Can you tell your PEs from your VCs? Part 1


Can you tell the difference between a Private Equity firm and a Venture Capital firm?

Before you start to think about trying to raise finance from Private Equity or Venture Capital providers you need to make sure that you are approaching the right type of investor.

Finding the right investor can be like looking for a needle in a haystack.  The British Venture Capital Association has over 200 investor member companies.  If you add non-members to this, which will include US and European investors there are over 1,000 investors (my database for the UK is currently at 1,093 possible sources of finance) who you have to screen in order to arrive at a short list of firms to approach.

So, how can you tell the difference between Private Equity and Venture Capital and then understand the different types of companies in each category?

Lets start by differentiating between Venture Capital and Private Equity.

Venture Capital

In theory, Venture Capital funds invest in companies at an earlier stage and with greater risk.  As a result they are seeking higher returns (as some of the companies WILL fail.)   The earliest stage they may come in is in a Seed Round, typically investing in the hundreds of thousands (pounds or dollars).

The next institutional investment rounds are lettered sequentially, Series A, Series B, Series C etc.  These rounds tend to increase in size and are normally done at increasing valuations (up rounds).     As the investee company matures, it may need some additional finance ahead of an IPO, a pre-IPO funding round would then follow.

Private Equity 

Private Equity Funds also have their market segments and specialisations.  My database of PE funds recognises the following categories.

  1. Acquisition Finance – providing capital to assist with M&A transactions
  2. Public to Private – delisting public companies from the Stock Exchange
  3. Buy and Build – initial acquisition of a “platform” to which additional companies are added in a sequence of strategic or consolidating acquisitions.
  4. Equity Release – providing capital to enable founders to put some money in the bank, to settle mortgages and school fees for instance
  5. ReCapitalisation – providing new capital for an existing deal. A company may be struggling and need additional capital to continue trading.  This requires a reorganisation of the shareholding structure, in which the original investors often lose out.
  6. Bank Refinancing – Often companies, with bank debt from an orginal deal, may struggle to meet their debt obligations and these funds put equity in to relieve the financial pressure.
  7. Spin Out – the opportunity to acquire a division of a larger company.
  8. Bridge Equity – where the investee company needs some short term finance to enable it to achieve a project/milestone or objective ahead of another round of financing.
  9. Secondary – the purchase of a company from another private equity or venture capital firm
  10. Active – inteventionist investors who come in to force boards to take a more proactive role in realising value from underperforming assets
  11. Rescue/Turnaround – investing (cheaply) in companies in financial distress and where often the only other alternative is a call to the Administrator
  12. Distressed Debt – the acquisition of debt in companies in difficulties, at a discount to face value
  13. Special Situations – a catch all term to cover situations which may be complex or where the underlying company is in difficulty.  The additional capital can unlock the problem, releasing value for shareholders
  14. LBO – Leveraged BuyOut – generally a term for larger deals where a large company is acquired using a complex blend of debt and equity
  15. MBO – Management Buy Out – acquisition of the company from original shareholders by the encumbent management
  16. MBI – Management Buy In – the same as an MBO except that the management in this case come from outside the company.  The hybrid of this is the amusingly names BIMBO – Buy In Management BuyOut
  17. Expansion/Development – Growth capital for the expansion of the business.
  18. Mezzanine – a hybrid between debt and equity.  Interest rates are often in the 12%-18% range, part paid and part rolled, often with equity warrants.  The interest cost is high but the equity dilution is low.
  19. Venture Debt – this is effectively bank lending but not from a bank, from a fund
  20. Junior Equity – a form of equity with a lower return and less rights than the normal equity. It ranks behind preference shares and ranks behind these shares on a return of equity.  When there are different ordinary share classes with different rights, those with the lesser rights will be “junior” to those “senior” classes with more rights.
  21. Listed – investments in listed companies shares as an equity investment leading to  a minority interests.  These investments have to conform to the rules of the Stock Exchange.
  22. Purchase of Quoted Shares – similar to the previous item, but more of an investment strategy than an investment in the company

Don’t forget just identifying the investor is just the start of the process, now you have to get their attention.  To do this you need to understand their investment criteria in depth and that is the subject of the next post in this series.

What Next?

Take a look at my FREE video Tutorial “How to Turn Your Great Idea into a Business” which is all about Starting a Business and Raising Capital.


Do you know your PEs from your VCs? An Introduction

In the next few days, I am publishing a four part blog series on Private Equity and Venture Capital and this post is by way of a brief trailer for that series.

Recent conversations with Entrepreneurs have highlighted to me that the arcane world of Private Equity and Venture Capital is not well understood.

There is consequently a steep learning curve for those seeking investment which can put them at a material disadvantage.  These posts will of course not level the playing field but hopefully will go some way to opening up an understanding of the topic.


I have made a short video to introduce the posts.

As can be seen from the Magic Hexagon above , I am covering six main topics in the four posts.

Monday 20th February 2012.

Part 1 covers the different Types of Venture Capital and Private Equity Firms.  The criteria here are not mutually exclusive.  I concentrate on the stage of development for VCs and the types of transaction for Private Equity.

Thursday 23rd February 2012

Part 2 of the series looks at the Key Investment Criteria that an entrepreneur will need to meet to be considered even in the intial stages by an investment firm

Monday 27th February 2012

In Part 3 I look at How to Approach an Investment Firm, discuss in more detail what they are looking for and suggest 6 Reasons Why Business Plans are Rejected.

Thursday 1st March 2012

In the final installment, Part 4, I discuss some of the Main Characteristics of the Financial Plan that will have to be prepared and conclude by trying to explain the main Six ways that the VCs and PEs make Money through their investments.

The blog posts are scheduled to be released at Noon UK Time.

I would be very interested to know what further questions and clarifications you would like me to address on this topic. Please email them to me at jbdcolley[at] or comment below.

I hope you enjoy the series as much as I enjoyed writing it for you!

What Next?

Take a look at my FREE video Tutorial “How to Turn Your Great Idea into a Business” which is all about Starting a Business and Raising Capital.


6MS The Scarcity of Capital for Small Business Part 2

Listen to my latest phonecast

What Next?

Take a look at my FREE video Tutorial “How to Turn Your Great Idea into a Business” which is all about Starting a Business and Raising Capital.


Capital Issues for Small Businesses – The Video!


I have been inspired by Andrew Warner and Mari Smith to post a video on YouTube.  In her interview with Andrew on, Mari speaks about Radical Strategic Visibility in her interview on Mixergy and I have tried to take a leaf out of her book.

Having written a series of blog posts on the subject of the Capital for Small Business, I have shot a short video about the series and posted it on YouTube to promote the blog posts.  This is also something of a marketing experiment to see what effect the video has on my site and visitor numbers.

The blog posts cover:

The Role of the UK Banks and UK Government in providing access to capital for Small Businesses

Alternative sources of Capital for Small Businesses, including Angel investors, High Network Individuals and Internet Platforms.  I also mention the Lean Start Up, a strategy for reducing the capital required by a Start Up

Credit Agencies and Credit Scores and the importance, as a Small Business, of knowing your Credit Score

36 Questions to Ask your Bank Manager – Go On, put him on the Spot!

I am also going to post the video through Twitter, on Ecademy, on Facebook and on Vimeo.  I will let you know what impact this posting strategy has.

What Next?

Take a look at my FREE video Tutorial “How to Turn Your Great Idea into a Business” which is all about Starting a Business and Raising Capital.



36 Questions to Ask your Small Company Bank Manager


I have focused this series on the important issue of the Scarcity of Capital for Small Companies, which I believe are the corner stone of the economy.

In this post I want you to challenge your Bank Manager next time you see him.  PUSH HIM on the sort of capital that might be available to your business.

You may not be seeking capital now but you have nothing to lose.  If you think that you might be seeking capital in the near future, do some reconnaissance and find out whether this bank is likely to help you.  If the result is not encouraging, go and meet with some other banks and see what they have to say!

This list is not exhaustive but I hope gives you some ideas for probing questions.  If you can add to the list, please do so and leave a comment. 🙂

Knowledge of business

  1. What do you know about my business?
  2. Have you visited my website recently?
  3. How many other companies do you cover? In my sector?
  4. What view does the bank have on my sector?
  5. Did you last extend a loan to a company like mine? What were the terms?
  6. Would it help if I provided you with a Detailed Business Plan and Financial Projections?

Bank Approach

  1. On what basis would you extend a loan to my business
  2. Would you access the Credit Agency Report on my company?
  3. How do you decide what to lend to whom?
  4. Who makes the lending decision?
  5. What is the limit of the loans you are personally authorised to make
  6. What is your detailed loan approval process? How long does it take?

Lending Options

  1. Do you do Debenture Lending (secured only on the assets of my business)? If not why not?
  2. Would my company qualify for the Government’s loan guarantee scheme?
  3. How do you structure the repayment profile?
  4. What sort of overdraft facility could you make available?
  5. Do you offer invoice discounting?
  6. Can you offer any lease financing?


  1. What interest rate would you charge
  2. How is this defined? Floating over base?
  3. What do you use for base rate?
  4. What fees do you charge?
  5. Are there any due dilgence costs involved?
  6. What other costs are involved that I need to know about it?


  1. What term do you lend over?
  2. Are your loans capital repayment or bullet (all capital paid at the end)?
  3. Can I fix the interest rate?
  4. How often do you require information from me to monitor the loan? What information?
  5. What sort of covenants would you stipulate?  What are they? Interest cover?
  6. Can I repay the loan early without penalty?


  1. Is a charge over my business assets sufficient security?
  2. Do you ask for a Directors personal guarantee?
  3. Do you ask for security over my house?
  4. Will you utilise any of the Government Small Company Loan Guarantee Schemes to offset some of your risk?
  5. I have been banking with you for X years? Why can’t you offer me a better loan structure with less guarantees from me?
  6. What can YOU do internally to reduce the number of strings attached to any financing?

What Next?

Take a look at my FREE video Tutorial “How to Turn Your Great Idea into a Business” which is all about Starting a Business and Raising Capital.


Credit Agencies – The most Important Customer you have NEVER Spoken to!

Every company has a Credit Score, in the UK and the US  there are a number of Credit Agencies who calculate this and make it available, for a fee, to your potential customers, suppliers and banks. This can have a major impact on your business without you knowing anything about it.

The purpose of this post is to highlight the risks of not knowing how your credit score is calculated and to show how you can work with Credit Agencies if you feel that they have miscalculated your score or misinterpreted the information they hold on your company.

The purpose of this article is not to criticise Credit Agencies but to highlight to Companies the importance of making sure that your Credit Score is being correctly calculated.

The author has no financial relationship with any Credit Agencies and the purpose of this article is to inform company owners of the importance of understanding what records are held by Credit Agencies on their business and to provide some information as to what they can do about it by working with the Agencies concerned to ensure that this information is both correct and complete.

Credit Scores

Credit Agencies score your business out of 100 and this is a calculation of risk associated with trading with your company. The component parts of the score evaluate strength, performance and ultimately the creditworthiness of each company.  The score is made up of over 50 factors including profitability, gearing and size along with other non financial items such as County Court Judgements, payment performance information, lateness of accounts, regional failure analysis and directors information.

What Does a typical Credit Score Mean?

The scores can be summarised as follows but do check with the Credit Agency you speak with to make sure you understand their scales.

  • 91-100 = Very Low Risk
  • 81-90 = Low Risk
  • 51-80 = Below Average Risk
  • 26-50 = Above Average Risk
  • 16-25 = High Risk
  • 2-15 = Maximum Risk
  • =1 Intention to dissolve/winding up petition
  • =0 Dissolved or serious adverse circumstances

Niches and Size

There are discrete score cards reflecting the age and relative size of a business.  Primary segmentation breaks down into:

  •  Companies yet to file accounts
  • Companies who have filed one set of accounts – with further niches
  • Companies who have filed two or more sets of accounts – with further niches

Significant Potentially Adverse Factors

While each niche has its own characteristics, there are some significant common factors which could adversely affect a company’s score.

These include:

  • County Court Judgements
  • Number of Previous Searches
  • Late filing of financial accounts
  • Late filing of annual returns
  • Trading Losses
  • Deficit in Net Assets
  • Low Equity Gearing
  • Directors previous business failures
  • Late settling of credit account invoices

Credit Agencies are explicit that they are open to discussion with companies of the outcomes of their credit scores and are prepared to review these where further information is made available to them.  This process may involve a further fee.

Six Easy Ways to Improve Your Score

  • File your Annual Return on Time
  • File your Annual Accounts on Time
  • Pay off County Court Judgements within 1 month

County Court Judgements are held on record for six years unless paid within one month.  If you do pay it but outside of this time frame, obtain a Certificate of Satisfaction and Credit Agencies will include this in your record so that anyone who obtains a copy of your report can see that you have paid your debt.

  • Pay your Creditors within their Terms, creating a positive payment trend
  • Limit the amount of Credit searches made on your business
  • Communicate with your Credit Agency

If your company has a low credit score, provide the Credit Agency with further trading information and they will normally provide a full Credit Review for an additional fee which includes some or all of:

  • Review of signed Management/Draft or later Statutory Accounts
  • Review of relevant business narratives
  • Review of Business Plans
  • Contacting three trade referees supplied by the subject company
  • Analyse previous search information and remove duplicate searches.

Some of the Pit Falls 

  • Days beyond Terms

Much of the information provided to Credit Agencies comes from larger companies.  Many smaller companies know well that when trading with larger companies, they are paid late.  Small companies will normally try to settle invoices with similarly small and local trading suppliers  in a timely manner but treat larger companies in the same way they are treated and pay later.  As small companies rarely provide this type of data to Credit Agencies, small companies run the risk of losing points.  There is no easy solution to this.

  • County Court Judgements

It is difficult enough when you have a dispute with a supplier and it ends up in Court.  If you lose, you may still have an option to negotiate the terms of a settlement which may be lower than the amount the judge awards against you.  In any event, you are unlikely to be minded to pay promptly.  From a credit score perspective, CCJs not paid within a month will remain on your record and affect your score for six years, although I understand that their impact reduces over time.

  • Financials

Smaller companies are exempt from audit and need only supply limited financial information to Companies House, primarily some balance sheet information.  This limits the amount of financial information Credit Agencies and other Credit Agencies can use for their financial evaluation.  Larger companies who are fully audited, submit more detailed information, including profit and loss account information and therefore are easier to score and are more likely to benefit from higher scores (all things being equal and they being profitable) than a smaller company.

  • Directors’ Histories

Credit Agencies is connects previous directorships held by the current directors to the score.  This is not unreasonable.  However, if you have voluntarily closed or dissolved companies in the past for reasons which may have been practical rather than financial, this can count against you.  If you have such a track record, it is worth explaining to Credit Agencies the full details of the past companies and why they were closed.

  • Lease Financing

If your company has leased a significant amount of assets make sure that Credit Agencies know that this is asset financing and not a current liability to be counted as debt.  This can significantly adversely affect your acid test score, a measure of your liquidity and lead to lower scores

  •  Fund Raising

If you are seeking to raise capital, debt or equity, this may result in an increase in applications to Credit Agencies for a credit report on you.  Without knowing that you have engaged in a process, Credit Agencies is likely to interpret this in a negative way with financial institutions and suppliers checking on your creditworthiness.  In addition, if you frequently lease equipment, it is likely that the company from whom you are arranging the lease will apply for a credit report on you.  It is important to ensure that Credit Agencies understands the normal course of your business and/or that you have started a fund raising process and can interpret these credit report requests corrrectly and fairly.

  • Provide Additional Information: More information is better than less

Credit Agencies employ analysts to keep their reports up to date.  The more helpful information that you can provide them with to ensure that they evaluate your company correctly the better.  A few basic balance sheet numbers, absent any commentary or information on the business, can give a quite misleading picture of the health and creditworthiness of your company.  Credit Agencies of course have to err on the side of caution but by working with them you can avoid many of the pitfalls I have highlighted above.

What Next?

Take a look at my FREE video Tutorial “How to Turn Your Great Idea into a Business” which is all about Starting a Business and Raising Capital.


6MS The Scarcity of Capital for Small Business Part 1

Listen to my latest phonecast

What Next?

Take a look at my FREE video Tutorial “How to Turn Your Great Idea into a Business” which is all about Starting a Business and Raising Capital.


Small Companies CAN raise Capital despite the Banks


In my previous post, I discussed how difficult it is for small companies to raise capital from traditional banking routes or using UK Government backed schemes.

I stressed that the UK Government and the banks are collectively failing to address the funding needs of small businesses which are the lifeblood of the economy.

So, is everything doom and gloom?

I do NOT think so.  There are sources of finance available to small businesses and most encouraging of all is that more of these are becoming available through the internet.

Role of Angel investors and High Net Worth Individuals “HNWI”

Across the UK and the USA there is an army of low-profile Angel Investors and HNWI who are providing their own capital to finance small businesses in return for a share of the equity in these businesses.  This is not without risk for these investors.  The risk includes not only business risk but the risk of being diluted by later investors or in the worst case being “crammed down” by later stage investors who use dilution as a tool to reduce the percentage holdings of the earlier investors.

These investors have both liquidity and experience to make investments and for the most part are investing their own capital.  You need to ensure that they are someone you can work with so personal chemistry is important.

There are many Angel networks which can be found through the Search Engines.  I would recommend that you find networks which are local to you as Angels tend to invest in businesses that they are close enough to visit on a monthly if not a weekly basis.  As a UK example of an internet platform, I have been recently using The Angel Investment Network which can be found at  (Full disclosure: no financial relationship exists between myself and this network).

In the US, AngelList is one of the leading Angel networks.  It can be found at  To learn more about AngelList, I can recommend a great interview by Andrew Warner from Mixergy where he discusses with Naval Ravikant, cofounder of AngelList how an Entrepreneur can use Angel List to raise money for a startup.  The link to the page also includes a transcript of the interview.

Crowd Sourcing

The internet is also an excellent platform to arrange crowd sourced finance for small companies. At present this is largely restricted to debt rather than equity as current legislation makes the raising of equity by this route both complex and expensive.

Crowd Sourcing enables a person or a business to post a request for a loan or finance and enables many potential lenders to offer to fulfill that need in whole, or normally, in part.  The platform manages the process, taking a small fee in the process.  The borrower then pays interest and principal back to the borrowers over time, with the platform managing the cash flows.

A key component of crowd sourcing is the quality of the opportunities and legislation is primarily designed to protect the unwary and unsophisticated consumer from investment offers which they may not understand and which, if not carefully vetted by experienced professionals, may not be of sufficient “quality”.  That having been said, crowd sourcing does offer a direct means to obtaining finance for suitable businesses which by-passes the banks.

A good UK example of this is Funding Circle which can be found at (Full Disclosure: I have no financial relationship of any kind with Funding Circle).  The critical factor to success for such a platform is that they carefully vet all loan applicants and keep the quality high.

I know Funding Circle has such a vetting process and has been successful to date.  Please note this does not amount to a recommendation from me for the platform, I only wish to cite it as an example.

Lean Start Ups

I have mentioned Eric Ries’s book  – The Lean Start Up – How Todays Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses (Amazon affiliate link) – before in my posts.



You can learn more about this at his site Start Up Lesson Learned at and the Lean Start Up website is here –  Andrew Warner has also interviewed Eric Ries on Mixergy (well, I think Andrew has interviewed just about everyone on Mixergy 🙂 ) here at

The essence of the Lean Start Up Movement is to start small, create a minimally viable product, prove the product with early sales and continuously test and innovate.  This has the key advantage of greatly reducing the start up capital required and keeping more of the equity in the hands of the founders.

If you like this post and you would like to get more from The Six Minute Strategistclick here and subscribe to my mailing list.  You will get sent a six part video course on Technology M&A.  Then, please go over to Twitter and Retweet to your followers. Until the next time, thank you for joining in the Conversation.

Is Scarcity of Funds a type of Capital Punishment by the Banks?

This post is all about the scarcity of capital and the role of the UK Banks who are failing to provide capital to small companies.

I see this as a form of Capital Punishment!



What is the role of the financial institutions we call Banks?

Banks are supposed to collect deposits from a wide range of savers, centralise these deposits and make them available to a range of borrowers, taking an interest spread in the middle, in payment for this service.

This efficiently recycles capital from those who have a surplus to those who have a deficit.  In addition, the bank has a responsibility to ensure that the capital is lent to borrowers who have a significant probability of repaying both the interest and capital within the agreed time period.

The term Mortgage Bank was coined for those institutions whose primary function was to lend to the private housing sector.

The term Merchant Bank or Investment Banks was invented for those banks who lend to businesses.

The term High Street Bank covers those banks serving the Consumer with branches in the High Street.

So my first question is who do “Bulge Bracket” banks serve?

What is happening in the UK? 

Following the financial crisis of 2008, the UK Banks, now significantly to a some degree in public ownership, have had a conflicting remit.  On the one hand, Government is pressing them to lend more to help finance the recovery and on the other hand telling them that they need to improve their financial ratios by raising more capital and by making less risky loans. Pushme-Pullyou!

If you run a Footsie 100 company and want to borrow £50 or £100 million that’s fine.  However Footise 100 companies are not going to help the economy out of the recession.  It is widely accepted that the only way to do this is to get small and medium sized enterprises – the SMEs – to create more jobs to offset public sector job losses and to create growth beyond this.  To do this SMEs need capital.

The Role of Government

Before we discuss how effectively Banks are supporting SMEs or not, let’s look briefly at the role of Government.  Politicians can provide both direct and indirect support.  By creating a favourable tax environment for business and entrepreneurs, Government can make it attractive to start and grow businesses.  By reducing the complex red tape, rules and regulations created by generations of politicians, Government can also help to make it easier to develop and grow business.

When did you last hear of a Government or a politician concentrating on reducing the amount of legislation instead of focusing on building their own careers and making their mark by pushing yet another piece of Central Government “policy” on to the law books.  The EU is the archetypical example of a group of legislators who, like the Banking system, have forgotten that their primary objective is to make society work more efficiently and instead focus on a self serving power accumulation game.

Like the banks, politicians have forgotten in whose name they govern and that taxation revenue is our money and not theirs to be used sparingly and responsibly.

Enterprise Finance Guarantee Scheme (“EFG”)

So putting aside the general and concentrating on the specific, the UK Government announced in January 2009 a scheme to increase loans to businesses by guaranteeing 75% of the amount lent by the bank through which the loan was arranged.  This replaced the Small Firms Loan Guarantee Scheme.

That sounds great then, more capital available for business.  Well not actually more capital but surely the banks will find it easier to lend their capital with much of the risk underwritten by Government.  Let us forget the additional bureaucracy required to obtain the loan because the banks can manage much of this and the interest premium to be paid above the Banks normal interest rate.  Let us focus on some simple practicalities.

Firstly, the scheme is only available when every, and I mean every, other loan avenue has been exhausted.  This does not mean that good businesses are getting funded because as we will see the Banks are not fulfilling their role, but that the weakest businesses with the riskier lending propositions, no track record and where the business founders have no assets (and this as we shall see is a key point) are those which are getting access to Government support and I predict that many of these will get into trouble. Companies included also tend to have little in the way of a track record.  This does not help the bulk of small established and well run SMEs.

Another classic case of Central Government intervening to create further distortions and inefficiencies in the market.   And I should mention that there are a plethora of rules and exemptions which make the scheme even more difficult to benefit from.

I conclude that for most SMEs this scheme is not the answer.

Bank Lending Policy

Let’s go back to the Banks now.  How do they evaluate to whom to lend money?

Thirty years ago the lending decision would have been made by an experienced Bank Manager who had a relationship with the SME business and it’s owners.  He would make a judgment on the business and it’s plans.  Today the Banks have improved this by centralising the decision making process to a risk assessment computer model which starts with top down macro assumptions and using factors as historic trading results gives the company a score and this decides whether or not the bank wants to extend a loan.

So there is no longer a relationship, bank managers are application processors at best.  Oh yes, we have just been through a recession so the computer is going to look at the trading performance in 2008, 2009 and 2010 and judge most businesses to be weak and in decline, failing to recognise that their financial performance has been adversely skewed by macro economic influences.

So current bank models are set to a default “don’t lend” setting on the basis of historical data.  Then the top down analysis looks at sectors and rules out those in which Bank economists are suggesting are higher risk or where the bank has historically high levels of bad loans.  This is exacerbated by macro sector selection.  The bank will take a view as to which sectors they feel are a good risk at this point in the cycle.  Make sure that your business is in the right sector if you want money from the bank –

Yes – I know that is nonsensical.

Then, for smaller companies, the bank’s default setting is asset based lending only.  This means that the assets of the business are insufficient security to lend on a debenture basis.  Firstly they will insist on a Directors Personal Guarantee giving them additional security and then want to take a charge over whatever other assets the Directors have to further cover themselves.  This will invariably include the Directors’ principal private residence although other property assets are also particularly welcome.

This “belt and braces” approach may be prudent in the eyes of the banks but I would ask what is the point of having a limited liability company and how does this help entrepreneurs grow their businesses?  It strikes me as a very one sided arrangement.  Perhaps it was ever so!


As a final word, I was recently told by one bank employee with whom I was discussing a lending proposition on behalf of a client that because the bank was prudent they calculated base rate  at 3% rather than 0.5% because the bank was “prudent”.

This was the most idiotic thing I have heard in a professional meeting in years.  I restrained myself from reminding him that the bank did not have the authority to set base rate as that responsibility has been granted to the Bank of England.

So much for Bank lending then.

In my follow up post to this I will try to suggest some possible avenues of funding for SMEs.


6MS How to beat Venture Capitalists at their own Game Part 6

Listen to my latest phonecast

What Next?

Take a look at my FREE video Tutorial “How to Turn Your Great Idea into a Business” which is all about Starting a Business and Raising Capital.