Doug Richard predicts “alt finance” revolution

DOUG RICHARD, the serial entrepreneur and angel investor, is predicting a major shake-up in the way that young businesses access finance to realise their growth ambitions.

Doug Richard

The founder of School for Startups will publish a report next month on “alt finance” which covers peer-to-peer loans, equity crowdfunding and web-based invoice discounting.

“These things are having a really big effect in creating new money for early stage activity,” said Mr Richard.

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“I believe that these things are tremendously important but currently not yet appreciated or understood.”

Mr Richard said the report will cover “the impact alt finance is going to have on the entire world of banking and venture capital”.

The former BBC Dragons’ Den judge has produced influential reports on business support and apprenticeships for the Conservative Party in opposition and the Government.

He said the state’s efforts to improve the landscape for business support had not entirely met his expectations, criticising the “relish” with which the Government went about cutting costs, but gave his backing to the Seed Enterprise Investment Scheme, which was introduced to help small, early-stage companies raise equity finance by offering a range of tax reliefs to individual investors, the “substantive and very proactive” support for alternative finance, and the Startup Loans scheme, which he said had helped tens of thousands of businesses.

“But at the same there are some big gaps,” said Mr Richard. “The biggest gap is a formalised national provision of straight-up training.”

He launched the School for Startups in 2008 and followed it up with the School for Creative Startups three years ago.

The School for Creative Startups was established in London and then Kent and is launching in Sheffield this autumn in partnership with Sheffield College.

The scheme offers a nine-month part-time programme for aspiring entrepreneurs or people with young businesses to learn the skills needed to succeed, said Mr Richard.

He added: “A simple majority of young businesses fail each year. What we have been able to show over the last three years is a considerable majority of our businesses survive and then prosper.”

The course involves 120 hours of teaching, critiques, support, mentoring, access to investors and a festival showcase for investors, buyers, media and the public.

Mr Richard said around 400 creative businesses have been through the programme to date, of which 80 per cent are still operating.

Asked why he chose Sheffield, he said: “What we really want to be able to do is set up an equally strong programme in the North so we can have a southern campus and a northern campus.

“We looked at various cities in the North. We looked at transport connections; if you start drawing circles around cities in the North, some of them permit people to get to them better than others. That’s part of it.

“Part of it is connections between London and Sheffield. In some ways, Sheffield is the southern frontier of the northern empire.

“But there are other things about Sheffield that are appealing. One, it has a small but emerging creative sector across the areas that are interesting.

“Two, as a city, Sheffield is very pro-entrepreneurial business. It really does stand out from other cities, not the least of which the Made Festival.

“Sheffield itself has been very supportive. The catalysing reason is the specific support of Sheffield College.”

Serial entrepreneur who loves teaching

Doug Richard is a serial entrepreneur, but says he loves teaching too.

He started School for Startups after becoming discontented with the available support for young businesses.

“The entrepreneur in me thought I could do a better job,” said Mr Richard, who is now 56.

Asked why he was running School for Startups rather than making billions of dollars in the tech industry where he made his name, Mr Richard told The Yorkshire Post: “I have started seven businesses in my life, six of which succeeded either modestly or well and one of which failed tremendously.

“I don’t want to do the same old thing again.”

He appears at the Made Festival in Sheffield next week.