SUCCESSFUL entrepreneurs in Yorkshire are “almost negligent” if they fail to invest some of their wealth in start-up businesses, according to angel investor Doug Richard.
The campaigning American entrepreneur, who visited Leeds yesterday to speak to start-up owners, urged investors to take advantage of the Government’s new Seed Enterprise Investment Scheme.
He said SEIS, which came into effect in April, “drives right to the place” where young businesses have the most difficulty in accessing finance.
The lack of early stage funding is holding back the growth of small businesses, unlike in the US, which is culturally more supportive of start-ups, said Mr Richard.
Under the scheme, investors can put up to £100,000 a year across a number of companies and receive up to 50 per cent tax relief regardless of their marginal rate.
“We are not just doing a tax benefit,” said Mr Richard. “We are helping acculture this country to the notion of putting a bit of money into somebody’s early-stage business and they are doing it through a rather radical tax incentive.”
Mr Richard, who has appeared at all three MADE festivals in Sheffield, said Yorkshire has a “good crop” of successful entrepreneurs.
“If you have already put cash in the bank I think SEIS certainly presents an almost irresistible calling card for you to invest in other people’s businesses,” he said.
“The fact of the matter is if you started your own business, grown it and sold it, from my point of view you would be almost negligent if you didn’t do some of that anyway. If not you, who?
“People say when they’re entrepreneurs ‘I did it all myself’. That’s only partially true. We all benefit from the country we live in, the rule of law, a fantastic market environment, we all ride on top of society.
“It’s the least effortful way to give back because you’re not just helping someone else start a business, you might profit from it. It’s not like hard graft.”
Mr Richard wrote a report for the Conservative Party in 2008 on reforming state business support. It called for improved access to finance, including an extension of the Enterprise Investment Scheme.
Mr Richard said improving enterprise education will also help nurture small businesses.
“I don’t think there can ever be enough,” he said. “I believe we could continue to invest in entrepreneurship in our further education colleges, higher education institutions, fine arts colleges and adult programmes because the fact of the matter is a lot of people grow up right now and don’t realise that it’s your job to make your job.”
Mr Richard added: “You can’t teach everything, but you can teach so much. You can therefore change the risk. You can make it less risky. You can put people in the position where they take the step they are more likely to succeed.”
The 54-year-old businessman grew up in upstate New York, the son of a doctor and a judge; “Anything but entrepreneurs,” he told the Yorkshire Post.
After university and law school, Mr Richard blazed a trail through the technology sector and spent 20 years founding, running and selling businesses.
He featured in the first two series of Dragons’ Den, the BBC programme, and founded School for Startups four years ago.
The social enterprise runs multiple touring and residential programmes around the UK. It has branched out overseas and runs embedded programmes in Romania and Nigeria.
Mr Richard hosted a free School for Startups event at the West Yorkshire Playhouse yesterday before an audience of around 100 entrepreneurs and investors, focusing on new ways to raise money without banks, different types of money, investment opportunities and the Seed Enterprise Investment Scheme.
He said: “Our core intent is to help as many people as possible become empowered by starting their own businesses or becoming self employed. We view entrepreneurship as a tool to help people help themselves. You can be in charge of your own destiny if you start your own business and we will put you in a position to do so successfully.”