Raising Entrepreneurs

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Lois Cook set up her website Angels’ Den in order to match angel investors with people with a worthy business idea. In her experience, early-stage businesses should seek ways to avoid external funding.

Cook’s solution: don’t go running straight to external investors; be ingenious and find ways to generate cash from the business’ inception.

“If you look at the young entrepreneur groups at schools today, they teach you that if you want to run a business, then you’re going to need to run a pre-business to raise the capital to start the main business.

My son recently had to sell bottles of water so that he could pay the deposit to partake in an entrepreneurial event at school. And I think that’s a really good lesson,” says Cook.

“But most entrepreneurs don’t think like that – they’ll just say ‘I need £50,000 to get my business up and running’. But then of course to procure an investment of £50,000, you’re going to need a shareholder agreement which means you’re going to have to employ a lawyer which is going to cost you thousands of pounds, and then you’ll probably need to hire an accountant. But they’ll just say ‘I don’t have that money’. They haven’t really grasped that maybe you need to do something else first to earn that money.”

Early business experience during school years teaches the practical skills and thought processes required to bootstrap a business, rather than going cap in hand to investors – today’s schoolgirl entrepreneur is tomorrow’s Richard Branson in the making.

Source: Real Business UK