Cambridge Cluster

Image via WikipediaOut of Eden, Lyon Outdoor and the largest of them all Lakeland are all passive equity companies with the latter in the second generation family control.

The Internet has made it possible to build these companies far from big centres.  However if you start-up in a beautiful small village like Dent, there will come a time when you will have to move to Tebay to cope with the large artics which Lyon Outdoor has had to do.  Also all three companies are re-sellers of other peoples ideas and products.

I met Ian Hartley of Out of Eden high up on the Langdales where he was seeking inspiration for the next stageof the companies growth.  And where I sprained my ankle slipping on a wet stone.  Each company now has experienced management some of whom may go and join another company in the area or even start on their own.  With passive equity companies, how can the companies offer a stake in the growth of the business without opening up the share register?  It is easier with the Cambridge Cluster and active equity companies where everyone is a winner in the business plan!

Image via WikipediaAshes to ashes and dust to dust and so my Father was scattered in the river that runs out of Brotherswater, Lake District.  That was after we had left part of him on my Mother’s grave in Bowness Cemetery.

Sadly there are no pictures of Brotherswater on Flickr or no tags that Zemanta can find so here is a picture of Thirlmere.   It is a pity as it is a beautiful lake with a lovely pub and campsite, Brotherswater Inn and Sykeside Campsite.

Image via WikipediaLoch Fyne Oysters is being lauded for helping the employees buy the company in a soft management buyout of £4million. Now this is a great story of a business built by two people, one an eccentric but poor landowner and the other a deep sea diver, Johnny Noble and Andrew Lane.

But what can we learn about business ownership for the Loch Fyne story? Interestingly there were two businesses, the producer and the the restaurants. The business subject to the MBO is the producer side. The restaurant business (36 chain) was spun off from the original and sold to brewer Greene King for £68million.

The lesson for angels and investors is to be careful because if you were not part of the spin-out, then you would not have shared in the big win. However, it is good that those who did have the big win are helping the employees buy their own company.

Being part of an angel group where a scheme is being suggested that the return to the angels be capped and our holdings placed in a separate company, I am glad to see that the Loch Fyne shareholders are being so generous. There may be hope for my little angel group.

Image via WikipediaA previous post commented on the long wait for the angels in Cobra Beer and the employees who were told that if the company was sold there might not be a job for them – not bad for the person who gives great motivational talks. I am left to wonder why people who have raised funds from others to invest in their business have time to join the House of Lords, go on trade missions, appear on TV shows whilst back at the ranch, losses have been made for a second year running. This time up from £4.4million to £13.1million on sales of just £43.2million.

How do you lose £13.1million on sales of £43.2million – I guess by taking your eye off the ball and enjoying trips and jollies although I am sure that supping with the mighty will bring in sales next year.  Heard that before?  Expansion to the USA has been aborted and a cautious note for the future is sounded: “The group sells a premium product at a premium prices and its business is therefore especially liable to be affected” in an economic downturn.

As an angel I have suffered losses whilst founders massage their egos on the global stage. It is better to back a dull founder who has a simple mission to increase the value of the business for the founders, investors and employees. When that has been achieved, then the global stage is deserved.  But dull founders make poor speakers but they are so powerful in small groups.  I have always been puzzled how people have the nerve to talk about their success when up to the knees in other people’s money.

Image via WikipediaProfessor Arnoud de Meyer is Director of the Judge Business School in Cambridge, UK. He joined from Insead three years ago and has lifted the Judge into the top echelon of the business school world by concentrating on building strong links with his host university – Cambridge. Apparently most other business schools want to go it alone and distance themselves from their host. European business schools, Insead in Fontainbleau and ISE in Barcelona are removed from clusters and Harvard Business School tries to keep its independence.

When I showed him the illustrations for Equity Fingerprint, the business plan resource, he was impressed. Now we need to follow his 3R mantra with the NESTA project. “Is it revealing, is it rigorously done and is it relevant – that is, can we translate it into the classroom? The importance of practical research is linked to the second area which we are building on – executive education. Through our research we want to influence the world of business, and executive education is a way of diffusing our ideas to a much larger audience than one would reach simply through MBA programmes.”

Equity Fingerprint will be rigorously done by Lancaster University Management School as part of the NESTA funded project. We know it is revealing and then it will be relevant. It will go global – well, that is the dream.