Take a XVI century farmhouse with a spacious yard and dilapidated but distinguished outhouses, close to a major urban conurbation and the motorway system, an innovative planning committee, a friendly banker, and a dedicated couple investing their life’s savings – and you have the foundation of a thriving farm and craft centre with the most up-to-date service facilities for ever increasing numbers of year-round visitors.
Steady progress over some ten years has established the facility high on the list of coach operators from far afield, and of various agencies recommending where the ‘day-trip’ disabled are particularly welcome.
Then Brussels steps in, with its latest views on disabled access – nothing completely new is needed, but the rules require that over £1m be spent implementing minor modifications: shaving a few centimetres here, lifting a few millimetres there. All enforced by the well known British breed of inspector who insists on compliance with the letter of every law.
It is true there had been plenty of notice, but too much time had been spent on fruitless argument against the ruling. Suddenly, this substantial business faced imminent closure.
The high investment cost of creating the craft centre from a number of listed buildings meant there was little value left for bank security. Particularly as most of the proposed additional cost was to replace modern existing facilities, years away from needing up-grading for any reason other than bureaucracy.
Our answer was to obtain minority angel investment – this would enable the expansion of the present facility and the foundation of a second centre, located far enough away not to compete.
The end result was that although the creators yielded a third of their equity in the original premises, their remaining two thirds (including two thirds of the second centre) is now worth far more than their original 100%, and a third centre is on the drawing board.
Do not fear Business Angels for genuine venture capital – but be on your guard against ‘vulture capitalists’ who will require a majority stake, will interfere unnecessarily and, when they think they’ve learned enough, can lever you out of the way.
The genuine investor will seek a minority position – they’re investing in you and your team to do the job, day-on-day, and for your long term mutual benefit together in a valued and respectable partnership.