Straightforward

Reading

Part 1
Read the article below and complete each sentence with a name from the box. There are 2 extra names.
Trevor Bayliss Richard Farleigh Peter Jones Gordon Brown Doug Richard Charles Ejogo Alistair Turner
(1) _______ is one of the brains behind Igloo Thermo-Logistics.
(2) _______ had at least one of his ideas stolen.
(3) _______ is a former investor from Dragon’s Den.
(4) _______ was originally going to invest in Umbrollys.
(5) _______ thinks that business investments often sound better than they are.


Dragons trust they won’t get burnt.

“No lawyers?” I ask, slightly shocked. “No lawyers” came the response. “We did it ourselves, on mutual agreement.” And so the financing deal that created the first Dragon’s Den-backed multi-millionaires was put in place.

Your Business has covered how Anthony Coates-Smith and Alistair Turner secured the £160,000 they needed to expand their white van firm, Igloo Thermo-Logistics.
But we didn’t mention how the deal was struck. Given the modern business world’s obsession with Britain’s ever-more complex legal system and the rising costs of compliance, it’s refreshing to hear that such a high profile business relationship is based on mutual trust and policed by mutual self-interest.
Usually it’s the horror stories of inventors having their ideas nicked by unscrupulous investors that makes the news. Trevor Bayliss, the serial inventor (the clockwork radio and more), is just one well known example – he now crusades on the issue.
You would have thought that the Dragons – in this case Duncan Bannatyne and Richard Farleigh – would be super-wary of the businesses appearing on the show. They’ve got their profiles to consider as well as their cash. Given how some of the deals struck in the Den have gone wrong, it could be the legal equivalent of the little boy and the sweet shop.
Do you remember Charles Ejogo and his idea for umbrella vending machines with plasma screen ads placed in underground stations? He was shown securing an investment of about £150,000 from Duncan Bannatyne and Peter Jones in return for 40 per cent of the equity. The deal fell through when the Dragons found out that Mr Ejogo didn’t have a contract to place vending machines with ads on them in underground stations.
Umbrollys, the business, is still trading and appears to be doing rather well. But I imagine neither Mr Ejogo nor the Dragons benefited from the distraction of negotiating a deal that was never going to happen.
The other surprising aspect to the Igloo deal is that it has taken the Dragons so long to back a business that has made big money.
Yes, going into business is risky – most fail within the first three years – but this is different. The entrepreneurs pitching the Dragons are not there by accident – they’ve been hand-picked. Yes, some for the entertainment value, but the Dragons will insist that at least a handful are viable business opportunities. Add into the mix their ability to make these opportunities happen using their contacts, and it should mean that each investment is a sure thing.
Not so, Mr Bannatyne tells me. “You can’t invest in a business, design your product, and get it out overnight. These things take time,” he says.
Richard Farleigh adds: “Business is tough. It explains why we also try to get such a chunk of the business for our investment. Although they always sound fantastic, there are always more difficulties than you expect.”
It just shows how difficult it still is for British entrepreneurs to raise the money they need to finance their ideas. It also highlights how Gordon Brown and his new Chancellor should tread carefully when reforming capital gains taper relief.
Yes, private equity bosses may be exploiting the relief, which reduces the rate to 10 per cent on business assets, including shares in private companies, after two years. But it is also encouraging thousands of mini-Dragons to take a punt and invest some of their spare cash into high risk start-ups. According to a former Dragon, Doug Richard, the relief is the main reason why the climate for raising start-up capital in Britain has recently improved.
(material from http://blogs.telegraph.co.uk)