Podcast – funding a start up

In our latest Noodles and Doodles podcast, Mark Greaves talked to Matt O’Donovan of WiFi Spark.

Matt discussed how he started his business (sat on a boat in a marina in 2003 trying to access the internet) but also the benefits of gaining early investment from business angels. He said:

both Malcolm and Tim are very smart guys and they were great advisors. When you’re an entrepreneur it can be very lonely. When you gain two shareholders that you can go to and say, ‘What do you think I should do about this?’, it’s super useful to have somebody that you can turn to because otherwise running your own business is a very lonely place.

Mark talked about the use of non executives in his recent blog but, as Matt says:

When you’ve got a shareholder whose cash is on the line, they’re very, very focused and they will give you the right advice. Having those guys on board was massively helpful to me, not just from the money point of view, but for the other reason of demonstrating faith in the company.

The world has moved on since the early 2000s and the methodology for raising start up financing from angels and others has changed. However the underlying rationale remains solid – someone else to talk to and help you through what can be a lonely journey for an entrepreneur.

Matt did sell WiFi SPARK a few years ago and found the external shareholders useful for that:

And when you come to sell a business, if you’ve got two shareholders who’ve come in at different stages after the business was running, then your prospective buyer is going to look at that and think, “Well, they bought a bit of it and they’ve been around and they’re quite happy,” and the thing has grown like crazy since. So that does help as well.

Clearly, finding the right partner(s) is key and the first part of that is identifying and understanding what support you may need and how a business angel may be able to bring more than just funding. Talking to your trusted advisers is always a good place to start when thinking about taking on investment or seeking external support.