and wealthy families.

Companies run: Virgin Group, Instant Access Properties, Luxury International Resort Development and Management, Fuel, Cashback Kings, Rpoints

Investments to date: Six in the last 12 months.

Sweet spot: Consumer-facing. Early stage stuff.

When did you become an investor?

I’ve been investing since 2000 in various projects.

Tell us about your last one OR most exciting deal to date.

The latest investment was Mobius Group, which is in the cashback arena. The investment was £1.3m. It’s a great consumer facing start-up with two new clear revenue facing opportunities with a good team on board. We only invest in things where I have an ongoing chairman type role. From there we throw our team at it to get through survival, then scale and ultimately sell at a premium. A process that can take from three to five years.

What makes a great pitch?

A blunt and honest one. I don’t expect all the boxes to be ticked. If they are I’d be more cynical. Analytically first I would look to see if the idea was commercially bulletproof or could be made so. I often find the biggest weakness is a lack of attention paid to sales plans and achieving sales. I want to know about marketing plans and the sales they’ve achieved and the feedback from the most important person – the customer. At the last cmypitch Live I liked all the projects in a way, but wasn’t convinced by the ones where they talked about a fantastic black box and thought it would be easy to go to market and achieve sales by the wave of a magic wand.

What makes a nightmare pitch?

Teams which are arrogant, demanding money on unreasonable terms, no sales and marketing, no front-end, no collaborative approach – everything that the great pitch is not. It’s a nightmare when you can see there’s potential but they’re holding on too tight and believe they have every answer. There’s no such thing as a perfect plan or a perfect team.

% you expect to succeed?

Six out of 10. The expectation is 10 out of 10, but it’s not the reality. In the last six years not every project has profited but we have been able to do enough to get investor(s) money returned. Others have made great returns. That’s not to say we haven’t had to work our socks off or restructure with some to get the return, but by hook or by crook as you say in the UK we’ve got the investment money back. There’s an old adage that four will pay for the other six; ours has been more six pay for the other four, plus profit. We believe we have an expertise in picking projects and go to extraordinary lengths to find them and have the ability to get them through the critical phases prior to sale.

Best tip for due diligence?

There are two equally important things if you don’t mind me naming more than one. The first is, is the idea commercial? Can you see it working? Does it have an idea of how it will go to market and achieve recurring sales? The second is a good collaborative team who are open to good ideas. There’s a difference between ego and confidence.

Describe your perfect investment

A number of elements. A consumer facing commercial project with the ability, over time to build a brand, although we do work with B2B projects. Ultimately even with B2B projects someone’s dealing with a consumer. Beyond that, a great collaborative team. And it needs to have a clear idea of what it takes to make it work from the bottom up (we often work with the project on this) and has the first six months pretty well mapped out, even if it’s not perfect. I’m interested in a ‘can do’ attitude and for them to be deal, sales and negotiation oriented.

Views on how we can increase the number of early stage deals in the UK.

There’s a lot being done already. You need three things to succeed. Skills, partners and a good team. If a business has these elements then they will succeed. We do need to work on the skill base. Businesses with these elements and a strong concept will get funded.

Biggest misconception about investors?

That they’re not human and are in some way big and scary. They’re doing the business a favour and they’re getting a great opportunity in return. They want to get to know an entrepreneur, make investments and get a return. They must like you, trust you and have faith in you.

Name one thing the government should do for investment.

Tax incentives for investments are an advantage. It’s more a case of making it easier for investors to invest. The government could match fund, but I’m a big believer in letting enterprise work it out for itself. Goverment could, however, work with founders to help build some basic skills to ensure the team are front-end focused and commercial.

Brad Rosser can be found at www.bradrosser.com or his company website www.betterstrongerfastergroup.com