You need enthusiasm, bundles of it, to set up a business, says Neeta Patel, the CEO of the New Entrepreneurs Foundation (NEF). She has this advice to any budding entrepreneur, the same advice she gives to members of the foundation, and that’s: “Don’t do it unless you are passionate about it”. But then she also has a warning.
Neeta was an early internet pioneer, launching a personal finance web site in 1997, she is the co-author of ‘Creative Business – the making of addictive content’, a regular contributor to the Huffington Post, she is the ‘Entrepreneur-Mentor in Residence at London Business School’, a mentor to start-ups, an investor and of course the CEO of NEF. She is also a judge for the NatWest Great British Entrepreneur Awards.
But while she says entrepreneurs must be passionate, they also need “a dispassionate approach when valuing whether their idea is any good.”
Maybe that is why the ideal entrepreneur is a rare beast, they need what Neeta describes as “a healthy dose of passion and dispassion!” Not many people can combine both.
She talks about gamblers dilemma. When you put money into a venture ‘sure’ it’s going to work. Then you find it’s not working, “so put more money in” muttering to yourself “surely it’s going to work’”. “So, she says “it is knowing when to call it quits!”
And that takes us to resilience. Neeta says entrepreneurs “must have the ability to take the rough with the smooth, to be able to pick themselves up after failure and keep going.”
“Entrepreneurship is a rocky path,” she warns “without resilience you are not going to make it!”
Neeta also talks about a gap.
For start-ups looking for seed funding, there is SEIS and EIS – these schemes have been “amazing,” says Neeta, and much can be said for ‘the start-up loan scheme’, and ‘The British Business Bank.’ She says that over the last six years the government “has been instrumental in helping to create the entrepreneurial culture.”
But it is when you move to the next stage there is a snag. She says: “Good ventures with strong fundamentals in growth sectors will always raise money. In the UK, the Angel Investment market is active; it is not hard to raise the first seed round for start-ups as long as the idea is good.” “But,” she says, “What is harder in the UK is raising for subsequent rounds, there is “a dearth of investment between series A and series B.”
Yet, despite it all, few people who work in this space would deny that the UK is far more entrepreneurial than it used to be. Why is that?
It seems that what happened in 2008 had a lot to do with this.
Neeta says: “The financial crash of 2008 started it, jobs went, the city was laying off people, corporates were laying off people, very bright able people were having to leave their corporate jobs. A number of them used it as an opportunity to do something for themselves, they had money saved up, they had the ambition to do something. In a way, the financial crash started it.”
But another consequence of the 2008 crash was low-interest rates. Neeta says, “we have had unprecedented low -interest rates, what that has meant is that people’s savings returns have not been that great, so investors have been looking at diversifying and putting money in slightly higher risks, high return investments such a VC funds and VC funds, of course, invest in start-ups.”
And then linked to that we have seen the rise of the Angel Investor, “also related to low-interest rates, Angel Investors look around to see where they can diversify their savings.”
That takes us back to EIS and SEIS, making investing in unquoted companies and starts-up much more attractive.
Then there is the millennial generation, an age group Neeta works closely with. She says: “They are willing to take the risk and want to reap the rewards.”
And finally, there is the media, which has been highlighting entrepreneurs “by giving them airspace and generally promoting them.”
Neeta had more to say on education, on her entrepreneur heroes, and the importance of failure – but these are topics for another day.
The UK is emerging an entrepreneurial success story – but more needs to be done, and one way to achieve this is to shine the media spotlight on entrepreneurs, their challenges, their failures and of course their successes.
The NatWestGreat British Entrepreneur Awards are currently open for applications, and entrants can apply here.