BQ Scotland Issue 21 Autumn 2015 by We Are UMi

BUSINESS QUARTER

Scotland: Autumn 2015

Celebrating and inspiring entrepreneurship

The appliance of science Stewart White on the links between sausages and medicine

Leading by example Alison McGregor chief executive of HSBC Scotland talks to BQ

Craft master Dougal Sharp, the man behind Innis & Gunn

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Lesley and Nigel Eccles on how to build a US$1bn business from fantasy

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E N T R E P R E NE UR I N T E R V I E W S

BU SIN ESS U P DAT E

Business Quarter Magazine

Scotland: Autumn 2015

Rearing a unicorn

IN SIGHT

LIFES T Y L E

E VE NT S

BUSINESS UPDATE bqlive.co.uk

EDITOR’S VIEW SCOTLAND ISSUE 21 Welcome to the 21st issue of BQ Scotland and my first as editor. Thank you to Kenny Kemp for his kind words in his final issue – I have big shoes to fill. Kenny has set the bar very high during his five years in charge and I hope that, as the magazine comes of age with this issue, I can live up to the standard he has set. By way of introduction, I’m a Highlander from Nairn near Inverness who spent nine years with The Scotsman newspaper, writing for the professional pages and the special projects section for three years and then for the business pages for a further six. I’ve covered the full gambit of business life, from banks and distillers through to life science companies and university spin outs. It’s not just the editor that’s new in this issue though; BQ Scotland has also had a facelift. Our designers have worked hard to make the magazine even clearer and easier to read and I hope that you, like me, will be pleased with the excellent results. Please let me know what you think by emailing peter@ranscombe.co.uk So, Scotland has given birth to another “unicorn”, a technology business valued at US $1bn. Congratulations to the team at FanDuel on their achievement. In this issue, two of the company’s founders, Nigel and Lesley Eccles, share the story behind raising cash from venture capitalists and private equity investors and talk about what you do next after you’ve reared a unicorn. This issue also looks at the other ways that companies can go about raising finance. Alison McGregor, head of HSBC Scotland, lifts the lid on the traditional banking route, while over lunch Kerry Sharp talks about some of the public sector backing available from her team at the Scottish Investment Bank. Bill Dobbie and Stuart Lunn from LendingCrowd reveal the new and exciting world of crowd funding, while Stewart White at life sciences firm Collagen Solutions recounts how he rescued parts of Angel Biotechnology from administration and raised funding by then listing them again on the Alternative Investment Market. Finally, master brewer Dougal Sharp explains why he went down his own route and raised cash direct from his fans by launching a “beer bond”. And, in a nice change of pace, Scottish Rugby boss Mark Dodson shines a light on the commercial aspects of the game as the national side prepares to take on Japan, Samoa, South Africa and the United States at the world cup. I plan to follow in Kenny’s footsteps with BQ Scotland, exploring new places throughout our country and new sectors of our economy. And I hope you will join me on this journey. Peter Ranscombe, Editor, BQ Scotland

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CONTENTS

Autumn 15

KING OF THE CASTLE

FOOD FOR THOUGHT

INSPIRATION TO LEAD HSBC’s Scottish head Alison McGregor talks to BQ

CRAFT MASTER BQ meets the man behind craft beer brand Innis & Gunn

Turning heads in a majestic surrounding

Scottish Investment Bank head Kerry Sharp at the BQ Business Lunch

GRAPE STUFF

CodeClan’s Rebecca Heaney on wine

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Celebrating and inspir ing entrepreneurship

FEATURES

ON THE RECORD Is the lobbying register a ‘ solution without a problem’?

EXCHANGE OF BLOWS The battle of wind power

BUSINESS UPDATE Who’s doing what, where, when and why

AS I SEE IT Simon Munro from the Business Growth Fund on investing in Scotland

GRAPE STUFF CodeClan Rebecca Heaney on wine

COMMERCIAL PROPERT Y A look at the latest deals

FASHION Turning Japanese

WHEN WORLDS COLLIDE Rugby meets media meets muscles

BIT OF CHAT Talking business

EVENTS Key Scotland events for your diary

MIND GAMES Fan Duel: profiling a US$1bn business

INSPIRATION TO LEAD HSBC’s Scottish head Alison McGregor talks to BQ

CRAFT MASTER BQ meets the man behind craft beer brand Innis & Gunn

44 58 72

REGULARS

FROM C ATTLE TO COLL AGEN Applying science to make a quality bio tech product

D R AW I NG A C ROW D Bill Dobbie and Stuart Lunn bring lenders to borrowers

FOUR DOOR PIN-UP Scott Whyte behind the wheel of a Porsche Panamera

ON THE RECORD bqlive.co.uk/breakfast

Ministers given short shrift over lobbying register Creating a register of those who lobby ministers and MSPs could put off some businesses from speaking to politicians. Peter Ranscombe reports Business groups have branded the Scottish Government’s plans to introduce a register of lobbyists as a “solution without a problem” that could stop some companies from engaging with politicians. Parliamentary business minister Joe FitzPatrick wants to introduce a register of public affairs consultants – or lobbyists – who interact with Scottish Government ministers or Members of the Scottish Parliament (MSPs). The Scottish Parliament’s Standards, Procedures & Public Appointments Committee (SPPAC) ran an inquiry into the subject earlier this year [2015] and a Scottish Government consultation on the proposals closed on 24 July. Ministers have now introduced their lobbying bill, with a view to legislating before next summer’s [2016’s] Scottish Parliament election. Instead of creating a register, the Federation of Small Businesses (FSB) has suggested that MSPs and ministers should adopt an ‘open source’ policy by publishing a list of the meetings at which they were lobbied. The FSB also raises concerns about companies being required to register their lobbyists, while charities and trade unions would be exempt. Colin Borland, the FSB’s head of external affairs in Scotland, said: “We are told that Scottish democracy has never been healthier, so we’re not sure what problem the government is trying to solve. What we do know is that this will mean more red tape for small consultancies and an administrative nightmare for membership organisations.

“There is a particular problem for small business owners, who may belong to a local business group and regularly meet their local MSPs. However the law tries to define lobbying or a lobbyist, some will and some won’t be caught. “We know that, where ambiguity exists, people err on the side of caution. We can’t have businesses withdrawing from public debate for fear of breaching the rules or because the bureaucratic burden is too great. We need to develop better links between politicians and the

made for a statutory register of lobbying,” he said. “Indeed this appears to be a legislative solution in search of a problem, which will subject firms, trade associations and other representative groups operating in Scotland to a new regulatory and compliance regime which won’t apply elsewhere in the UK.” Both the FSB and the CBI questioned whether creating a register would fit in with the Scottish Government’s own promises on “better regulation”. In its submission to the consultation, the CBI said: “With no evidence provided of a problem with lobbying in Scotland, we are sceptical about the case for creating a register and believe it would be disproportionate. The consultation paper itself acknowledges that action to create a register of lobbyists is pre-emptive, and that no current problem with lobbying exists. In the absence of evidence of a problem with lobbying in Scotland, we question whether these proposals meet the government’s principles of better regulation. Because of this, there is a risk that the proposals appear disproportionate and a solution in search of a problem.” FitzPatrick told BQ Scotland: “The Scottish Parliament already has strict rules around lobbying, and we are not aware of any impropriety relating to lobbying activity in Scotland. However, the Scottish Government agrees with the recent findings of the SPPAC, which concluded

“We are told that Scottish democracy has never been healthier, so we’re not sure what problem the government is trying to solve. What we do know is that this will mean more red tape for small consultancies and an administrative nightmare for membership organisations” country’s private sector, not put extra barriers in the way.” Borland added: “In our experience, our MSPs are one hundred percent honest. If we really want open source policy-making, the easy, cost-effective answer would be for them simply to declare all meetings at which, in their judgement, they were lobbied.” David Lonsdale, director of the Scottish Retail Consortium, pointed out that the proposals would create a two-tier system within the UK. “We support the aim of greater transparency in government decision making, however it is far from clear that a convincing case has been

that there is a case to further increase the transparency of lobbyists’ engagements with elected representatives. We believe a register that captures direct, face-to-face communication by lobbyists with MSPs and ministers would be a proportionate and reasonable step in further increasing public confidence. The Government has sought to adopt a collaborative approach to the development of the Bill. We welcome all contributions to the consultation, which builds on the findings of SPPAC’s inquiry.” He added that a full response to the consultation would be published in due course. n

ON THE RECORD bqlive.co.uk/breakfast

Winds of change buffet renewables sector Scotland’s renewable energy industry is battling for concessions from the UK Government after a series of blows over the summer put £9bn of investment and 5,400 jobs under threat. In June, energy secretary Amber Rudd said that the Renewables Obligation (RO) scheme, which provides funding for alternative energy projects, would be closed to onshore wind farms on 1 April 2016, a year earlier than originally planned. Chancellor George Osborne removed renewable energy companies’ exception from the Climate Change Levy, which is expected to add £450m to their tax bills in the current financial year and £1bn by 2020-21. Announcements followed in late July, including news of delays to the next round of competitive tenders to sell power through the UK Government’s flagship Contracts for Difference (CfD) scheme. Plan to cut the rates paid to smaller renewable energy projects by the Feed-in Tariff were unveiled in late August. Rudd also hinted that onshore wind farms could be excluded from bidding for CfDs in order to meet a manifesto pledge to end subsidies for new turbines. She said: “We have the tools available to implement our manifesto commitments on onshore wind and will set out how we will do so when announcing plans in relation to further CfD allocations.” Maf Smith, Deputy Chief Executive at industry association RenewableUK, said that the UK Government would be “rigging an auction, preventing competition and excluding the most

cost-effective option” if onshore wind farms were excluded from the CfD process. RenewableUK also pointed to figures from the International Monetary Fund, which showed the fossil fuel industry receives more than £26m of subsidies in the UK each year, seven times the amount spent on help for green sources. Trade body Scottish Renewables said that each megawatt hour of power generated by onshore turbines currently costs about £80. It pointed to comments from the Committee on Climate Change (CCC), the UK Government’s own statutory advisor, which said that, at £80/ MWh, onshore wind power should already be considered to be subsidy-free by 2020. In its response to the consultation over the early closure of the RO, seen by BQ Scotland, Scottish Renewables chief executive Niall Stuart said: “While we do not accept the rationale for the UK Government’s decision, it is vital that grace periods are put in place urgently with fair, clear and detailed eligibility criteria. Those that are eligible must be able to confirm that they qualify as soon as possible to allow investment to continue. Failure to do so would further undermine investor confidence, risking billions of pounds of investment and threatening the ability of the UK to reach its binding carbon reduction and renewable energy targets.” The trade body accused ministers of taking retrospective action because investors had already made commitments before the closure of the RO was brought forward by a year.

After a summer of subsidy blows from Westminster, Scotland’s renewable energy industry is fighting back, discovers Peter Ranscombe

“Such unexpected policy changes go far beyond impacting the onshore wind sector alone,” Stuart added. “Investors and developers across all industries will see sudden interventions of this nature as significantly increasing political risk – a point which is evidenced by the UK’s falling position in global rankings of market attractiveness.” However Stephen Lilley, a partner at Greencoat UK Wind, the London-listed investment fund, said the end to subsidies was “not a bad thing”. “Clearly we have got to a point where we have seen the government effectively wanting to cap [onshore windfarm development] and that’s perfectively fine,” he said. And Jenifer Baxter, head of energy and environment at the Institution of Mechanical Engineers, added: “Onshore wind turbines are an intermittent and expensive way to generate low carbon energy. “If we are serious about reducing global warming impacts and meeting the UK’s ambitious carbon reduction targets, Government needs to focus on winding-down all coal-fired power generation and replacing it with lower carbon alternative technologies that may include gas-fired power, which produces around half the amount of carbon. “Nuclear power generation also has a role to play, as this does not generate any direct carbon emissions at all. We cannot meet the UK’s ambitious carbon reduction target using current renewables, like onshore wind, alone.” n

BUSINESS UPDATE Fanduel investor backs Nameloop An investor and former chairman of FanDuel, Scotland’s latest US$1bn ‘unicorn’, has pumped £25,000 into technology start-up Nameloop. Owen O’Donnell, who was also chief financial officer at King, the company behind the Candy Crush game, will also act as an advisor to the company. Nameloop has developed a website and app that allows users to manage their contacts and choose groups or ‘loops’ of people with which to share their details. The business was founded in Glasgow in 2013 by serial entrepreneur John Wilmot and technology expert Craig Bartholomew and launched a free version of its app last year, with a Nameloop for Business version now also available. Nameloop aims to raise £250,000 through crowd funding website Crowdcube and the app is already being used in more than 45 countries.

(L-r) Vickie Henry, Sam Gregory, Bridgit Garvie, Joe Birchall, Rebecca Robertson, Adam Balfour at the launch of CodeClan in Edinburgh, Scotland. Photos by Chris Watt

CodeClan prepares to open its doors Scotland’s first dedicated digital training academy is preparing to open its doors. CodeClan will welcome its first students in Edinburgh in October and already has plans to expand into Aberdeen and Glasgow. The academy will train software programmers from scratch under the experienced eye of Michael Pavling, head of curriculum. The first cohort will graduate next February with new groups of students passing through the academy every ten weeks. CodeClan is designed to help plug the skills gap in Scotland’s thriving digital technology industry, which currently needs around 11,000 recruits each year. The academy is modelled on similar projects in Berlin, London and New York. Students taking part in the course will have a wide range of backgrounds, from people with university degrees and college diplomas through to people returning to work or changing careers. CodeClan has been developed by trade body ScotlandIS in partnership with Skills Development Scotland and the Bid for public sector work at www.publiccontracts Scottish Government.

WEBSITE OF THE QUARTER

Snack supplier takes slice of healthy eating

scotland.gov.uk

Healthy Nibbles, the vending machine supplier in which television nutritionist Amanda Hamilton holds a stake, is continuing to win a string of contracts. The latest company to install one of its vending machines, is Stripe Communications in Leith. Morna McLelland – managing director at Stripe – said: “The Healthy Nibbles team held a sampling session to work out the best selection of products to suit our tastes and dietary requirements. There’s something for everyone and it’s helping our team make healthier choices at work.”Healthy Nibbles was founded by managing director Sara Roberts, a management consultant who said it was hard to find nutritious snacks while she was travelling. She launched her Edinburgh-based company last year, with Hamilton coming on board as an investor and health and communications director in November.

BUSINESS UPDATE

bqlive.co.uk

TOP TWEETS Did you know more than 100 tonnes of fruit and vegetables were used at the Commonwealth Games last year? #legacy2014 - @ScotFoodAndDrink India’s IT market expected to be worth around £103bn by 2018 means big opps for Scotland’s #software #tech sectors - @ScotEnt

Pufferfish poised for maiden profit Pufferfish Displays is expected to return its maiden profit this year as the maker of spherical displays expands its business in Canada and the US. The Edinburgh-based company, which featured in the first issue of BQ Scotland in 2010, recently raised £615,000 to fuel its expansion from investors including Par Equity, the Scottish Investment Bank’s Scottish Co-investment Fund and Canadian investor Brian Creber. Creber is chief executive of Ontario-based B-Con Engineering and will join Pufferfish’s board as an investment director alongside Par Equity founding partner Paul Atkinson. Alan Faichney, former managing director at Concept Systems and ex-chief executive at Edinburgh Instruments, has also joined as chairman, replacing the long-serving Iain Mackay, who is retaining a seat on the board. The company was formed in 2004 as a spin out from an undergraduate project by Ollie Collier and Will Cavendish at the University of Edinburgh and began trading in 2006.

Pufferfish found fame in 2008 when its displays were used by pop band Coldplay as part of the set dressing for its Viva La Viva tour, with the spheres going on to feature in the opening ceremony of the 2009 Eurovision Song Contest in Moscow. Other customers using the displays have included car maker Audi, Disney’s Epcot centre and eye scanner maker Optos. Instead of simply displaying images, the company’s latest spheres are interactive, allowing users to touch them to bring up panels of information or zoom in on locations on maps. Clients using the interactive displays include Boeing, IBM and Microsoft. Geoff Kell, who joined as managing director five years ago, told BQ Scotland: “The investment is allowing us to open up and exploit the North American market. Having a presence on the ground in North America is vital so that’s making a huge difference for us. We expect to turn over about £1.5m this year and grow our headcount to 13 staff. We should also post our maiden profit.”

Great news for @sensewhere as Chinese internet giant Tencent makes strategic investment in the @EdinburghUni start-up” - @InvestEdinburgh @ScotchWhiskySWA Whisky to me means export excellence, innovation and productivity i.e. an industry at forefront of our economic challenges - @SCDIchief Returning to our roots in the #ScottishBorders. Vote for where we should build our distillery! -@RBdistillersLtd We think the Scots are pretty good. In the last 3 years, theyve given 10000 ‘suspended meals’ to the homeless through .@ SocialBite_. #socent - @socinvestscot Twice as many 50+ women #selfemployed in rural Scotland comp to urban, but many challenges. New report from #SCOW today @WEScotland - @Grow_Biz

Speakers named for private rented sector event Social justice secretary Alex Neil and Gerry More, trade body Homes for Scotland’s private rented sector (PRS) ‘champion’, have been unveiled as the keynote speakers at the 2015 PRS Forum Scotland. The event, which will take place at the Roxburgh Hotel in Edinburgh on 8 October, will bring together public and private sector organisations to discuss “making build-to-rent happen in Scotland”. Movers & Shakers, a property and construction networking forum, has organised the event with property developer Grosvenor, with support from Homes for Scotland and the Scottish Property Federation. David Yaldron, director of city centre developments for Grosvenor Britain and Ireland, said: “Scotland’s housing shortage is an acknowledged threat to economic growth, and the delivery of high-quality rental homes at scale can be part of the solution. Well managed build-to-rent homes provide the flexibility required for our modern lifestyles and can positively contribute to the local community. The forum will give all interested parties a chance to discuss the prospects and challenges of this sector in Scotland.”

Fantastic stuff! @EdinburghCastle and @StirlingCastle have been shortlisted for British Travel Awards @ BritTravAwrds - @VisitScotNews “New #mybordersrailway will make it easier for business tourists to reach @midgov and the central Borders @paulaamcdonald” @biztourismscot

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BUSINESS UPDATE bqlive.co.uk/breakfast

Shortlist unveiled for Scottish Business Awards Excitement is mounting as the organisers of the Scottish Business Awards (SBA) prepare to reveal which companies are in the running to win the top prizes. The shortlist is due to be announced on Friday 18 September, so keep a close eye on the www. bqlive.co.uk website for all the latest news about the competition. Hollywood actor George Clooney will be the keynote speaker at the SBA dinner on 12 November at the Edinburgh International Conference Centre. He follows in the footsteps of former US president Bill Clinton, entrepreneur Sir Richard Branson and musician Bob Geldof, who have each addressed previous SBA dinners. One of the most hotly-contested categories at this year’s awards, for which BQ Scotland is a media partner, is the PwC Award for Commitment to Company Values. Pauline Arnot, risk assurance director at PwC in Scotland, said: “Values, culture and behaviour are often seen as ‘soft’, but they’re actually what drive the business forward – and indeed, what can

“Values, culture and behaviour are often seen as ‘soft’, but they’re actually what drive the business forward” put it at risk. The way people behave – and the values and culture that influence this – have their most telling impact in the ‘moments that matter’ – the critical decisions and interactions that win and keep business and sustain profitability.” She added: “Businesses that have been able to create a high-performing culture recognise that it should be relevant to how things are actually done within the organisation, and it’s good to see some great examples here in Scotland through this year’s SBA nominations process. These businesses have created and conveyed clear purpose, vision and values, which define where and what they want to be as an organisation. They have then aligned this guiding ethos and driving goals with their operational model and ways of working to shape the habits and routines needed to deliver their objectives. As such, culture defines and drives success rather than being an accidental by-product of it.

Chivas prepares for Glenlivet expansion Chivas Brothers is gearing up for further expansion at its flagship Glenlivet distillery, hot on the heels of First Minister Nicola Sturgeon opening its £25m Dalmunach site on Speyside in June. Scotland’s second-biggest distiller, which is owned by Paris-listed drinks giant Pernod Ricard, was granted planning permission in December by the Cairngorms National Park Authority to expand The Glenlivet, which can currently produce 10.5 million litres of spirit each year. Now production director Gordon Buist has unveiled further details of the timeframe for the project, which will eventually lead to a tripling of the distillery’s output. He told BQ Scotland: “We’ve started our groundwork and preparatory work, so over the next two-to-three years we expect to complete the first phase of the expansion.” Buist said the first phase would double the distillery’s output to 21m litres, which would make The Glenlivet the largest malt whisky distillery in Scotland. The Glenlivet underwent a major £10m expansion in 2010, with capacity rising to the current 10.5m litres from six million. Laurent Lacassagne, chief executive and chairman at Chivas Brothers, added: “The Glenlivet is a very successful brand and became the leader in the global malt whisky segment in 2014. Its dynamic is in its traditional US market and in new markets such as India, South American and Taiwan. We will phase the expansion, which is consistent with the growth of the brand.” Their comments came after Sturgeon officially opened the Dalmunach distillery near Carron in Moray. Dalmunach is the first distillery that Chivas – which owns brands including Ballantine’s, Chivas Regal and Royal Salute – has built from scratch since the 1970s and sits on the site of the former Imperial distillery, which was mothballed in 1998. The stills at the ten million-litre distillery have been designed to create Scotch that has a similar flavour profile to that of Longmorn, with a hint of citrus characteristics. The opening of Dalmunach and the further expansion of The Glenlivet is part of a wider trend to create larger malt whisky distilleries to cope with the global thirst for Scotch. Johnnie Walker-owner Diageo, Scotland’s largest distiller, and Edrington – which makes Famous Grouse, Highland Park and The Macallan – are also building ‘super-distilleries’.

“We’ve started our groundwork and preparatory work, so over the next two-to-three years we expect to complete the first phase of the expansion. The first phase would double the distillery’s output to 21m litres, which would make The Glenlivet the largest malt whisky distillery in Scotland”

BUSINESS UPDATE bqlive.co.uk/breakfast

Full steam ahead for Borders businesses

MediCity Scotland ready to open

Diane Harbison, managing director at BioCity BioCity Scotland, the life sciences incubator Scotland, said: “MediCity will follow a similar The economic impact of the newly-opened centre in Lanarkshire, is preparing to open its clustering model to the one already successfully Borders railway will be discussed at an event MediCity Scotland facility in October. in action here at BioCity. in Galashiels on 3 October. Hugh Wark, MediCity will include facilities for around 50 One of the benefits of clustering similar Borders railway project director at healthcare businesses and is businesses together is that it leads to a higher Network Rail, and Samantha designed to bring together survival rate – for example, businesses at Smith, economic development entrepreneurs with clinicians BioCity Nottingham have a 91% survival rate, manager at Scottish Borders from NHS Scotland and which is fantastic.” Council, will discuss how academics from the the 30 miles of new track country’s universities. will affect businesses in BioCity, which opened Excluding offshore revenues, the area. John Mayhew, in 2012 on the site of Scotland’s economic output director of the Association a former Merck drugs stood at £141 billion in the for the Protection of Rural factory, estimates that 350 year to March, up Scotland, which is organising jobs could be created at the 2.9% year-on-year the event, said: “The re-opening site over the next five years. of the Borders railway is one of the most significant events for rural Scotland this year. Will it bring benefits to the rural landscapes Business intelligence consultancy Dufrain has unveiled plans to create a further 30 jobs this of the Borders, such as more sustainable tourism year as the Edinburgh-based business continues to expand. or reduced traffic on the A7? Or will it bring The company, which was founded in 2010 and which secured Royal Bank of Scotland as its challenges, such as pressure for more housing first client, has already taken on 20 staff this year, taking its headcount to more than 80. As on green-field sites or concentration of public well as expanding in Scotland, Dufrain – which was launched by directors Michael Gilmartin services?” Parts of the £294m railway – which and Stephen Henry – is also growing its business from its London office and its new premises links Edinburgh with Tweedbank – follow the in Manchester. former Waverley line, which was closed in 1969 following the Beeching cuts.

FACT OF THE QUARTER

“BioCity, which opened in 2012 on the site of a former Merck drugs factory, estimates that 350 jobs could be created at the site over the next five years”

Dufrain expanding team

Santander goes behind the curtain Banking group Santander has teamed up with the Ambassador Theatre Group to let business people see what goes on behind the scenes at the Edinburgh Playhouse. Around 20 business leaders will take part in a masterclass at the theatre on 17 September. The masterclass will include an insight into how the senior management team runs the theatre, how the programme is compiled and a behind-the-scenes tour of the venue. The afternoon event will be followed by dinner and a performance of the Dirty Rotten Scoundrels musical, starring Michael Praed, Carley Stenson and Gary Wilmot. The Edinburgh Playhouse is the largest working theatre in the UK, with seats for 3,059 people. Ambassador owns 39 theatres in total, including 12 in London’s West End, the King’s Theatre and the Theatre Royal in Glasgow, and the Lyric Theatre, the largest theatre on Broadway.

PROFILE scott-moncrieff.com

Scotland’s angels shine brightly on the global stage Angel funding, in Scotland at least, has become a mainstream feature of our business landscape. Other new and exciting types of funding - crowdfunding or peer-to-peer lending for example, have come along, but the angels are still going strong. This solidity of the angel market is possibly unique to Scotland, where the model was adopted early and is further on in its life

“In Scotland, not only are business angels actively investing, but they have lobbied for and established innovative support networks, value chains and partnerships that ensure Scottish entrepreneurs have access to funding, but also to valuable training, support, networking and collaboration.“ Gareth Magee, partner at Scott-Moncrieff

cycle than in other markets. It came as no surprise then to read the highlights from the UK Business Angels Association conference in July this year. The top ten conference conclusions make interesting if not entirely agreeable reading. In

a world class digital nation by 2020. As highlighted

in to the site itself, so successful has the one-stop-shop

particular, they suggest that although there has never

recently by First Minister Nicola Sturgeon, CodeClan

been in nurturing tech stars. But there’s no frantic

been a better time to invest in British technology, the

will focus initially on training software engineers,

pitching in the lift or putting on an investment ready

disjointed nature of the market and the lack of value

providing the new expertise in digital technology that

front at the foosball table – Codebase has an air of

chains and partnerships means it’s “a bit of a wild

is essential across all parts of the Scottish economy.

confident cool about it – the ideas do the talking.

west”. I couldn’t disagree more, and feel that, certainly in Scotland, we’re a long way from

Codebase is another jewel in our crown of

Furthermore, some of the Hub’s entrepreneurs are

collaborative working and the central-

already thinking about their business journey, and

the frontier.

Edinburgh hub is constantly evolving.

their inevitable cashing out. If some become business

In Scotland, not only are business angels

At a convenient mid-way point

angels themselves, they will provide a much needed

actively investing, but they have lobbied

between the US and Asia, it’s

succession plan for the sector. Codebase is well on

for and established innovative support

established itself as the UK’s, if not

its way to dominating the market, and where it leads,

networks, value chains and partnerships that ensure Scottish entrepreneurs have access to funding, but also to valuable training, support, networking and collaboration. Take, for example, the recent establishment of

Europe’s, largest tech incubator. But Codebase has never been about size. It’s intrinsically a building, but the power within is what counts. Collaboration between tech start-ups, established businesses, mentors, advisers, funders,

CodeClan, which opens

angels and niche freelancers

its doors this autumn.

is the essence of Codebase,

CodeClan is Scotland’s

and the (fairly brutalist)

first digital skills academy,

We have a sophisticated angel network, and an active, collaborative approach that will ensure our digital and tech businesses become world class. I would argue that Scotland is one of the most collaborative markets in Europe, if not the world. Perhaps those not on the bandwagon should take note.

building, merely the

aiming to provide the fresh

packaging. Progressive

new talent much needed

businesses have moved

to drive Scotland’s booming

in, buying into the

tech sector forward. Created

Codebase ethos to

by the angel community,

others will be sure to follow. We are not a wild west.

‘build, nurture and grow the

Scottish Enterprise, Business

next generation of tech superstars.”

Gateway, HIE, the Scottish

Then the angels came along - firstly

Government, and Skills

visiting their investee companies

Development Scotland, it is

but then spotting others while they

Gareth Magee is a partner at Scott-Moncrieff,

another excellent example

were there. Codebase’s most recent

leading business advisers and accountants

of collaborative working to

development takes this one step

in Glasgow, Edinburgh and Inverness.

deliver our goal of being

further. Angel investors are moving

E: gareth.magee@scott-moncrieff.com

BUSINESS UPDATE bqlive.co.uk/breakfast

Women’s course on right track

Fier launches shirts for ‘athletic’ men Entrepreneur and fitness fanatic Philippa Christie has launched a range of luxury shirts for men after spotting a gap in the market. Glasgow-based Fier – which means ‘proud’ in French – makes luxury shirts for men with athletic physiques. Christie’s shirts are handmade in Scotland using Italian cotton and fabric from Liberty in London. Fier has signed up Derek Brettell, a World Natural Body Building Federation champion and personal trainer, as its brand ambassador. The company said: “Fier’s athletic fit shirts go beyond the current market offering of slim fit shirts, catering for the broad shoulders, larger arms and chests, wider necks and narrow waist of the modern man.”

“We offer slim fit shirts, catering for the broad shoulders, larger arms and chests, wider necks and narrow waist of the modern man”

Railway contractor QTS Group is launching a women’s development programme to build the confidence of female workers in a male-dominated industry. The course, which is being run by training company Springboard Consultancy, is starting in September at QTS’s purpose-built training facility at Drumclog, near Strathaven in Lanarkshire. As well as putting four of their own staff through the training, the company also opened it up to women from other businesses. Lorna Gibson, business manager at QTS Training, said: “We all have challenges in the workplace and women’s experiences can often be different to what men face. QTS is keen to encourage women into what is a more male-dominated industry and this is about supporting them, and also offering other women from all areas that opportunity to be the best they can be in their careers.”

Dundee’s seeks JV partners Dundee City Council has called on investors, developers and their advisors to work in partnership with the local authority on the next stage of its £1bn waterfront redevelopment. Council officials have published planning guidance for the central waterfront to encourage “sustainable, design-led development that reflects Dundee’s status as the UK’s first UNESCO city of design”. Mike Galloway, executive director of city development at Dundee City Council, said: “We are open to joint ventures so would encourage businesses and entrepreneurs to explore potential opportunities with us. The guides will help investors gain an understanding of our approach to development, and how they can partner with us as Dundee waterfront expands. Almost all of the sites within the central waterfront are owned by Dundee City Council, so we can work in partnership with investors and take a longterm holistic approach to development to get the best for the city.”

Murray signs with Seedrs Tennis ace Andy Murray has joined the advisory board of London-based equity crowdfunding platform Seedrs. The Dunblane-born player

will offer the company advice on companies operating in the health, sport and wearable technology sectors. Murray, who owns the Cromlix Hotel near Dunblane, will also invest in businesses seeking finance through Seedrs and will help the company to promote its brand. He said: “I’ve always been interested in investment, and being able to get involved in an innovative way to help support British startups really appealed to me. Equally important was working with people I trusted and who fully understood the huge responsibility of handling people’s money. I’m looking forward to working with Seedrs and the entrepreneurs of tomorrow.”

Hotel for Charlotte Chapel It is planned to turn Charlotte Chapel on Edinburgh’s Rose Street into a 22-bedroom boutique hotel. Glendola Leisure Group, which owns the Grade B-listed building, is working with sister company Carlton Hotel Collection to create a four-star hotel and a restaurant. Previous plans to turn the site into a Waxy O’Connor’s Irish pub were knocked back by City of Edinburgh Council following objections from residents. The Baptist church bought the former Church of Scotland building on nearby Shandwick Place in 2013 and expect to move in early next year.

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BUSINESS UPDATE bqlive.co.uk/breakfast

Old Mutual opens in Edinburgh

MOVERS AND SHAKERS Alice Avis has become a non-executive director at Edrington, the whisky company behind brands including Famous Grouse, Highland Park and The Macallan. Avis was previously executive chair at skincare firm Lumene Oy, chief executive and chair of Sanctuary Spa, director of marketing and e-commerce at Marks and Spencer, and global brand director of Johnnie Walker. Chivas Brothers, Scotland’s second-largest whisky distiller, has appointed Sophie Gallois as its marketing director. Gallois joins from Ricard, another branch within parent company Pernod Ricard, where she was also marketing director. She replaces Eric Benoist, who becomes managing director of Pernod Ricard Wyborowa in Poland. ‘Big four’ accountancy firm Deloitte has named Gavin Hood as head of its advisory corporate finance practice in Scotland. He succeeds senior partner Ian Steele, who has recently retired. Deloitte has also hired Bank of Scotland pair Roger Mayor and Aneeta Nayak as assistant directors within the practice. The team recently advised Mike Welch on the sale of his Blackcircles online tyre retailer to Michelin. Sir Howard Davies took over as chairman of Royal Bank of Scotland (RBS) on 1 September. Davies is a former chairman of the Financial Services Authority, deputy governor of the Bank of England and director general of the CBI. His arrival at RBS was delayed by his work as chairman of the UK Airports Commission. Davies had been due to become a non-executive director at RBS in June but his arrival was delayed until the following month while his commission reported on the future of London’s Heathrow. He succeeds Sir Philip Hampton, whose departure was announced last year. [2014]

Old Mutual Global Investors is opening its first office in Edinburgh after signing a lease on offices in the city’s Charlotte Square. Allan MacLeod, head of international distribution, will be based at the new site, which will also be used by Russ Oxley and his rates and liability driven investment team, and sales representatives who cover Scotland. Old Mutual signed the deal with for two floors at number ten with the Charlotte Square Collection, which is owned by Fordell Estates, part of property investment fund Sopica Global Real Estate.

QUOTE OF THE QUARTER “Mobile data is now essential for more and more businesses and customers, but too many communities in Scotland are still 2G towns.” Andy Willox, Scottish policy convenor at the Federation of Small Businesses, after Ofcom statistics showed Scotland has the worst 3G coverage of any UK nation Keeping trade secrets

Bank of Scotland has promoted Gillian Henderson to the newly-created position of lead director for commercial banking in Scotland. Henderson joined the bank straight from university more than 15 years ago and, in her new role, she will support regional managing director Alasdair Gardner, especially with the delivery of parent company Lloyds Banking Group’s national house builders strategy and social housing commitment.

Long-serving public relations consultant Alistair McLean is retiring as a director of Acumen, the PR agency he founded in Edinburgh with Kevin Dorrian in 2002. A keen golfer, McLean was accountancy firm Price Waterhouse’s senior PR and marketing manager outside London and later ran PwC’s PR and marketing team in Scotland. Acumen will continue with Dorrian at the helm. Economic development agency Highlands & Islands Enterprise (HIE) is taking on board Shona Austin, a senior banking manager at Bank of Scotland, on secondment for 12 months. Austin’s secondment is part of HIE’s and the bank’s efforts to “collaborate on fostering sustainable economic growth in Scotland”.

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A new European Union directive could make departing employees think twice before stealing trade secrets, according to a legal expert. Colin Hulme, head of the litigation practice at law firm Burness Paull, said the directive, which is due to be introduced later this year, will standardise the way trade secrets are treated across member states. The draft directive highlights the need to take “reasonable steps” to maintain secrecy. Hulme said: “Simply labelling a document as confidential will not be enough for a trade secret if, in practice, you do not treat the information contained in it as such. By acting quickly and obtaining an interim interdict a business may be able to preserve the commercial value in the trade secret before the information becomes common knowledge. It is hoped that when the proposed EU directive comes into UK law such steps will be easier, quicker and cheaper to take. Better yet, it may sufficiently raise the profile of trade secrets so that departing employees and competitors don’t just assume that they can take them without consequence.”

BUSINESS UPDATE bqlive.co.uk/breakfast

Sweet treat Fudge and tablet maker Mrs Tilly’s has unveiled plans to recruit 16 staff and expand in Canada after securing a £1.6m finance package from HSBC. The Stirlingshire-based family business – which has already enjoyed success in markets such as Denmark, France, Germany, Poland and Switzerland – will invest in further equipment to keep up with demand. Managing director Blair Paterson said: “My parents founded the business in the family kitchen in 1997 and have worked extremely hard to make it the success it has become today. We have ambitions to grow the business and take Mrs Tilly’s fudge and tablet to an even wider international audience.”

“The Stirlingshire-based family business will invest in further equipment to keep up with demand”

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IP 10 0 Clydesdale Banks and Yorkshire Banks have thrown their combined weight behind the IP100 league table, an initiative to celebrate the intellectual property (“IP”) created by innovative companies throughout the UK Earlier this year, BQ Scotland and its sister magazines teamed up with the experts at Metis Partners, an award-winning IP solutions firm, to launch the league table, with companies from a broad range of economic sectors throwing their hats into the ring to take part. There are already 50 companies registered. Many small and medium-sized enterprises (“SMEs”) may not even consider their IP to be an asset, yet their brands, patents and other inventions are an important part of their business and can become a source of value too. Entering the IP league table is a great way to get an early indication of how much a company’s IP could be worth, which in turn can become an important factor when seeking finance from investors or when it comes to selling a business. The Clydesdale and Yorkshire Banks IP100 will identify the businesses that have made significant investments in their IP through commercialisation, management, and research and development (“R&D”). Metis Partners is looking at data relating to five main IP asset classes – brands, critical databases, patents, software, and trade secrets – and will calculate a score for each business, which will be used to rank companies in the IP100 league table. There could be a few surprises as some hitherto unknown companies might emerge as IP Champions! “We are really proud to sponsor this new league table,” says David Hayers, head of growth finance at Clydesdale and Yorkshire Banks. “It will give much-needed recognition to a wide range of companies that have already started to commercialise their IP. IP-rich businesses are key growth drivers of the UK economy and yet have often found it challenging to secure

debt finance to accelerate their growth plans. “Clydesdale and Yorkshire Banks have a strong pedigree in funding both early- and late-stage IP rich businesses. This partnership reinforces the Banks’ commitment to this critical sector of the economy and is just one example of the innovative approach that we are taking to funding SMEs in the UK.” Stephen Robertson, founder and director at Metis Partners, adds: “We are thrilled to have the Clydesdale and Yorkshire Banks on board, having worked with them in the past on the many investments they’ve made in IP-rich companies across the UK. We look forward to that relationship continuing around the IP100.” The league table has been open to all businesses throughout the UK and has been free to enter, giving every company the chance to be recognised for its ideas and innovations. Entering the IP100 isn’t just about winning the Champions’ League of innovation though – taking part can also be a useful business tool. This in turn opens up a whole stream of options when it comes to raising finance or restructuring debt. Recognising the value of intangible assets such as IP is playing an increasingly-important role in modern business, especially when it comes to fundraising. Gaining recognition for the value of its IP can also help companies when it comes to: boosting the exit valuation when selling a business; improving access to potential new markets; creating new barriers to entry in order to deter potential rivals; and protecting an existing market share. As well as featuring in BQ Scotland, the IP100 league table will also receive coverage in the magazine’s sister titles in the North-East of England, the West Midlands and Yorkshire. Companies from

Find out more about the Clydesdale and Yorkshire Banks IP100 league table at www.bqlive.co.uk/ip100

throughout the UK have already signed up, celebrating the wealth of IP being created by businesses across a broad variety of economic sectors. Bryan Hoare, managing director at Room 501, the publishing company behind BQ Scotland and its sister magazines, says: “The BQ brand is all about celebrating entrepreneurship, whether it’s in our magazines, on our BQ Live website or across our events. What better way to mark the success of entrepreneurs than by recognising the amazing ideas and innovations that make up their IP? “But this isn’t just a vanity exercise – recognising the value of your IP can bring really concrete benefits to your business too, when it comes to having conversations with your bank or other investors about taking on fresh funding or restructuring your debt. “It’s also important to shout about your achievements – making sure that you talk about your IP and your R&D can help you to attract new customers, open the door to partnerships in other countries or sectors of the economy, and put off potential rivals from entering your market. This is no time to hide a light under your bushel – it’s time to make a noise about your achievements and celebrate your ideas and innovations.” The IP100 is already making waves, with details about the league table appearing on the websites of ScotlandIS, the national trade body for the thriving digital technologies industry, as well as Interface, the public sector body that helps businesses to access the talent and expertise in Scotland’s colleges and universities and also Entrepreneurial Finance Hub, a digital and physical entrepreneurial finance platform, to name a few.

FOCUS ON THRE

E IP100 ENTRAN

BAD IDEA ORGANISATION From playing shops to watching The Apprentice, business and entrepreneurship is seen to be an attractive option from a young age, if you can find the right idea. Working with schools, Bad Idea Organisation encourages young people to realise their entrepreneurial passions and equips them with the tools to succeed in self-employment. Its tagline, “Bad Idea – there’s no such thing”, expresses the principle of its cause: to show teenagers that, with a little bit of help, their small ideas can be expanded into a viable business. Bad Idea is the brain-child of Anthony Gerrard. While in the start-up period, he realised that the business support network was not built for those from a disadvantaged background or without another source of financial income or security. Bad Idea began as part of U18 – an online network for under 18s – but grew and developed into its own entity, designed to break the status quo about who can start their own business, based on Gerrard’s own experiences. The programme itself is universityaccredited and free to schools. Pupils work with teachers, mentors and each other to give them the tools to turn their idea into a reality. They learn how to make business plans and receive insights from professionals: skills that a normal high school education does not provide them. Though Bad Idea only officially began in 2013, Gerrard has plans to expand globally within the next year. After being the UK lead in a European Union initiative, it has a pipeline of 12 countries that would love to incorporate the Bad Idea programme into their education system.

CONNECT-IN On average, people spend ten minutes a day looking for lost items, whether it’s their phone, their keys, or their umbrella. That’s ten minutes they could be catching up on the news, lazing in bed, or assembling that packed lunch they never have time to make. Well, for everyone with a smart phone, there is a solution: Lupo. Lupo – a nifty, inconspicuous keyring – is Connect-In’s flagship product: a Bluetooth, smart accessory that works together with a mobile app to help users find and locate their items straight from their phone. At the press of a button, they can use Lupo to find their keys with their phone, or find their phone with their keys. Leave your keys in an airport or on a train? Your app can locate them. Simple, effective and incredibly useful. One of the elements that makes Connect-In stand out from the smart accessory crowd is the length of the battery life. A smart watch or other piece of wearable technology needs to be charged every few days or weeks. Raj Stark, Connect-In’s founder and director, believes that this is far too often; Lupo’s battery lasts for more than two years – making its technology miles ahead of other brands. Connect-In is still a relatively new company, but it is already receiving attention from journals, investors and the press. It has won numerous industry awards – most recently the Entrepreneurial Spark Best Business Award in July. It has had massive success in the marketplace already, where its provisional app had more than 80,000 users in less than three months.

SPEECH GRAPHICS Video games are a massive industry, providing hours of entertainment for all ages and notching up a value of more than £40 billion worldwide. With harsh competition between companies and gamers’ expectations rising, these businesses are constantly innovating, and require animation that is more complex and higher quality. Enter Speech Graphics, an award-winning software start-up that is pushing the boundaries of procedural facial animation technology. Using its audio-driven, muscle-based technology Speech Graphics is the only company that can achieve the fluidity and accuracy of natural speech using audio alone. This results in highly accurate and scalable facial animation. Its model works for any language and any amount of dialogue. It even creates emotive speech by matching the intensity of facial movements to the intensity of the speaker’s voice. To accomplish this great feat, Speech Graphics has a highly-skilled multidisciplinary team, including experts in the fields of speech technology, animation and video games. The team’s talents have not gone unnoticed and the company has received numerous accolades, including a prestigious John Logie Baird Award for innovation, a Develop Industry Excellence Award, a Santander Entrepreneurial Award, and an LT-Innovate Award. Additionally, it was shortlisted for the 2014 TIGA Games Industry Awards. As well as working with entertainment leaders such as Warner Bros and Def Jam Recordings, Speech Graphics has also delved into education. Using its one-of-a-kind muscle animation system, it can animate not only facial muscles, but also other speech organs, such as the palate and tongue. This system was used to create Simone, an animated teacher for those learning English as a foreign language. Users can see the how the tongue moves inside the mouth to create speech, as well as the movement of the soft palate and airflow. This information is then used by students to perfect their

www.bqlive.co.uk/ip100

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Lessons from

Debt isn’t the only game in town when it comes to growing a business. Simon Munro from the Business Growth Fund explains where equity funding fits into the mix In 1945, in between nationalising the railways and creating the National Health Service, the Labour government setup both the rather grand-sounding Finance Corporation for Industry (FCI) and the Industrial & Commercial Financial Corporation (ICFC) to plug the “MacMillan Gap”, a shortage of long-term growth finance for small and medium-sized enterprises (SMEs) that had been identified in the 1930s. Those two bodies were merged in the 1970s to form Finance for Industry, which in turn became Investors in Industry in the 1980s and took on its much more familiar name – 3i. The company is still around today, albeit under a very different guise and, having floated on the stock exchange in 1994, it became a driving force behind scores of blockbuster private equity deals. Yet that demand for growth finance among SMEs hasn’t gone away; indeed, since the 2008 financial crisis, those cries for help from cash-starved businesses have only grown louder. That’s why Business Growth Fund (BGF) was setup in 2011 by five of the UK’s biggest banking groups – Barclays, HSBC, Lloyds, Royal Bank of Scotland and Standard Chartered – to help plug the gap. We were launched with £2.5bn of cash to invest in businesses and we are run as an independent company, chaired by Sir Nigel Rudd. We typically make initial investments of between £2m and £10m in privately-owned firms or businesses listed on the Alternative Investment Market (AIM), with our portfolio companies usually having turnover from £5m up to £100m. In return, we take minority equity stakes and a seat on the board, typically investing for around five to ten years, longer than most of our venture capital or private equity peers.

But, with the lending market continuing to recover following the banking crash and the UK economy carrying on its growth despite the Eurozone debt woes, why should companies look at equity finance instead of traditional debt? Why give away a stake in a business that’s been created through blood, sweat and tears? According to the Scottish Government’s business finance report earlier this year, around one in four companies continues to warn that accessing external finance is an obstacle to the success of their business, illustrating the point that companies still need money to grow. When it comes to equity instead of debt, time is certainly a factor. Many entrepreneurs are looking for patient, long-term investors, which BGF certainly offers with its growth capital. It’s not just about the money though. As well as taking a seat on the board, BGF also introduces our portfolio companies to talented individuals who can help to grow the businesses. These can be advisors who can open doors to export markets or help identify takeover targets, or it can be an experienced pair of hands and a wise head to become chair of the board of directors to help guide firms through the growing pains of life as a high-growth outfit. Demand for our finance is running high in Scotland, where we broke through the £100m barrier last year, bringing cash and expertise into 17 businesses in total since 2011. Scotland may only have 8% of the UK’s population, but its companies have successfully attracted one-fifth of all the money that BGF has invested

AS I SEE IT bqlive.co.uk

history

“According to the Scottish Government’s business finance report earlier this year, around one in four companies continues to warn that accessing external finance is an obstacle to the success of their business” throughout these islands. As a Scot, that’s something that I’m immensely proud about – our rich history of entrepreneurialism is as alive and well today as it’s ever been. Together, those 17 companies have more than 1,200 staff and bring in revenues of around £295m, making them significant employers and big contributors to our nation’s economy. We’re also starting to make follow-on investments, helping companies to expand even further as they continue to grow. My own experience comes from the oil and gas industry and our team has completed several major deals in the North-East, despite the drop in the oil price. Our investments stretch throughout Scotland though and across a broad range of sectors, from Morphsuits fancy dress costume maker AFG Media in Edinburgh to Glasgowbased M Squared Lasers. Our pipeline of deals currently stretches from the Borders to Shetland. While sets of initials like FCI and ICFC may have faded away into the history books, B G and F is making its mark in Scotland. Equity finance has a long and rich heritage and is here to stay, providing an alternative to debt and backed up with the expertise and advice that can help entrepreneurs to move their businesses on to the next level. n Simon Munro is Scotland director at BGF

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Nigel and Lesley Eccles aren’t just partners in life but partners in business too. As two of the five founders of FanDuel, they have created a ‘unicorn’, a tech outfit valued at more than US$1bn. After building the business in America, they now have their sights set on the UK and Europe, as Peter Ranscombe discovers

From fantasy to reality Unicorns are mythical beasts. They are also startup companies, particularly from the technology sector, which have been valued at more than US$1bn. And now Scotland is home to not one, but two of these legendary creatures. The designation seems particularly fitting for Edinburgh-based FanDuel, which runs a website that allows Americans to create fantasy sports teams and then play against other users in open leagues or against friends in private contests. What sets the format apart from other competitions is that leagues can last for just a single day or week, meaning that players don’t have to commit to a whole season. While the games may be fantasy, the business is very, very real. More than US$75m (£49m) is paid out each week in cash prizes, with the amount that players can win varying according to how much they have paid to enter their league. The appeal of winning real money in a single week has attracted more than one million paying players, boosting the company’s turnover from US$1m in 2011 to US$5m in 2012, US$15m in 2013 and US$57m in 2014, with revenues expected to top US$150m this year. In July, FanDuel raised US$275m in a series E fundraising that was led by venture capital giant KKR, with Google Capital, Time Warner Investments and Turner Sports among the other investors taking part. The National Football League (NFL) and National Basketball Association (NBA) got involved, as did the owners of some of the franchised sports clubs. Online gambling might be illegal in America, but

the law protects fantasy sports games because they involve skill rather than chance. The deal valued the company at more than US$1bn and underlined the global scale of the business, with its founders criss-crossing the Atlantic from their bases in Edinburgh and New York to manage the growth of the firm, living what from the outside may appear to be a jet-setting lifestyle. “Eating a bacon roll isn’t really part of a jetsetting lifestyle is it?” jokes chief executive Nigel Eccles as he tucks into his breakfast. Nigel has landed back in Edinburgh just a few hours

After studying mathematics, Nigel moved to Oxford, while Lesley got a job with a software consultancy in Glasgow having completed her modern languages degree. After “doing the long-distance thing” as Lesley puts it, the couple moved to London together. But it was their return to Scotland in the summer of 2007 that sparked the idea of creating their own tech start-up. Nigel had taken a job with Johnston Press, the regional media company that owned more than 200 other local newspapers and which had paid the Barclay brothers £160m to

“I’d been at two start-ups, one of which became BetFair, and I really wanted to go back and start my own business” earlier from his latest trip to New York and is joined by Lesley Eccles, executive vice-president for marketing. Along with chief product officer Tom Griffiths, creative director Rob Jones and technology director Chris Stafford, the husbandand-wife team founded the company in 2007. Back then, things were very different, both for the company and for the couple. Lesley, from Forfar, and Nigel, from Northern Ireland, had met in 1995 while they were both students at the University of St Andrews.“We met at a ceilidh at the Golf Hotel,” remembers Lesley. Was it love at first sight? “Hmmm, I don’t know,” laughs Lesley. “I think it might have taken six months.” Nigel chips it: “It was certainly interest at first sight.”

buy The Scotsman, Scotland on Sunday and the Edinburgh Evening News just a year earlier. “I’d been at two start-ups, one of which became BetFair, and I really wanted to go back and start my own business,” explains Nigel. “I came up with this idea and was looking around for someone to start it with.” His idea was Hubdub, a website that allowed users to place wagers on the outcome of key stories that were in the news, such as who was going to win the 2007 US presidential election. “Les and I met Tom Griffith at a tech networking event in Edinburgh,” Nigel says. “Tom, Rob and Chris had another start-up called Groopit. I started helping them with that and we realised that there was a really good opportunity for us to

ENTREPRENEUR bqlive.co.uk

work together so we joined forces and launched Hubdub. We founded the company in November 2007 and got investment from Kevin Dorren and Iain Ritchie, two very wellknown tech investors in Scotland. We launched a demonstration in January 2008 in Palm Springs.” Buoyed by the launch of the business, the founders went looking for further funding to help grow the company and secured a meeting with Pentech Ventures. But the financial winds of change were already blowing. “As you’ll remember, 2008 started well but then there was the financial crisis towards the end of the year,” recounts Nigel. “In fact, the day that we pitched to Pentech was the day that Lehman Brothers went bankrupt. So it was a pretty nervous period between getting the term sheet and closing that funding round, which we did on Christmas Eve 2008. “We came back in January 2009 and we looked at Hubdub, which we’d been working on for more than a year, and we started to think that it was going to be more challenging than we thought. And then, after two or three months, we started to realise that we probably weren’t going to hit our forecasts and it was incredibly hard to see how we were going to be successful with that product.” Lesley, Nigel and their fellow founders headed to the South by Southwest film, interactive and music festival in Austin, Texas, in March 2009. A photograph on FanDuel’s website records the moment as they sat around with Post-It notes and brainstormed how they could solve their problem with Hubdub. “One of our part-time community managers on Hubdub was a fantasy sports player and so we questioned him about it because we thought it was interesting,” says Nigel. “That was really the Genesis of the idea that we would pivot away from Hubdub and into FanDuel. “None of us had played fantasy sports. We really didn’t know the market at all. I had no experience as a player, so I looked at the market and at that time there were about 30 million people playing fantasy sports. It was legally secure, you could play it for money and Federal law had blessed that and so really that’s what got us interested. Existing operators like Yahoo and ESPN hadn’t innovated for eight or ten years and so we thought we could do a lot better. We also found that younger players weren’t playing fantasy sports as much as you’d expect; the

“Culturally, we’re much more aligned with America than we would be with football in Scotland. Personally, I’ve never followed football and wouldn’t be able to tell you a single player on the Scotland team” average age of a player was in their mid-40s. We thought we could make it faster and more friendly for the mobile platform, which would bring in a younger demographic.” “But we both play now,” adds Lesley. “We play the NFL games and some NBA games. Baseball is incredibly difficult though.” FanDuel offers players the choice of four professional sports – American football, baseball, basketball and ice hockey – as well as college basketball and football. With talk of all these exotic sports, does it feel strange for the company to earn its bread and butter from games that are so

culturally-different to those that we’re so used to in Scotland? “It was in the early years,” agrees Nigel. “We had to learn an incredible amount about all the nuances of the sports industry. That was an incredible challenge but I’d say not today. We’re immersed in it now.” Lesley adds: “Culturally, we’re much more aligned with America than we would be with football in Scotland. Personally, I’ve never followed football and wouldn’t be able to tell you a single player on the Scotland team.” She pauses for a moment. “Ally McCoist – is

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he still playing?” she laughs. “Part of it is also the way we live nowadays. American media is everywhere. We have ESPN on in the office. It’s very easy to immerse yourself in it.” After coming up with the idea of switching from events in the news with Hubdub to events on the pitch with FanDuel, the next step was to start scaling-up the business. “The first year was about getting the product right,” says Nigel. “Then in 2011 we raised about US$4m and for the first time we had money to start marketing the product. From there we’ve seen dramatic growth.” That growth has prompted the company’s headcount to rise from 100 staff at the start of the year to around 400 now. Some 150 workers are based in the UK, with the rest in the US. Fresh from speaking at the Turing Festival, Edinburgh’s international technology festival, Lesley is optimistic about the outlook for the sector in Scotland. “When we started back in 2007 and 2008, there really wasn’t much here in terms of a tech industry,” she explains. “In the early days we were very bullish about being able to build one here. The way we approached that was ‘Let’s build a really successful company and then start to give back and build that community as much as possible’.” Research suggests that Scotland’s tech sector needs to recruit 11,000 staff each year to keep up with demand, prompting trade body ScotlandIS to join forces with the Scottish Government and Skills Development Scotland to launch CodeClan, the country’s first dedicated digital skills academy, which is opening its doors this autumn. As well as increasing training, the very fact that Scotland now boasts two “unicorns” also appears to be helping the situation. As well as FanDuel, flight comparison website Skyscanner – run by chief executive Gareth Williams – has been valued at more than US$1bn. “What we’re seeing now with Skyscanner and us being here and the likes of FreeAgent and all these other successful tech start-ups is that we’re able to attract talent up from London, which is something that we’ve not been able to do before,” says Lesley. “There is an ecosystem of technology companies, so it’s less risky for someone to move themselves and their family up here from London to relocate because it’s not just us or it’s not just Skyscanner here. “I think Edinburgh is a fantastic source for talent and the quality of candidates that we get is

“Don’t give up,” replies Lesley immediately. “The number one killer of start-ups is that they just give up because it’s too hard. And it was incredibly hard in the early days”

incredibly high. We were in a position where we weren’t really well-known in the UK until relatively recently because our customer base was in the US. Now we’re finding that, as we become better known in the UK, we’re getting more applications from even higher-quality candidates. We’re also opening our office in Glasgow in September, which is broadening our reach for talent as well.” Lesley’s comments about the ecosystem in Scotland will be music to the ears of Ken Morse, the former managing director of the entrepreneurship centre at the Massachusetts Institute of Technology (MIT), who back in 2009 said that creating such an environment was the key to building globally-successful companies north of the Border. One of the reasons that FanDuel and Skyscanner were asked to speak at this year’s Turing Festival was to inspire the next generation of tech start-ups. So what are Lesley and Nigel’s top tips for budding entrepreneurs? “Don’t give up,” replies Lesley immediately. “The number one killer of start-ups is that they just give up because it’s too hard. And it was incredibly hard in the early days.” Nigel nods. “Not giving up is really important,” he agrees. “Also, really focus on having the best

co-founders and early employees that you can. Nothing kills start-ups faster than hiring badly. It’s the hardest thing to fix. If you pick the wrong co-founders then it’s usually terminal.” Not giving up was clearly a lesson the pair learned during the transition from Hubdub to FanDuel. Coming up through the ranks has also made them appreciate the way in which they have been able to access funding, totalling around US$363m so far. “The most recent round was much, much more straightforward,” says Nigel. “We came out of the last football season and we’d had an incredible season. Two-thirds of our revenues came in the fourth quarter last year. We grew much faster than we’d expected to, so we felt that we should do another funding round. One of our existing investors, KKR, had only invested a small amount in our series D round last summer and they were very keen to lead the round and they made us an offer we couldn’t refuse. We also went out and spoke to some of our media partners, so Turner came in and NBC. Somewhat to our surprise, Google invested as well. Google had never made a sports investment so it was very significant that we were its first one. “So that round was actually fairly straightforward. Compare it with, say, our series B round, which was our first funding round for FanDuel. That was very early and I don’t think most investors thought there was a market, never mind us winning the market. So we had to get to scale and re-prove a lot of things. It was a dramatically different experience. One of the things about our funding rounds now is that they’re completely discretionary. We could decide not to raise money and just not grow quite as quickly.” FanDuel has already used part of the US$275m it raised over the summer to buy Kotikan, an Edinburgh-based app developer that had been undertaking work for it over the previous 18 months. Kotikan, which was turning over about £2.4m before the acquisition and which had also designed apps for Skyscanner and Standard Life, and its 56 staff have now been rolled into the FanDuel fold, along with New York-based NumberFire and a team from Orlando’s Zynga Sports. “NumberFire is a tools business – its

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mission is to make every sports fan better educated,” says Nigel. “So they can give you stats on a team’s likelihood to win a game or if a team is down in the fourth quarter then what percentage chance does it have of coming back. They do very, very deep analytics and they employ data scientists who mine those sort of things. Zynga Sports is very deep in social mobile games, so we’re looking to that team to enrich our core product.” Nigel is clear about the purpose for the broader FanDuel business. “I’ll tell you one thing, the valuation isn’t a focus,” he says. “The mission of the company is to make sports more exciting. If you take a play-off game when it’s the end of the fourth quarter and your home team is down three points and they’re on the five-yard line then that’s an edge-of-the-seat moment of excitement. Compare that to a late season game and your team is not going to make the playoffs and they’re playing another team that’s not going to make the play-offs then that’s going to

be a dull game. Our mission as a company is to make all games like that play-off game.” Perhaps a suitable comparison for football fans here in Scotland would be making mid-table games at the end of the season following the split as exciting as a cup final or those final few matches when teams are competing to clinch a Europa League slot. Allowing users to build fantasy teams using real-life players under a salary cap allows them to have an added interest in the outcome.Much of the latest funding round will be spent on marketing, pushing the FanDuel brand in the US, but the Eccles also have their sights set on expansion into Europe. Nigel says it’s “early days” and that the company would look to make the leap itself rather than partnering with another business, such as an online gambling firm. “We’re provisionally targeting that we might launch something next year,” he says. “I think the UK will be our first market.” Lesley adds: “We feel like we’ve only just scratched the surface.”

With the pressure of running an international business and balancing family life with three children, how does it feel to be married to one of your business partners? There’s a pause and the pair turn to each other and say: “How about you answer that question?” before sharing a laugh. “It’s much easier to be married and both us of working in this business than for just one of us to be working here,” begins Nigel. “It’s incredibly all-consuming, so when you’re both working on it you can both understand it. The other thing I’d say is that it works well for us, but marriages may vary for other people. I’ve heard other people say that they’ve got very good marriages but they could never work together. When other people ask about it, I’m hesitant to recommend it because I don’t want to be the cause of your business failing along with your marriage.” Lesley laughs “I definitely think that if we weren’t both in it together then we would have divorced by now, for sure,” n

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Leading by example

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As chief executive at HSBC Scotland, Alison McGregor leads a team of 3,700 people and represents the bank at the highest levels of public life. Peter Ranscombe finds out more

As the plane climbed higher and higher, Alison McGregor’s view just got better and better. With no sides to it, the aircraft gave the perfect vantage point to look out over St Andrews and the wider Fife coastline. And then she jumped out of the plane. “It was amazing,” remembers McGregor, who was one of 19 women and one man who threw themselves from a skydiving aircraft as part of the Booby Birds campaign to raise money for breast cancer charities. The jump was the brainchild of Tina Korup whose friend Christine Tulloch was diagnosed with breast cancer. Korup asked 20 high-profile Scots to take part and each ‘bird’ committed to raising £20,000. Their fundraising efforts won the backing of entrepreneur Sir Tom Hunter, former First Minister Jack McConnell and pop singer Kylie Minogue, who signed a T-shirt for a charity auction. They smashed their target, raising £421,752 between them. “Skydiving isn’t a regular thing for me,” McGregor laughs. “When I was approached to do it, my immediate reaction was ‘No, I don’t want to jump out of a plane’. My husband and my son laughed when I told them that I’d been asked to do it, which got me going a bit. But what swung it for me was the statistics around the number of women who are diagnosed with breast cancer and who die from breast cancer. I felt I didn’t have an excuse not to do it. “So I signed up to do it and then suddenly realised I had to raise £20,000. But the great thing about the Booby Birds was that I got to meet women from all different walks of life. I don’t think I would do it again for sponsorship, because I’m not great at asking people for money, although I’ve carried on supporting fundraising through being a non-executive director at the Beatson Cancer Charity. But I would definitely do a sky dive again. Once you get over the initial tumble and get into a steady state, it was absolutely fantastic. It was scary but I’m so glad I did it.”

“When I was approached to do it, my immediate reaction was ‘No, I don’t want to jump out of a plane’”

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Leading by example is a theme that’s run throughout McGregor’s career – and has propelled her to her present role as chief executive of HSBC Scotland. Although the bank only has ten branches in Scotland, it still employs around 3,700 staff north of the Border. As well as the 200 or so members of staff who work in the branches, the company has a First Direct customer contact centre in Hamilton, where about 600 people are employed. Along with a second site in Leeds, the Hamilton base serves clients from throughout the UK. A further 1,000 staff work in HSBC’s main call centres in Edinburgh and Hamilton, while its information technology team in Stirling has around 350 staff. The final pieces of the jigsaw are the 800 people who work within the securities services business, which operates from sites at Edinburgh Park and Glasgow, and then the corporate and business banking teams. “It’s about having a range of jobs and opportunities,” says McGregor. “There is a variety of functions there, but one of the things I’m passionate about is bringing the leadership together to collaborate on career opportunities for people across those functions. That’s working really well and I think it’s really important that HSBC can become a provider of quality careers in Scotland and not just jobs within single streams.

“I think it’s really important that HSBC can become a provider of quality careers in Scotland and not just jobs within single streams”

“It’s interesting – we have 1,000 branches in the UK and only ten in Scotland,” McGregor points out. “When we started building our retail business in Scotland about seven years ago, we anticipated that we would need more than ten branches. But consumer behaviour has changed since then, with more people using internet banking and mobile phone apps.” According to figures from the Scottish Government, Scotland’s banking market continues to be dominated by Bank of Scotland and Royal Bank of Scotland, which between them control about 70% of small business accounts. The chasing pack is made up of challengers including Barclays, Clydesdale, HSBC, Santander and now TSB. What sets HSBC apart is its larger presence in the corporate banking sector. “We’ve been in corporate banking in Scotland for a number of years and we have a very high market share,” explains McGregor. “We have a significant market share among those global customers that see HSBC as a provider of global

solutions – so you might have a customer that banks with us in the UK and also banks with us in 20 different countries. The past ten years has seen us grow our business banking and commercial banking teams significantly, especially with our expansion in the small and mediumsized enterprise (SME) space. The SME loan book has grown quite rapidly – 20% year-on-year – and even through the downturn we continued to see growth in that business. It’s an exciting space for us.” Last year HSBC unveiled a £300m fund for loans to small businesses, divided equally between the East, North and West of Scotland. This year the fund has been expanded to £400m Scotland-wide, as part of an £8bn SME push throughout the UK as whole. McGregor adds. “It’s very difficult to calculate your market share accurately. But it’s fairly obvious that we have an opportunity to continue growing our business in Scotland. I’m less fixated on growing market share than I am on growing the economy. It’s about supporting businesses to support the

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growth of the economy. I’m a board member of Scottish Enterprise and I’m about to step up from being deputy chair of CBI Scotland to become chair and the reason for taking on both those roles is my interest in supporting the growth of the economy.” Speak to many small businesses in Scotland and they will tell you that they still can’t get finance at affordable rates. Yet turn to the banks and the story is about them approving more and more loans and overdrafts. McGregor recognises the issue through wearing all of her HSBC, CBI Scotland and Scottish Enterprise hats. “From an HSBC point of view, we’re seeing growth in our SME business,” says McGregor. “I host lunches for groups of customers and I do that to give them the opportunity to feedback to me as CEO and for me to tell them about our business, as well as for them to connect with each other. The feedback I’m getting is that SME funding isn’t an issue. “However, I know from my other roles that 13% of Scottish businesses have said they would like more funding but haven’t gone ahead and applied for it, while 12% have been offered funding but have not taken it. Over the past few years there has been a lack of confidence in some business quarters. People have been more cautious and have paid down more debt. But from a purely HSBC point-of-view and given our rate of growth, you’d be inclined to say that’s not what we’re seeing. “What I’m hearing from our customers is that they’re feeling confident and that the economy is improving, so they’re planning to expand and grow. We’ve been running access to finance workshops in conjunction with launching our SME fund because one of the things I’ve discussed with external stakeholders is whether the lack of confidence issue is down to perception – do they think they won’t get funding if they apply for it?” One of the ways in which McGregor believes she can help businesses to grow the economy is through stimulating exports. HSBC operates in 71 countries and part of its advertising drive has been about helping small businesses to tap overseas markets. “It’s our network that provides the opportunity,” McGregor explains. “For example, I met with a client yesterday who is already in China but is looking to do more in China. One of his directors is out there right now, so I came away from the meeting and contacted one of our guys in Shanghai who is a specialist in our client’s area and I’ve arranged for them to

“I’m less fixated on growing market share than I am on growing the economy. It’s about supporting businesses to support the growth of the economy”

meet later this week to talk about how HSBC can help them in that particular network. “Whether a company is small or medium-tolarge, it’s about understanding the journey that the company is on and what’s stopping them from getting there. Sometimes it’s uncertainty about the market, sometimes it’s uncertainty about whether people out there would actually use their product. What we do is facilitate discussions. I feel we do have a role to play in supporting companies in Scotland to connect with the territories where there are opportunities. “At a personal level, I do that as part of my day job. So, for example, over the past four weeks, I’ve met 50 HSBC customers. The question I always ask them is ‘How can we help you outside banking?’ Sometimes that will involve introducing them to people outside the UK and sometimes it will be introducing them to people within the UK.” Building those relationships with clients has formed a large part of McGregor’s career. After completing her banking apprenticeship with Bank of Scotland, she joined Barclays where she spent the bulk of her career, rising through the ranks to become head of corporate and commercial banking and deputy managing director in Scotland. In between Barclays and HSBC, McGregor also spent three years with National Australia Bank as first its regional director in the North for corporate and structured finance and then as its UK divisional director for corporate structured and acquisition finance, roles that took her throughout the UK. She joined HSBC in March 2013 as director of corporate banking for the north – which included Scotland, the Midlands, the North East and North West of England, and Yorkshire – before quickly gaining the title of ‘CEO Scotland’ in preparation for the run-up to the independence referendum in September 2014. Now her time is dedicated 100% to the role of CEO Scotland, which includes interacting with civic society, through the Scottish Government and Scottish Parliament but also through business organisations like the CBI and others.

For McGregor, it all comes back to the theme of leadership, it was thrust on McGregor at an early age under tragic circumstances. “I’m from Clydebank and the plan was always for me to go to university to study accountancy but when I was 15 my father died,” she explains. “My mum and I both went out to work so we could support my two younger brothers. I was very lucky because I went to work for the Bank of Scotland at its Scotstoun branch, which was very supportive when it came to my academic career. “I went to night school for three nights a week for the first two years and then I did my banking degree. So I got there at the same time as everyone else, just with a bit more money in my pocket and a bit more experience – not that I would recommend it. After I finished my training, the Bank of Scotland wanted to keep me in Scotstoun but I got a ‘big job’ in the city and went to work for Barclays in Glasgow.” Whether it was going out to work to support her family from the age of 15 or jumping out of a plane for charity, McGregor has certainly mastered her leadership skills. “The role of a leader is to inspire,” she says. “Inspirational leaders create confident followers and confident followers just do the right thing. Confident followers will put their hands up if something’s not right, confident followers will put their head above the parapet, confident followers will do the right thing for their customers. If you have confident followers then you have a less risky, more profitable, more diverse business. In developing confident followers you are going to get people who want to be with your organisation. Over the years, I kept thinking ‘There’s something in this leadership thing’. One of my old bosses used to say to me ‘You’re doing my head in with all this talk of leadership, leadership’. I have a passion for it and he supported me to go to Harvard to do the executive leadership management programme. It was only a short course for a few weeks but it gave me time to really frame my thoughts. So I’m really passionate about the way we lead people and I see my job as being to inspire people at every level.” n

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Gunns and roses Beer brand Innis & Gunn has toasted sales success at home and abroad. Now chief executive Dougal Sharp tells Peter Ranscombe why his company is moving into the on-trade – and building its first brewery

As Dougal Sharp walks through his new Innis & Gunn beer kitchen on Edinburgh’s Lothian Road, he knows that he’s seeing the calm before the storm. It’s festival season and the city is packed. Despite having only been open for a few weeks, his bar has already been heaving during the busy summer season, with many customers coming along specifically to try his unpasteurised lager. “It’s the freshest pint in Scotland and people are going mad for it,” says Sharp, Innis & Gunn’s founder and chief executive. “We have been totally bowled over by how much people are loving it. The beer kitchen is a brilliant representation of our brand on the high street and it’s bringing our brand to life in such an exciting and vibrant way for drinkers.” It’s not the first time that Sharp has dipped his

toe into the on-trade. Back in 2012, Innis & Gunn teamed up with pub operator 56 North to open a ‘pop-up’ bar on Edinburgh’s Potterrow during the Fringe, testing demand to see if customers wanted a high street presence for the brand. The results were very positive, especially when the company’s beers were used to make some of the sauces and glazes for the food in the pop-up pub. Now the lessons learned from the 2012 pop-up have been put into practice with the new bar, which joins the ranks of BrewDog, the Hanging Bat and Ushers of Edinburgh in bringing craft beer to the masses in the city. Sharp’s ambitions don’t end with one bar though. “I can’t wait for the next one,” he says. “We’re already actively seeking other sites in Edinburgh and in other

places in Scotland.” It’s been a busy summer for Sharp and his team. Not only have they opened their first bar but they’ve also raised £3 million through a crowd lending scheme in order to fund the construction of the company’s first brewery. Fans of the firm’s beers and other investors have purchased ‘beer bonds’, a fixed-term mini bond that either pays 7.25% interest each year or the equivalent of 9% cent interest per annum in ‘beer bucks’, which can be used to buy beers from the company. “The response has been fantastic,” Sharp nods. “We ended up with 1,115 investors and we raised £3m in eight weeks, which is an outstanding result. We got a fifty-fifty split north and south of the Border and we’ve got a very pleasing spread of investors from £500 up to

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“The response has been fantastic,” Sharp nods. “We ended up with 1,115 investors and we raised £3m in eight weeks, which is an outstanding result”

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£100,000 from all over the UK. I came to the simple conclusion that if we were going to be paying interest to anybody then I would much rather be paying it to the people who love our brand and the beers we make rather than a bank.” Innis & Gunn had extended the deadline for applications by a month to push it up from £2.5m with 840 investors to the original aim of £3m. Now that the offer is closed, the company is working out the finer details of the plans for its brewery, drawing up the specifications for the equipment it will need and selecting the site, including running the rule over services such as gas, sewage and water. Sharp is preparing to unveil further details about the location of the brewery in the autumn, but he confirms it will be in the Edinburgh area and that it will be more than just a ‘pilot’ brewery where the company can experiment. Instead, he plans to build an 80,000 hectolitre (hl) per year plant, which would put it among the larger craft breweries in Scotland. “Much like a swan, it all appears very calm above the water but we’re paddling away below the surface,” Sharp explains. “There’s a lot of work going on to spec the brewery and negotiating with landowners. The new brewery is about building on the creative foundations of the business. Our fans always respond well when we

do special batches or new brews and the new brewery is very much about doing more of that stuff. It’s like my turbo-charged test kitchen – this is where the business will go to produce the small runs of difficult-to-produce beers that we can’t do in a big brewery. “It’s a sizeable investment and will have a sizeable capacity on the basis that our global business will continue to grow and the need for us to be innovative and be flexible will also continue to grow. We’ve got to plan for the future here. There’s no point in having a solution that’s right for today, it’s about building a solution that’s right for the next ten years.” Sharp was working as the head brewery and production director at the iconic red-brick Caledonian Brewery in Edinburgh when he was contacted by Speyside distiller William Grant & Sons, which wanted a beer that would add flavour to its barrels, allowing it to create its ale cask reserve whisky. Sharp spotted an opportunity not just to flavour the casks for the whisky but then to also sell the beer itself, which had taken on some of the vanilla and caramel flavours from the wooden barrels. Sharp – along with his brother, Neil – created Innis & Gunn as a joint venture with Grants in 2003, with the name for the business coming from Neil and Dougal’s middle names. In January 2008, Sharp led a management buyout and drew

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on the experience of his father, Russell, who is credited with saving the Caley Brewery in 1987 when he led a buyout from Vaux of Sunderland. In effect, Innis & Gunn’s brewery will be the third that Sharp has built. After cutting his teeth in the industry under the watchful eye of Alan Hay at Timothy Taylor – Sharp was drafted in to the Caley in 1994 to rebuild the brewery following a fire. A second fire meant he set about rebuilding the place again, eventually taking production from 30,000hl a year up to 160,000hl. And somewhere along the way he found time as head brewer to come up with the recipe for the Caley’s most famous product, Deuchars India pale ale (IPA), before leaving in 2002 to setup Innis & Gunn. “We won pretty much every prize there is to win in brewing, including the champion beer of Britain,” Sharp remembers. “I was lucky enough to be involved during the 1990s when cask beer was exploding in Scotland. People were moving

nearly £30m, with exports to 50 countries. The firm has won plaudits and courted controversy for its marketing tactics in equal measure, with recent stunts including driving a tank through the City of London and dropping taxidermy cats from a helicopter. BrewDog has also sold shares to fans, raising £5m in 20 days during its latest crowdfunding round as it aims to secure £25m to build a 300hl brewery. By comparison, Innis & Gunn’s most recent accounts showed sales up 15% to £11.8m, with a further increase expected in its next set of figures. The company’s beers have always been popular overseas, with around 80% of its production exported. The company has grown from just a handful of staff to 55 people, plus the workers in the new beer kitchen. While few would begrudge Sharp his success, several Scottish micro-brewers do grumble about the fact that Innis & Gunn hasn’t had its own brewery up until now. The company uses Tennent’s massive Wellpark brewery in Glasgow

“Much like a swan, it all appears very calm above the water but we’re paddling away below the surface,” Sharp explains. “There’s a lot of work going on to spec the brewery and negotiating with landowners”

away from their usual pint of ‘heavy’. Now craft beer isn’t just competing with other ales it’s competing with mainstream beers too.” Sharp doesn’t just have his mind set on the future of his own company though. On a dark night at the Scottish Parliament back in January, he launched The Brewers’ Association of Scotland (TBAS), a new trade body that he is chairing and which he and his fellow brewers hope will represent their industry to government. Innis & Gunn has teamed up with seven other breweries – Cairngorm, Fyne Ales, Harviestoun, Inveralmond, Stewart Brewing, West and Williams Bros – to launch TBAS. Figures from the Campaign for Real Ale (CAMRA) show that there are around 80 breweries in Scotland, but TBAS has been looking at how much beer they produce, how many people they employ and whether there’s the chance to share best practice. Given the success of the whisky industry in exporting Scotch, Sharp is confident that one day Scottish beers could also play a similar role on the

global stage. “It will take a long time to get there, but the creativity that Scotland’s brewers are showing – not just in the way they make their beers but also in their routes to market – is amazing,” Sharp enthuses. “For a little country like Scotland to be doing the things it’s doing in the beer sector is amazing. Innis & Gunn is known around the world – we’re building a global brand. And I know there are other companies in our sector that are doing the same thing. Don’t forget, this isn’t the United States we’re talking about here with a population of 320 million, this is Scotland with five million people and arguably you’ve got two highly-regarded global craft beer companies based in Scotland.” Sharp doesn’t name Ellonbased BrewDog as the other global craft beer company, but the similarities and differences between the two businesses makes for an interesting comparison. Founded by Martin Dickie and James Watt in 2007, BrewDog has grown to include a 100hl brewery, 27 bars and sales of

to make the majority of its beers, with some also having been brewed at Belhaven in Dunbar and at Marston’s south of the Border over the years. Are those muttered comments likely to go away once the doors to the new brewery swing open? “Ultimately, it’s up to the drinker to decide what beer they like and what beer they don’t,” replies a diplomatic Sharp. “From the outset we’ve consistently produced flavour-packed, interesting beers that drinkers want to drink. The new brewery will enable us to do even more of that. For the whole of the sector, the vibrant brewing scene in Scotland is awesome. We’ve got so many companies producing so much good beer. “If you look at the level of craft beer consumption in the UK then the two hotspots are London and Scotland. That is evidence of the vibrancy of our sector. Within that, you have some companies, like us, which are not just playing a big part on the Scottish craft brewing scene but also the international craft brewing scene. I think that’s amazing for Scotland.” n

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On the right track for the future PD Ports positions Teesport as the Northern gateway for containerised goods destined for the north of the UK ‘We are delighted to be working with PD Ports on this innovative and dynamic offering to the Intermodal market’ Les Morris, Head of Sales at DB Schenker Rail UK

Geoff Lippitt, PD Ports’ Business Development Director PD Ports’ vision for a fully joined up freight and logistics strategy took a big leap forward in March as the government pledged to back a truly multi-modal future for the UK freight sector. The recent Whitehall announcement regarding the establishment of Transport for the North (TfN) is a welcome commitment to the future of freight and logistics strategy across the proposed ‘Northern Powerhouse’. It is also particularly welcome for PD Ports as it reinforces the Company’s growth strategy to enhance Teesport’s transport infrastructure network and position the Port as the northern gateway for containerised goods destined for the north of the UK. PD Ports’ recent investments to further improve freight movements include an investment of £3M in Teesport’s new intermodal rail terminal that became fully operational in November 2014. This follows on from the £16.7M container terminal expansion in 2011. Promoting a more joined up and coherent approach to road and rail freight has long been a core principle of PD Ports, focusing on intelligent transport solutions for customers via its tried and tested portcentric logistics model. In simple terms portcentric logistics means bringing goods into the country closest to their final destination.

PD Ports recently collaborated with DB Schenker Rail UK in a completely new offering for the market, believed to be the first time that a port and rail freight operator have partnered to serve the Intermodal sector. From August 2015 DB Schenker Rail UK will run a direct daily containerised traffic service (Mon to Fri) from PD Ports base in Teesport to Mossend and Grangemouth in Scotland. Les Morris, Head of Sales at DB Schenker Rail UK, said: “We are delighted to be working with PD Ports on this innovative and dynamic offering to the Intermodal market. We have worked closely with PD Ports to bring this service to fruition which will transport goods directly from Teesport to Scotland. This is an excellent example of how logistics companies can come together to provide bespoke solutions for our customers.” For PD Ports this direct connection to Scotland is a major boost to the Company’s transport infrastructure network, with direct benefit to shipping lines and intermodal customers, the deal is a clear statement of intent for its continued investment in intermodal logistics, with rail a key priority. Having rail at the heart of a modern portcentric approach, not only does the ‘heavy lifting’ for distribution cross country, it also brings

measurable socio-environmental as well as economic benefits. The new rail terminal also operates services between Felixstowe and Southampton with rail freight provider, Freightliner. Opportunities for the establishment of further new routes to the Midlands and the North West are expected in line with market demand. Geoff Lippitt, PD Ports’ Business Development Director, says: “We have invested significantly in expanding the intermodal services available at the Port which enables us to provide a greater level of service options, as well as improving our portcentric capability for our customers. “There has been a significant amount of press coverage lately centred round a better connected north including greater use of our rail network and waterways to move goods around the country. Our facility at Teesport has the potential to further attract logistics activity to sites with efficient low cost transport networks and we will continue to work hard to see this come to fruition. “We will continue to put freight and logistics at the core of the PD Ports offering and look forward to ongoing government focus and backing for a more interconnected transport infrastructure continuing to support our vision,” concluded Mr Lippitt.

For more information call 01642 877000 email enquiries@pdports.co.uk, visit our website www.pdports.co.uk or follow us on twitter @pdports

EXECUTIVE MOTORING bqlive.co.uk

King of the castle With its jaw-dropping looks and stunning sound, the McLaren 650s supercar even turned heads in the majestic surroundings of Dundas Castle near Edinburgh THE throaty roar of the McLaren 650s echoed through the entrance hall of Dundas Castle as the powerful supercar growled onto the gravel drive. With the sun beating down on its metallic paintwork, the vehicle drew a series of admiring glances from drivers and non-drivers alike, marking it out as one of the most exciting performance cars on the road today. McLaren has a racing pedigree that stretches back to 1963, when Bruce McLaren founded his eponymous team. The crew entered Formula 1 in 1966 and won its first grand prix in Belgium just two years later. Since then, McLaren has gone on to win more than 180 F1 races and clinched 20 championships, with drivers of the calibre of David Coulthard, Lewis Hamilton, James Hunt and the legendary Ayrton Senna climbing behind the wheel. That racing heritage spilt out onto real-world roads in 1993 with the launch of the McLaren F1, an iconic road car that was built using the lessons learned on the track and the same carbon fibre technology that the team had been employing on the circuit since 1981. McLaren Automotive was launched in 2010 to develop further road cars, with the 12 and the P1 being joined last year by the enticing 650s. The fine history of the car echoes that of Dundas

Castle itself, where a keep was built in 1416 and the modern house took shape in 1818 to a design by architect William Burn. Following a career in industry with first the family’s textile firm, Coats, and later electronics giant Philips, Sir Jack Stewart-Clark – the present owner and a noted car enthusiast – inherited the castle in 1995 and set about restoring his family’s home, which now hosts events including weddings and corporate gatherings. Such a rich history made Dundas Castle the most fitting of settings for a day out in a supercar that tips the scales at 641 brake horse power and which has a top speed of 204 miles per hour. “You’re really seeing this McLaren at its best here in the sun at the castle.” says Norman Stirling from McLaren Glasgow, which organised the McLaren for the test day. So what did BQ Scotland’s driver make of it after taking the legend out for a spin? “It’s truly the most amazing car I have ever driven,” says Derek Stewart, managing partner at Uddingston-based SAM Wealth, after trying out the McLaren 650s. “I’d driven an SLR McLaren Mercedes on the Top Gear track at Dunsfold near Guildford in Surrey and there was no comparison with the McLaren – this was a super, supercar – it was unbelievable. “It’s very comfortable to sit in, unlike a lot of sports cars. You can drive it on ordinary roads and still have some fun with it in its ‘Normal’ setting. It’s almost like being in a computer game in terms of how quickly you come up on other slow-moving vehicles and how quickly you pass them. I was surprised by how comfortable and stable it is for a car with such power. The introduction to the controls lasted for only 30 seconds because it’s not complicated. “The rasp from the exhaust lets you know you’re in a supercar but without it being ‘thuggish’. I could have listened to it all day. It’s sex on wheels. My previous favourite car would have been the Ferrari Dino GT for its lines, but I think the lines on that McLaren are amazing. The attention to detail is just amazing.” n

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McLaren Glasgow Bothwell Road, Hamilton, South Lanarkshire, ML3 0AY T/+44 (0)1698 303777 www.glasgow.mclaren.com

Official fuel consumption figures in UK mpg (l/100km) for the McLaren Sports Series (3,799 (cc) petrol, 7-speed Seamless Shift dual clutch Gearbox (SSG): urban 17.2 (16.5), extra urban 38.4 (7.4), combined 26.6 (10.7). Official combined CO2 emissions: 249g/km. The efficiency figures quoted are derived from official NEDC test results, are provided for comparability purposes only, and might not reflect actual driving experience. Parkâ&#x20AC;&#x2122;s of Hamilton (Townhead Garage) Limited is an Appointed Representative of Parkâ&#x20AC;&#x2122;s of Hamilton (Holdings) Limited FRN 308476, of 14 Bothwell Road, Hamilton, ML3 0AY, which is authorised and regulated by the Financial Conduct Authority as a Credit Broker. We can introduce you to a limited number of lenders to assist with your purchase, who may remunerate us for introducing you to them. Retail customers only.

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Beauty and the beast BQ Scotland invited a group of business people to put two very different executive cars to the test – the Bentley Continental GT and the Maserati Ghibli Some cars become instant legends – as soon as it was launched, the Maserati Ghibli started turning heads, especially among fleet managers who had become fed-up with the standard choices of Audis, BMWs and Mercedes. Others have a strong heritage that makes any new model a must-see, with the Bentley Continental GT carving a place in the hearts of everyone from performance car enthusiasts through to successful entrepreneurs and even professional footballers. The Bentley Continental GT W12 Speed boasts a 12-cylinder, six-litre engine and two turbo chargers, while the Maserati Ghibli clocks in with a three-litre V6 and 20-inch Urano alloy wheels. So they’re both sporty and they’re both high-performance, but they’re two very different cars when they’re lined up side-by-side. What did our drivers make of these two impressive beasts? “I was a bit concerned about the fact that it was two tonnes of luxury,” laughs Stephen O’Neill, managing director at Newton Property Management in Glasgow after he stepped out of the Bentley. “It was beautiful – it just drifted along like a nimble, sure-footed sports car. I drove for 5,000 miles through Europe in my Porsche last summer, which was awesome, but it would have been even more awesome if I’d been driving that Bentley. The car I have is an easy drive, but that Bentley was magical drive – it’s like a racing magic carpet.” The Bentley also caught the eyes of both Roddy Mackay, a director at specialist outdoor clothing

and equipment retailer LD Mountain Centre, and Kulmeet Arora, or Bob to his friends, owner of Sachins and Peace & Loaf restaurants, who each came up from Newcastle for the event. “I got the feeling that you could use the Bentley all-day, every day for everything,” says Mackay, whose step-father, Keith Hall, was a racing driver for Lotus in the 1950s. “It’s comfortable, it’s luxurious and the Bentley heritage is there with the chrome finishes, the knobs, the buttons, and the dials. You still get that Bentley feel.” Arora, who applied to become a Top Gear presenter about eight years ago and got down to the final four candidates for the job that was eventually taken by James May, drives a Porsche Cayenne and Porsche Cayman. So how did the Bentley compare to his usual rides? “The Porsches are great cars but the main difference is that the Bentley is much more luxurious inside. The engine just sounds amazing as well. It’s a great car to drive, considering it’s a two tonne car. I’ve always had an interest in the appearance of cars, but perhaps not so much the mechanical side of things,” confesses Lesslie Young, chief executive at Epilepsy Scotland, whose driving history ranges from a grass green Ford Fiesta through Alfa Romeos, Daimlers and BMWs. “I love the sleek, elegant lines of a car. I’m not so interested in how it works as much as the results of how it works. Today is an absolute treat – I’ve always had a passion for a Bentley.

It exceeded my expectations. So luxurious and so good looking.” Then came the Maserati, and the drivers were queueing up to praise a car that delivered looks and performance at a price tag to suit many pockets. “This is a beautiful car that we have here today,” says David Quate, managing director at Strathclyde Park-based DSG Capital Finance which provides funding for businesses to buy assets such as prestige vehicles, trucks and vans, as well as directors looking to buy cars. “The Maserati is an interesting car, because it comes in at a starting price of £49,160” muses O’Neill. “To look at it and when you step inside it, you’d think it’s a £70,000 or £80,000 car. In relation to the equivalent cars I run in our office, this one is much more interesting. It has a sportiness and eagerness that you just don’t get in the slightly-tame Jaguars. It feels like a sports car that has five seats.” “It’s all about the design of the car – the grill, the beautiful lines, the fins, the air-intakes – it’s pleasing to the eye and exciting,” adds Martin Charles Gordon, who runs Glasgow-based Platinum Select Chauffeurs and who uses a Mercedes E250 AMG when driving his clients. “The car just reeks quality. The sound of the engine was beautiful. It’s a four-door saloon car yet it’s got the performance of a sports car. I’d certainly consider a car like a Maserati – it’s food for thought because it has that exclusivity, which is something I look for.” n

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DSG Capital Finance was established to provide a premium finance facility to the business community. The philosophy is quite simple. We endeavour to offer competitive rates coupled with first class service, which is precisely what you would expect when making the decision to finance an asset. Our parent company DSGFS have been experts in finance sector for over 25 years and are skilled at locating the best deal for our clients. David Quate said “With the uncertainty in the lending market we are seeing an increased number of SME’s and business owners coming to DSG Capital Finance direct. Whether they are looking to funding a critical business asset or just purchasing a new vehicle for themselves.

Our statistics have shown an increased number of business owners preferring to arrange the funding arrangements well ahead of making any purchase. Personally I think this is largely due to the client’s being more commercially minded and wanting to understand the options available before they make the decision to purchase”. David Quate Managing Director

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Our areas of expertise : Asset Finance Prestige Funding Cash Flow Finance DSG Financial Services (Scotland) Ltd can introduce you to a selected group of lenders who may be able to help you finance your purchase DSG Capital Finance is a trading style of DSGFS (Scotland) Ltd DSGFS (Scotland) Ltd is a credit broker and not a lender

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ENTREPRENEUR bqlive.co.uk

An appliance of science

Stewart White rescued parts of Angel Biotechnology from administration and then turned to the Alternative Investment Market for funding, as he tells Peter Ranscombe

Here’s a question – what links sausage skins with life science companies? More than meets the eye according to Stewart White, chief executive at Collagen Solutions. His Glasgow-based firm takes simple cow hides and tendons and extracts collagen, a protein that’s found in tissue throughout the human body and which can be used for a host of medical treatments, from bone grafts all the way through to delivering cutting-edge therapies like stem cells. When we meet at his head office, the rain is pounding the Nova Business Park at Robroyston in Glasgow, but the outlook appears bright for Collagen Solutions. It’s results day and White is taking calls from journalists about his full-year figures, which put the company on course to meet its goal of growing its value from around £20m at present to £100m by 2020. Rewind to February 2013 and the company couldn’t have had a more complicated birth. White had been acting chief executive at Angel Biotechnology, a life sciences business that was put into administration. White and David Evans – a serial biotech entrepreneur – set up a company called Collbio to save Angel’s manufacturing facility at Robroyston. They then completed a reverse takeover of a cash shell called Healthcare Investment Opportunities (HIO), of which Evans was chairman, and took on its listing on the Alternative Investment Market (AIM). Bringing Collbio and HIO together allowed the combined company to buy California-based peer Collagen Solutions. Even though White had only been with Angel for 15 months – first as commercial director before quickly stepping up to become the company’s acting chief executive – he was already very familiar with the Robroyston facility. Angel had bought the plant from the medical division of Devro, the Moodiesburn-based sausage skin maker where White had worked as technical operations manager. Meanwhile, the Californian operations of Devro’s medical division went on to become Collagen Solutions LLC, before eventually being reunited with

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the Scottish arm by White and Evans. Despite the Glasgow plant passing through several pairs of hands – from Devro to Angel and then on to Collbio and now Collagen Solutions – there has been an element of consistency running through its operations. The site is not only involved in producing collagen for its customers, but it also works with clients on research and development. “We always believed in the strategy,” explains White. “It’s the exact opposite of what a lot of people do – they spend £5m developing a device but don’t know whether the National Health Service actually wants to buy it. This is the antithesis of that. “There’s a business opportunity here. There are customers that use the facility and there’s the opportunity to grow. Being able to save the facility and bring it back together with the operations in California was great. Going through the process was intense and we had to go into so much detail for the reverse takeover. “David Evans’s belief in the strategy enabled us to initially rescue these assets. Without David’s leadership, commitment and belief, we wouldn’t be where we are today.” Evans is an experienced operator in the sector: he sold life sciences firm BBI Group for £84m in 2007 and Manchester-based diagnostics firm DXS for £80m in 2009; he’s also the chairman of Alva-based Omega Diagnostics and a former chief executive at Axis-Shield. White met Evans through the Scottish Lifesciences Association, a trade body run by Scott Johnstone and John A Brown. Scottish life science companies have come and gone from the stock market, with Angel falling into administration, Borders-based drugs developer ProStrakan being taken over by Japanese firm Kyowa Hakko Kirin, Dundee medical testing kit maker Axis Shield being swallowed by New York-listed Alere and Japanese camera giant Nikon snapping up Fife eye scanner maker Optos. White believes that listing your business on the stock exchange – and AIM in particular – can bring benefits for entrepreneurs. “The transparency and publicity that AIM brings are great advantages for a business,” White argues. “A lot of people think that being a publicly-listed company is onerous, and yes you

“There’s a business opportunity here. There are customers that use the facility and there’s the opportunity to grow. Being able to save the facility and bring it back together with the operations in California was great.”

do need to make a time commitment to it, but the access to the markets that it gives you and the feedback you get from institutional investors is fantastic, especially when it comes to honing your strategy. These are experienced life science investors who ask ‘Have you thought of this?’ or ‘Have you thought of that?’ so there’s a much wider spread of people giving you advice or offering you opportunities.” As well as the requirement to report to shareholders twice a year, the other criticism levelled at the stock market is the cost of raising money. Indeed, Collagen Solutions spent £1.4m in the year to 31 March 2015 on administrative expenses, including the cost of raising £5.4m in an over-subscribed share-placing so that it could buy New Zealand-based Southern Lights Biomaterials. “You have to try to get as much value into the company as you can from those fees that you pay,” White says. “It’s one of the costs of growth, but the benefit is that one can raise capital fairly quickly on AIM if an opportunity comes along.” Those investors seem to have latched on to the idea of collagen and what it can do. “Collagen makes up your tendons, your skins, your trachea, your eye – indeed bone is basically just calcified collagen,” explains White. “There are about 27 different types. Collagen has been used for decades in medical devices, so what we can do is take collagen and turn it into different forms for different applications. For example, we make collagen that our customers then turn into bone grafts.” White studied applied microbiology at the University of Strathclyde and completed his PhD there, with a view to entering academia. But it was during a night class for the university’s post-graduate certificate in entrepreneurship

that he was bitten by the business bug and changed direction, taking a job in Liverpool with American pharmaceuticals group Eli Lilly before returning to Scotland to join first BioReliance and later Devro Medical. “I sometimes make a flippant comment that I used to be a scientist,” says White. “But I don’t think you ever stop really being a scientist in the way that you approach things. I think that critical way of solving a problem always stays with you, along with the data analysis skills and the requirement to articulate a data-driven solution.” He adds: “One of the first questions our customers ask is where do we source our material from – the answer is cattle in Australia and New Zealand, which have very tight borders and don’t have BSE,” explains White. “They protect their supply chain very carefully. So the starting material is as safe as it can be for its type and then there are several levels of testing and safety over and above the safe location to ensure the material is safe for human use. Collagen Solutions’ current partnerships include work with University College London, via a licensing deal, to produce tissue that surgeons will be able to use within hours, rather than waiting weeks for it to grow. The company was also awarded a grant from Innovate UK – formerly the Technology Strategy Board – to work with the Electrospinning Company on a substance that can be used to help internal wounds to heal. “Working on research and development projects is partly about bringing in revenues now, but also about seeding opportunities for contract manufacturing in the future,” White adds. “Ultimately it’s not just about paying a dividend – it’s about making quality products that improve the lives of patients too.” n

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The Scottish Business Awards

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£80

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Per Person

Edinburgh

ll proceeds go to good causes

This is your invitation to Scotland’s leading business networking event, the Scottish Business Awards Festival of Entrepreneurship with Sir Chris Hoy. Sir Chris will address the leaders of over 200 of Scotland’s leading companies and deliver the inspiring story of how he became Britain’s greatest ever Olympian, explaining what it takes to achieve the ‘Mind-set of a Champion’ needed for success on the track and in the boardroom. The event will see an expert Entrepreneurial Panel chaired by Sir Tom Hunter with senior business leaders such as Hamid Guedroudj, David Sibbald and Chris van der Kuyl taking questions from an audience representing £100bn in turnover and 400,000 employees world-wide, making the Festival of Entrepreneurship the ideal platform to connect at the highest levels of Scottish Business.

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You will also be the first to witness the emergence of the next generation of Scottish entrepreneurs as the finalists of ScotEDGE’s competition present their pitches in a Dragon’s Den style for over £100,000 worth of funding for their business ideas. BQ readers can attend the event for £80 with all proceeds going to support our chosen charities this year which include the Social Bite Fund which helps tackle homelessness in Scotland, Not On Our Watch which helps prevent war crimes and human rights abuses in Sub-Saharan frica and the Scottish Edge Fund, meaning that your attendance is creating a virtuous cycle by directly supporting future generations of Scottish entrepreneurs. Special discounts for parties of four or over can also be arranged.

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To book your place at Scotlandâ&#x20AC;&#x2122;s leading gathering of entrepreneurs and business leaders visit: www.scottishbusinessawards.co.uk/foe

or contact Event Manager Alan Mahon on: 0131 220 8206 or a.mahon@capital-events.co.uk

27/08/2015 22:28

COMMERCIAL PROPERTY Jutexpo buoyed by carrier bag tax Reusable bag supplier Jutexpo has moved into new offices after benefiting from Scotland’s 5p carrier bag tax, which was introduced in October 2014. Scots are now using 147 million fewer carrier bags than they were before the tax was introduced, giving a boost to companies like Jutexpo, which designs, makes and prints jute bags for clients including Dobbie’s, Sainsbury’s and Tesco. The company has moved into UK Steel Enterprise’s (UKSE’s) managed workspace at Strathclyde Business Park. Sam Turner, compliance director at Jutexpo, said: “With the increase in business, we were looking

for a mid-size office and the set-up at UKSE’s business centre was the right size, fit and price. “Jutexpo will stay here indefinitely and as the company continues to grow, we look forward to moving into a bigger office on the premises.” Since UKSE started in 1975, 685 companies have used its office space in Lanarkshire.

Property market ‘nervy’ amid trio of risks Rising interest rates, Greece’s latest debt bailout and Britain’s looming European Union (EU) referendum present a trio of potential risks for the commercial property market, according to

IME hits £1m summer milestone IME, the commercial property agency setup by Iain Mercer, the son of former Hearts football club chairman Wallace Mercer, has notched up more than £1 million-worth of transactions during a busy summer. Sales completed by the company in Edinburgh have included a guest house at 67 Gilmore Place, a former restaurant at 13b Dundas Street and retail units at both 55 Bread Street and 63 Mayfield Road. Leases organised by the firm have included furniture specialist Sharps moving into its first outlet in the Scottish capital at 33 Morningside Road and a ten-year lease for start-up outfit Deadly Donuts at 21 Argyle Place. Mercer said: “IME is proving itself to be a versatile operator in the market, transacting a range of properties across Edinburgh. “Despite the traditional summer downturn, we’ve noticed an increase in activity with more and more people buying into the IME brand and our positivity.”

Bag men: Juxtepo is on the move

the latest report from consultancy firm Lambert Smith Hampton (LSH). Looking at the outlook for 2016, the firm’s UK Investment Transactions Bulletin warned: “The EU referendum, once pencilled in, is likely to be a nervy period for both UK and overseas investors. Even if the chance of a ‘Brexit’ vote is seen as relatively slim, the run-up may stymie investment activity and possibly cause prices to soften, just as Scotland’s referendum on its split with the UK demonstrated in 2014.” The comments came as LSH’s figures showed that investment in British commercial property reached £36bn during the first half of 2015, the second highest total on record. Across the UK, the amount invested reached £16.8bn during the second quarter, an increase of 33% year-on-year, despite volumes falling north of the Border. Eighteen deals were completed in Scotland during Q2 2015, down 24 during the same period last year, with the amount invested falling by 42% to £298m. Scotland’s average deal size dropped by 23% year-on-year to £16.6m, with the office and retail sectors continuing to prove popular with investors. Investment in Glasgow’s office market was a bright spot during the second quarter, with the city recording 18% of all deals outside with London, coming second only to Manchester.

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“EU referendum, once pencilled in, is likely to be a nervy period for both UK and overseas investors” Ewen White, director in capital markets with LSH in Glasgow, said: “Yields across all sectors in Scotland are at least 100 basis points softer than prices being achieved in England’s regional cities and, ironically, we have the strongest occupational market fundamentals we have seen for a number of years. “Consequently, Scotland continues to show excellent value for money which has been reflected in competitive closing dates when good quality stock comes to the market.” Some of the key deals in Scotland in the second quarter included: Moorfield Group’s £60m acquisition of 1-3 Atlantic Quay, Glasgow; M&G Real Estate’s purchase of the Ayr Centre for £35m; and Savills Investment Management’s acquisition of 71-77 Princes Street, Edinburgh for £24m.

Glasgow’s rents poised to rise Consultants at Cushman & Wakefield predict rents in Glasgow’s prime office market could hit £30 per square foot within the next 12 months thanks to three Grade A office buildings being completed. Fellow property firm Jones Lang LaSalle puts current city centre headline rates in Glasgow at £29.50/sq ft and agrees that prices are likely to rise. Cushman & Wakefield expects rising rents in Glasgow’s city centre will have a positive knock-on effect for Grade B office space, peripheral locations and out-of-town offices. The completion of Connect110ns on Queen Street, St Vincent Plaza and 1 West Regent Street took the amount of Grade A office space available in the city up to about 430,000sq ft, according to the firm’s Q2 2015 Glasgow Market Report, but demand is running at around 500,000sq ft. Andy Cunningham, a business space partner at Cushman & Wakefield, said: “Professional and business services, insurance, technology, media and telecommunications occupiers drove take up this quarter and, during the course of H2 further lettings will be announced. “But with demand outstripping supply, there’s going to be stiff competition for the space, a trend which the city hasn’t experienced for a number of years.” Cunningham pointed to the benefits for outlying areas, with Finnieston and City Park in the East End signing up call centre operator Webhelp and Exsel IT & Communication, and Hillington and Lanarkshire reporting their best performance since the first half of 2011. Twenty two deals were concluded in the second quarter, accounting for 94,091sq ft, up from 64,534sq ft for Q2 2014. The largest letting was to Teleperformance, which leased 27,522sq ft at Cuprum, 480 Argyle Street. Twenty nine deals took place in the out-of-town market, totalling 86,833sq ft, up from 65,252sq ft in Q2 2014.

Carling & Co aims for 1,000 properties

Double deal for Eliburn Gladman Developments has sealed deals with Knightsridge Garage Services and toy supplier Marionville Models, which have both moved into its terraces of starter units at Eliburn Industrial Park in Livingston. Marionville Models, which has been supplying radio controlled models from its shop in Edinburgh for more than 40 years, has moved from its current premises on Turnhouse Road, signing a ten-year lease for 1,141sq ft in Unit Two. Family-run Knightsridge Garage Services, which has been operating for around 20 years, has relocated from Knightsridge Industrial Estate, signing a ten-year lease for 2,374sq ft in Units Four and Five. Susan Pegg, land director at Gladman Developments, said: “The moves by Marionville and Knightsridge come on the back of Eliburn Industrial’s park’s first letting by Shine Cleaning Solutions. “Given that Eliburn is the first speculative development in Livingston for a number of years, it’s clear that there is good demand for high quality and affordable industrial property within West Lothian.”

A husband-and-wife team is well on its way to owning 1,000 properties within the next five years after sealing a £1m deal. Graeme and Leanne Carling, who run Dundee-based property development and investment group Carling & Co, have bought ten one- and twobedroom properties in Dundee and the former Chance Inn at Inverkeilor in Angus, which they plan to turn into a further seven homes. Carling & Co bought the properties from the administrators for Top Rowan Developments, which collapsed two years ago, taking its total estate to more than 200 properties. Graeme said: “Access to affordable housing is particularly difficult for young families, those on low incomes and first time buyers. “The work of private companies like Carling & Co is invaluable in helping to improve the housing situation. We are very aware that there is an affordable housing shortage in many areas of Scotland and we are doing our bit to help improve the situation by providing affordable housing solutions in the Dundee area.”

“Access to affordable housing is particularly difficult”

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Story of the colonies Interserve and Tiger Developments, the companies behind the landmark £200 million Haymarket regeneration in Edinburgh, have teamed up with Dalry Colonies Residents’ Association to tell the story of life in the colonies, the rows of terraced houses that sit next to the site. The developers plan to erect hoarding around their site to explain about the history of the colonies, which date back to the late 1860s, and life in the area today. Construction work is getting underway on the site – which has planning permission for 40,000sq ft of offices, 60,000sq ft of commercial and leisure space, a 165-bedroom hotel and a 320-space underground car park – with phase one expected to be completed in the spring of 2017. Barbie Lyon from the Dalry Colonies Residents’ Association said: “We are looking forward to working with our new neighbours to explore how we can benefit from the development, which will change the landscape of the area. It was a very enjoyable meeting, which uncovered a number of hidden gems about the Colonies.”

Loan deal helps volunteer hub

Inward investors need 9m sq ft

Unity Trust Bank and Big Issue Invest Scotland have joined forces to help Volunteer Centre Edinburgh buy a ‘hub’ for its activities at 222 Leith Walk. The charity, which helps 30,000 volunteers each year gain work experience, will occupy two floors of the building and rent out a third floor. Unity Trust Bank provided 70% of the mortgage, while Big Issue Invest Scotland – the social investment arm of the Big Issue magazine group – provided the remaining finance. Harriet Eadie, chief executive at Volunteer Centre Edinburgh, said: “We recruit and place one in four of all volunteers in Edinburgh. It’s really exciting to now be a shop front presence in the heart of Edinburgh and we’ve already seen an increase in drop-in enquiries. This would certainly not have been achieved without the continual support of Unity Trust Bank, both in offering us a competitive loan and introducing us to the partnership with Big Issue Invest Scotland.”

SCOTLAND needs to replace or refurbish 6.1 million square feet of industrial space and a further 2.9m sq ft of office space if it wants to continue attracting inward investment, according to a report from the Scottish Property Federation (SPF). The trade body said that such large facilities need to be put in place to make sure that none of the country’s industrial or office space is older than 30 years. As well as attracting investors, creating the extra space will help native companies to expand. Just £4bn of investment-grade office stock is available in Scotland, the report said, compared with £13bn of retail stock, highlighting Edinburgh and Glasgow’s importance as shopping destinations and eclipsing other parts of the UK. The SPF said that the current shortfall in space would equate to 11,500 jobs in the industrial sector and 6,500 roles in the office sector if all of the refurbished or replaced facilities were used. The report,

calculated that the commercial property industry created 60,872 jobs in 2013 and contributed just under £6bn to the Scottish economy. Scotland’s commercial property stock was worth a total of £43bn in 2013, the report said, down from a peak of £51bn in 2005. David Melhuish, director of the SPF, said: “Scotland’s commercial property industry is not only a major asset for Scotland, contributing some £6bn a year to the economy, but it also attracts inward investment. Seven out of the ten largest commercial property transactions in 2013 involved overseas investors and were worth a combined £1.8bn. The totals for 2014 and 2015 are expected to be even higher following a rush of deals, including the blockbuster sale of Scottish Widows’ Port Hamilton head office to an unnamed overseas investor for £105m. Melhuish added: “It is clear that attracting inward investment and funding is going to be an important part of Scotland’s economic landscape over the coming years and, although the commercial property market has already attracted significant overseas interest, we need to ensure that we have a competitive business environment to retain and build this investment.

Five firms get into Stepps Catalyst Capital’s Buchanan Park in Stepps has chalked up its fifth deal of the year. Management services company Sodexo is taking 2,244sq ft on the third floor of Buchanan Park Tower in a deal brokered by commercial property agency Lambert Smith Hampton. The deal follows four agreements concluded by McNicol Property Consultants involving building contractor MIZ Consultancy, engineering consultancy CJT Utilities, Simply Mobility and Jasmine Designs Collection. The five deals take the total amount of space occupied at Buchanan Park past the 4,100sq ft mark. Scott McNicol from McNicol Property Consultants said: “There has been steady and continued interest in Buchanan Park, as reflected by these recent lettings.” Aasia Mohammad, associate director of business space at LSH, added: “The excellent refurbishment and strong transport links to Buchanan Park, along with highly competitive rates has seen it become an attractive option for many businesses.”

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BUSINESS LUNCH bqlive.co.uk

Investment is on the menu As head of the Scottish Investment Bank, Kerry Sharp provides the fuel for many of the country’s growing companies. Peter Ranscombe hears how the bank may now end up with more on its plate Kerry Sharp steps into La Bonne Auberge with her trademark grin. As she slides into one of the cushioned seats by the window to enjoy the Glasgow sunshine, her arms start to wave as she launches into a story about the latest progress at the Scottish Investment Bank (SIB), the investment arm of economic development agency Scottish Enterprise. With the smile and gesticulations, Sharp is immediately engaging – but that isn’t always the case. “We recorded a video for YouTube recently, with me talking about the help that the SIB can offer to businesses,” Sharp explains. “Normally I’m all smiles and arms going, but as soon as they started recording I couldn’t do it,” she exclaims, her face going deadpan and her hands dropping down to the table to emphasise her point. “I felt sorry for the poor camera crew – ‘Kerry, can you smile please?’ they’d ask or ‘Kerry, can you just use your hand?’ but all of a sudden I couldn’t.” Sharp doesn’t hit any similar problems as lunch progresses, as she enthuses about the changes being made to the SIB’s funds, which help to bridge the equity gap by providing match funding, with the bank investing alongside private sector players. The-then First Minister,

Alex Salmond, unveiled his vision for the SIB in 2009 but when the organisation was launched the following year it came under fire for being just a redressed version of three funds that Scottish Enterprise was already running – the Scottish Seed Fund, the Scottish Co-investment Fund and the Scottish Venture Fund, which all provided funding to fast-growing businesses in return for an equity stake. Since then, Sharp and her team have been busy putting flesh on the bones. Within a year of its launch, the SIB unveiled the £113m Scottish Loan Fund, which is run by Glasgowbased Maven Capital Partners and which offers mezzanine loans of between £250,000 and £5m. The bank also invested in a £47.5m venture capital fund for life science companies launched by Rock Spring Ventures – the investment vehicle run by Sinclair Dunlop, which has since changed its name to Epidarex Capital – and began managing the Scottish Government’s £103m renewable energy investment fund. Sharp became head of the SIB in 2013, having been its acting head for the previous year. When she took over the role on a permanent basis, one of her mantras was about helping

companies to get “investment ready”. She didn’t want to just invest money into companies but also wanted to make sure that businesses were ready to attract finance, ensuring they could articulate why they needed the cash and what they would do with it. Since it was launched, her financial readiness team has worked with around 400 firms. Her aim of helping companies to get ready for investment was born out of experience. After studying accountancy at Glasgow Caledonian University, Sharp joined Bank of Scotland’s graduate trainee programme and spent six years learning about banking, from business and corporate through to structured finance and mergers and acquisitions. She then spent a further four years at 3i, the London-listed private equity investor, before joining Scottish Enterprise in 2006 and setting up its portfolio management function, keeping an eye on the companies in which the agency had invested the public’s money. “3i used to invest in a lot of the type of companies that Scottish Enterprise now backs,” Sharp explains. “Then 3i changed its focus and began doing bigger and bigger deals, moving

BUSINESS LUNCH bqlive.co.uk

“All of the investments will continue to be made on commercial terms”

away from the smaller and medium-sized companies. So Scottish Enterprise stepped in to help fill the equity gap that had opened up, below about £2m.” Such investments are reaping dividends. Independent research showed that Scottish firms raised £242m of early-stage investment in 2014, compared with £116m only two years earlier. Helping to fill that funding gap has been one of the highlights of Sharp’s time with the SIB so far, and she highlights two successful companies in particular. “Over the past year there have been two really major investment rounds for two of the companies we’ve supported since their inception,” she says. “One of them was FanDuel, which raised US$275m (£176m),

which was one of the biggest deals in Europe and the biggest recorded deal in the UK for 18 years. The other was Nucana Biomed, which raised US$57m (£34m) to fund research into anti-cancer drugs.” The SIB is now simplifying its funds to make them easier for companies and investors to understand. The seed and venture funds are being merged with the little-known Scottish Portfolio Fund, a pot of money that rarely made it into the headlines but which was used to make follow-on investments in companies where Scottish Enterprise already held a stake. The three schemes are being rolled into a newly-rebranded Scottish Venture Fund, which will invest between £10,000 and £2m in match

funding. The Scottish Co-investment Fund will continue to back companies alongside business angels, syndicates and other investment groups that have been accredited as partners. The co-investment fund is having its remit extended though, with the smallest cash injections now starting at £10,000 instead of £250,000 and continuing up to £1m. “All of the investments will continue to be made on commercial terms,” Sharp insists. “This is the public’s money and so we need to invest it wisely. We are investing alongside partners and we are providing match funding to help bridge gaps that other investors can’t plug.” As well as streamlining its existing funds, further changes could also be on the way at the SIB.

BUSINESS LUNCH bqlive.co.uk

Last November, [2014] First Minister Nicola Sturgeon told the Scottish Parliament that she would be establishing a Scottish Business Development Bank, an idea that was first mooted in 2013. Could the SIB have a role to play in offering debt alongside its equity investments? “There’s an ongoing concern about a lack of access to debt funding in the market as well as long term and new equity gaps such as those I mentioned earlier,” Sharp says. “Banks are lending money but there are still a lot of businesses that are concerned that they don’t meet the banks’ criteria, particularly early-stage companies, those that are high growth and those that do not have sufficient security available. “So, alongside Scottish Government colleagues, we’re looking at what more can be done and recent announcements have confirmed the government’s commitment to continue to support investment for growth and in establishing a Scottish Business Development Bank to secure increased funds to invest into Scottish companies. Up until now, SIB has played a role mainly in the equity space but with the need for more diversity and continued challenges faced by companies seeking to raise debt, we’re thinking about whether there’s something we can do in the debt space as well. Crowd-lending is an interesting area that we’re looking at closely, as well as increasing our focus on direct support to companies in their fund raising.” While the Scottish Government continues to look at the debt market for small companies, the SIB is already helping businesses in Aberdeen to tackle one of the other major economic themes running through the past year – the drop in the price of oil. “Aberdeen wasn’t an area where a lot of companies were getting in contact with the SIB before because they didn’t need to – there was no funding gap for them,” Sharp says. “But since the oil price has fallen, we’ve had more and more companies coming to us to find out how we can help them. For some, it’s about helping to get them ready to take on investment, while for others it’s about helping them to apply to our investment funds. We’ve responded to that increased demand by appointing a further member of staff in Aberdeen.” The SIB is also working closely with other parts

of Scottish Enterprise to bring more companies into its pipeline. Many of the fledgling firms working with the agency’s high-growth ventures team and the high-growth start-up unit could become the next generation of businesses that apply for funding from the SIB. Programmes being run to help companies include Start Global, which offers four months of intense training for technology start-ups and firms from other sectors to help get them ready for pitching and for investment. When not operating in the world of high finance, Sharp is getting ready to take on another challenge – a triathlon. “It sounds very impressive when you tell people that you’re doing a triathlon, but less impressive when you tell them that you’re doing it as part of a relay,” she laughs. “I’m going to be doing the cycling leg of the race, which is about 12 kilometres. Travelling, whether on two wheels or four, plays a big role in Sharp’s job. When she’s not working from her local Scottish Enterprise office in Kilmarnock, she divides her time between the agency’s sites in Glasgow and Edinburgh, and increasingly finds herself in London to have conversations with other players in the private equity and venture capital spaces. “A large part of the SIB’s remit is to attract international investment to Scotland,” Sharp explains. “We’re making inroads into the equity gap below £2m, which remains with us, but there’s now also a second equity gap opening up between about £2m and £5m. Scottish companies are well catered for above £5m by private equity firms and organisations like the Business Growth Fund, which has a lot of money to invest. But if we’re going to plug that gap between £2m and £5m then part of that has to come through attracting new investors to Scotland. I can see us having a permanent member of staff in London soon to help with those conversations.” But when it boils down to it, how can the SIB and other public agencies attract foreign investors to Scotland? “It’s a long process, but it begins with those conversations,” Sharp replies. “It’s about having an investor like us that knows the local market and can invest alongside new entrants. That’s one of the reasons why we’ve streamlined the Scottish Venture Fund, to make it more attractive to international investors. We need a diversity of supply – we need a variety of funds available to our companies to support their growth ambitions.” n

“But since the oil price has fallen, we’ve had more and more companies coming to us to find out how we can help them”

BUSINESS LUNCH bqlive.co.uk

HEANEY ON WINE bqlive.co.uk

“CodeClan is the most exciting project I have ever been involved in”

HEANEY ON WINE bqlive.co.uk

Socialising with some Italians Rebecca Heaney, who is part of the setup team for CodeClan, Scotland’s first digital skills academy, shares tales of wine from university, from Burgundy and from the royal household For me, one of the most enjoyable aspects of wine is its social side – opening a nice bottle with friends over a relaxing meal. That sharing stems from the first times that I really tried wine properly, which was while I was an international relations student at the University of St Andrews. St Andrews is a small university and so our social life revolved around going to each other’s houses for dinner and enjoying a bottle or two of wine. It wasn’t snobby – as students we didn’t have much money. We weren’t drinking French wines either – it was Rioja and other decent earthy Spanish wines. We’d go to Luvians bottle shop to choose the wine if we had a special occasion – otherwise it was down to what was then William Low’s and is now Tesco – we weren’t always buying the cheapest, rankest wine. After university, I joined the royal household as a marketing assistant at St James’s Palace in London. This was in the days before

HEANEY ON WINE bqlive.co.uk

Buckingham Palace was opened up to the public and just as they became really hot on marketing. Unfortunately I didn’t come into contact with the wine cellar at St James’s Palace though. In those days, they had quite a hierarchical system and so if you were a senior member of staff then you got waitress service at lunch – and I think you may have even been served a glass of wine with your meal. At my level, it was just the staff canteen sadly, but the food was good. Over the years I have been lucky enough to come into contact with some amazing wine collections. My eldest son’s godfather is James Thomson, the owner of the Prestonfield House hotel and The Witchery restaurant in Edinburgh. He has a fantastic cellar and is passionate about wine and food and I’ve been lucky enough to go on a couple of wine trips with him to some amazing places that I wouldn’t otherwise have had the chance to do. I’ve also bought some wine with him and Alastair Boogert from the Hospice de Beaune auction in Burgundy, which is almost a rite of passage for wine buffs. That was after the gastronomic trip we took about ten years ago. Six friends including James visited Albert Bichot’s chateau and went to Dijon, then Beaune and ended up in Lyon – I couldn’t touch any wine or food after that trip. We had lunch at Bichot’s family chateau because he’s a friend of James,

and we drank wine that you couldn’t buy. It was incredible. My interest in people has served me well over the years, especially while I was managing director of digital agency RAPP Scotland and now as I’m part of the start-up team of CodeClan, which will help to fill the skills gap in the digital industries by training programmers from scratch. It’s the most exciting project I have ever been involved in. Being a sociable person also meant that I wanted to share the wines I was asked to review, and the timing just happened to coincide with a BBQ we were having with thirty friends and family. The Tenuta di Corte Giacobbe Soave was an ideal white wine for a warm summer’s evening. It was light and citrusy and paired well with grilled fish, although perhaps it lacked some complexity and was a little too simple. The Le Miccine Chianti Classico on the other hand was a big hit across the board, displaying plenty of earthy, leathery and tobacco flavours while still remaining smooth. It didn’t give much away on the nose but it made up for it on the palate. We were having steak and chicken at the BBQ and I felt the Chianti was a perfect accompaniment for the red meat. n Rebecca Heaney is setting up CodeClan, Scotland’s first dedicated digital skills academy, which launches in October. Find out more at www.codeclan.com

Thanks to Rodney Doig at WoodWinters, 2 Henderson Street, Bridge of Allan, and 91 Newington Road, Edinburgh, for supplying the Soave (£10) and the Chianti (£14.50). And thanks to Alex and Jane Nicol from Edinburgh Gin for opening Heads & Tails Bar, 1a Rutland Place, Edinburgh, for the photography.

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Microsoft’s Chief Envisioning Ofﬁcer to inspire British business leaders at MADE 2015

Dave Coplin, the Chief Envisioning Officer of Microsoft UK, is delivering a masterclass at MADE, the UK’s largest festival of entrepreneurship to provide business leaders with an insight into ‘the future of technology in business.’ We often hear that technology is making work easier and more efficient, but we also hear of the stress, depression and anxiety it sometimes brings to employees. Could the way we use technology be the solution to this? Coplin’s masterclass will address these issues and explore how the rapidly rising volume of information is affecting business and the lives of employees. In particular, Coplin will discuss how small businesses could in fact increase their productivity by using technology in the right way and removing the stresses that can be caused by technology not working for the user. As well as working as Microsoft’s Chief Envisioning Officer, Coplin is also a successful author. His first book: “Business Reimagined”, provides a view of a new working environment based on collaborative and flexible working. His latest book however, “The Rise of the

Humans” provides a further call to action, for both individuals and organisations to harness not hate the digital deluge, to rise up and take back control of the potential that technology offers society. The topics covered in both books will also be discussed during Coplin’s masterclass at the festival, as he speaks in front of around 2,000 budding entrepreneurs and successful business leaders. Speaking about his masterclass, Coplin said: “The success of our future depends entirely on our ability to grasp the potential that technology offers us. As a result, our aspiration should be to do things differently, not the same things slightly better.” The masterclass will look at the problems that face business leaders and the mistakes and assumptions made and how people should be using technology to reimagine how we live, work and do business. As a self-confessed technology “alchemist”, Coplin is passionate about turning the base metal of technology into valuable assets that effect the way people live, learn, work and play and in so doing, move the focus from the technology itself to the actual outcome. Prior to joining Microsoft, he spent 13 years delivering IT strategy and solutions within

the Professional Services industry in the UK, Canada and the Netherlands, helping to build the foundations of a global IT infrastructure. He is also a regular contributor to a range of media articles, conferences and forums all relating to the goal of making technology less “visible” and more valuable in our daily lives. Coplin will also be joined at MADE by former member of JLS turned farmer, JB Gill and multi-millionaire entrepreneur Annabel Karmel. MADE will also welcome Innocent Drinks’ Joe McEwan; Petra Wetzel of Scottish brewery West Beer; Jude Ower CEO of innovative, philanthropic gaming company Playmob and Checkatrade founder Kevin Byrne, amongst others. Tickets for the festival are now on sale with more events and speakers due to be announced over coming weeks. For up to date information and tickets visit www.madefestival.com or follow @MADEFestival on Twitter.

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MOTORING bqlive.co.uk

From bedroom wall to open road

PORSCHE PANAMERA Power: 310 hp 0-60: 6.3 seconds MPG: 33.2 Top Speed: 160mph CO2: 199 g/km Price: £86,850

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Aren’t Porsches meant to only have two doors? Scott Whyte, managing partner at Watermans Solicitors, discovers how Porsche retained its driving magic with the four-door Panamera

“Drive a Porsche for us?” they asked. “No problem,” I replied. I’m a kind-hearted soul like that. Things got a little confusing though when I learned that the model in question had four doors and a diesel engine. Ok, it’s a bit of an exaggeration, as the Panamera has now been out for a while and was preceded by other less-traditional Porsche models, like the Cayenne. Yet the word Porsche always has and always will generate the image of a two-door supercar on a bedroom wall for me. That’s not to say that a four-door Porsche possesses any less kerb appeal than the more

traditional body styles do. In fact, the exquisite sculpting of curves and fine lines that created the Panamera present a car that is both very easy on the eye and which lays a strong claim to the title of the must-have executive vehicle. That carries over into the interior, where you are met with a sophisticated and – relatively – easy-to-navigate driver’s console, which presents the mixture of features you would expect from a true driver’s car – suspension and chassis settings and the obligatory ‘sport’ button – with the must-have equipment of an executive mobile

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office. In particular, the in-dash map as part of the navigation system is a helpful feature. Front and back passengers benefit from a spacious cabin, zonal climate control and sumptuous leather â&#x20AC;&#x201C; although less vertically-challenged rear-seated passengers may find the head room a little restrictive. There is also a decent size of boot, further dispelling the childhood image of a Porsche formed in my head. On a turn of the key, the three-litre diesel engine purrs quietly awaiting further instruction. The unit has benefited from a re-tune in the past 12 months, with an almost 50 horsepower boost as a result. With the Panamera coming in at around two tonnes kerb weight, the driver experience certainly benefits from that extra grunt. The outset of my drive from Edinburgh Porsche faced the inevitable trundle through town and, while the engine doesnâ&#x20AC;&#x2122;t complain at the pedestrian speed of town traffic, you know that is not where it was made to be. The low speed does however allow you to gauge the views of admirers, who canâ&#x20AC;&#x2122;t help but pass a glance at the Panamera as it cruises past. This particular model looks striking in its red

paintwork, with optional dimmed headlight and privacy glass extras, and there is no doubt the car has real presence. Once clear of the city limits you get the feeling of the car starting to stretch itself and preparing to show you what it was made to do. With little encouragement from me, it paced out of town towards the Forth Road Bridge. I then followed the Fife coastal trail up to Burntisland, which gave me a chance to get a feel for the car on smaller roads. Although it is a big car both in weight and dimensions, Porsche has managed to achieve that balance between the security and comfort of you being in a car of this stature whilst still giving you an edginess to keep the smile on your face when driving it. Running at its most responsive in full sports mode, the acceleration and steering is sharp and the car sticks tightly to the road. Again the Panamera continued to draw its share of admiring glances, despite the natural beauty of the coastal road it was travelling on. Further into the trip, I took it along a stretch of motorway on the return to Edinburgh and that is, for me, where the car feels truly at home. As

much as it handles the twists and turns of the country road with complete ease, it is evident this machine was made to eat up the German Autobahn network and the comfort by which the miles pass while driving are testament to that. The ride remains luxurious even in full sport mode, with the additional comfort setting offering that added cushioning. It is a place that you would be more than happy to be if you needed to make a long journey, and I would suspect you may even make such a journey needlessly just as an excuse to be there. Despite its supercar looks and very responsive engine, the Panamera diesel is still able to compete as a real-world car in terms of its efficiency. Across the road test, it maintained a miles per gallon figure in the mid-30s, even in sport mode. That will probably explain why well over 75% of Panamera models sold in the UK are diesels, not to mention the fact that the diesel engine it is fitted with is really faultless in terms of the drive experience it delivers. My only quibble, and it is genuinely a minor one, is the insistence from Porsche that steering wheels should only be for steering,

MOTORING bqlive.co.uk

meaning that there are no volume control, phone-answering or other such buttons at your fingertips. That means that you have to use the centre console for most regularly-used functions – changing a music track, answering or making a call, and the like – which can be a little distracting and frustrating. This is all the more prevalent for someone like me who has short arms and the light touch of an ox, and I regularly found myself calling and cutting people off at the same time. It does however take you back to the fact that Porsche builds cars to be driven, and that the toys inside should not detract from the driving experience. Maybe it’s not a bad thing for us to sit back, enjoy the drive and deal with any calls when you get where you are going. That is of course if you ever want to stop driving this car. n Scott Whyte is the managing director at Watermans Solicitors in Leith. The car Scott was driving was a Porsche Panamera (£86,850) supplied by Porsche Centre Edinburgh, Fort Kinnaird, EH15 3HR, 0131 629 9183.

“Porsche has managed to achieve that balance between the security and comfort of you being in a car of this stature whilst still giving you an edginess to keep the smile on your face whilst driving it.”

FASHION bqlive.co.uk

Turning Japanese You can act your age with some timeless classics, explains Josh Sims In Japan, Nick Clements notes, they call it ‘dad’s style’. It has also been referred to as ‘revival’ style, or ‘heritage’ style. None of these terms sound especially complimentary, but they are apt summaries of what draws a man towards a particular clothing aesthetic - one, in fact, which has all the in-crowd knowingness of a sartorial sub-culture akin to that of Mod or Teddy Boy, albeit without the underpinning shared love of a certain type of music. Rather, what fans of heritage style are perhaps most drawn to is the authenticity that the many clothing brands and manufacturing companies which fall under this wide umbrella term are founded in, even if many of them have little authenticity in themselves, having been established over more recent years. But what they all at least aspire - even those that lack much history - is a respect for the menswear of the past, by which most probably mean after

the early 1900s and before the 1960s. This, after all, was the golden age of menswear, during which its canon was formed - all of those iconic garments that have come to form the basis of the entire men’s casual wardrobe, some of them originating in a single maker, all of them endlessly copied ever since. ‘Heritage’ says it all in its appreciation of both those brands and those styles of clothing that have a long past. But ‘dad’s style’? Clements is the founder and editor of ‘Men’s File’, arguably the leading journal of heritage and revival style, as likely to be found in the right kind of menswear store as in a newsagent’s. A photographer by trade, he began shooting this burgeoning sub-culture before it really had a name. But, as a middle-aged man, he liked what he saw. “There’s a reason why revival clothing is so appealing: it works, it’s so comfortable, and it’s not childish. That’s why

the Japanese call it ‘dad’s style’. It’s not being a 50-year-old dressed as a 15-year-old. It’s claiming an area of style that, thankfully, has nothing to do with fashion trends.” Indeed, heritage style looks to the past not only because, as its exponents will vouchsafe, the clothes are so timeless, operating at a level that is supra-fashion - some of the founding makers will be well-known to many, but many of the modern makers will be known to just the few - but because period designs tend to be highly functional, even excessively so given most 21st century men’s actual needs. “That’s a very male thing - we just love over-specced things that go on and on,” says Hitoshi Tsujimoto, the founder of Real McCoy’s, one of the most eminent of new heritage brands, specialising in both reproductions and gently improved versions of menswear classics. “We’re not really going to go

FASHION bqlive.co.uk

“There’s a reason why revival clothing is so appealing: it works, it’s so comfortable, and it’s not childish. That’s why the Japanese call it ‘dad’s style’”

down 300m under the water, even if our watches can. Professional cameras, four-wheel drive cars they’re all a bit of dreaming for men. Most of it is so tough, it will outlast us. Still, at least that way we’re making good presents for our sons one day. Well, it’s a good excuse anyway...” Tell-tale characteristics of heritage pieces might include a high prevalence of reinforced seams and pockets, for example, of easy fits - it is rare to find a pair of trousers, for instance, that is tight or has a low rise - and of hard-wearing fabrics the likes of leather, duck, chambray, cotton drill and, above all, denim. These are not only fabrics that one can live in, actively, without fear that they cannot take the abuse, they are

fabrics that actually get better the older they get. “The important thing is that this is not just a fashion to these people - often it’s a way of life,” notes Horst Friedrichs, a photographer who has won a reputation for his documentary approach to charting clothing culture, including denimheads. “You get a feeling for these cultures. Talk to stylists - by which I mean people who really style themselves - and they’re recognising something shared with others. And when you’re dealing with a community brought together by the love of a particular fabric, then of course you meet some very geeky people. Certainly one might say it’s odd to be obsessed with one fabric - there’s no music to go with it, no cars. But these

people absolutely love it, the colour, the craft...” The workmanship certainly is there in heritage style - not least because the market has, until recently, been driven by makers in Japan, with its culturally-ingrained focus on detail and, yes, authenticity, and its perhaps surprising postWorld War Two enthusiasm for Americana. But also because - especially with younger heritage brands - one standard they typically all work to is to ensure that their products are as well made as the historic originals to which they are paying homage. Those on the outside might wonder why anyone might pay what can seem an exorbitant amount for, say, a simple grey marl sweatshirt when, superficially at least, the same garment can be had for a fraction of the price. “Food is a good comparison here,” argues Roy Slaper, a leading figure among the breed of artisanal denim makers who have found their niche over the last decade. “To the person who survives on a diet of fast food, the discussion of organic or ethical food is abstract and suspect. He points to the hamburger he likes costing $3 and says only a fool would pay more. But you could get a $15 hamburger on the same street. And our jeans are the $15 hamburger. The machines I use are special. The methods I use are special. The materials I use are special. These aren’t even perceivable to the fastclothing customer.” That isn’t to say that, at the heart of heritage, there isn’t a love of dressing up. Quite the contrary. It is for this reason maybe that many of its fans truly are devoted, adhering to their style not only regardless of the changes of fashion, but also the changes of season. The heritage dresser who favours heavy denims, engineer’s boots, white cap-sleeved t-shirts and a biker jacket is likely to wear the same whatever the weather. There are limits to this appreciation for the old time feeling, “It’s why an old Rolex can just feel better than a new one, but you don’t want a pocket watch, why an old Mercedes has a certain essence to it, but you don’t want a horse and cart,” says Tsujimoto. And there is the risk of one’s wardrobe looking more akin to costume than to everyday, tough menswear. “You can overdo it. You become a pastiche of a pastiche of a pastiche,” as Clements warns. “There are times when I’ve looked like a lost extra from a period movie, which for some people is perhaps a way of saying ‘leave me alone’, even while attracting attention to yourself.” n

P U T R N A I T SBRITA UR

Edinburgh

O T N O

Aberdeen

StartUp Britain is the national enterprise campaign. It promotes entrepreneurship as a career choice, celebrates entrepreneurial activity across the country and provides guidance to help people start and grow their own business

Glasgow

In June, StartUp Britain embarked on its fourth summer bus tour promoting entrepreneurship in 28 town and city locations around the UK. With RBS, Sage, Start Up Loans Company and freelancing website Upwork as sponsors, the campaign took to the road in an iconic 1966 Routemaster. Borrowed from RBS, the bus was specially wrapped in a bold Union flag design to catch the eye of individuals on the high street and on the open road. Over the course of the tour, 300 advisers from 250 business support organisations were on board to offer free and impartial business advice to visitors. Guidance ranged from marketing, export and IP for established business owners, to the very earliest stage business formation steps for passers-by with a broad-brush idea for a start-up. The final leg of the tour took the bus through Scotland where it stopped in St Andrew Square, Edinburgh; Buchanan Street, Glasgow; City Square, Dundee; St Nicholas Street, Aberdeen, and the Inverness Business & Retail Park. It also paid a visit to RBS’s flagship HQ and business school at Gogarburn. Over a week, StartUp Britain engaged more than 1,000 aspiring or established Scottish entrepreneurs. Whatever the recent political climate, the

bus received as warm a welcome north of the Border as it did anywhere in the UK. “The Scottish leg of the tour was a resounding success - we found entrepreneurial spirit in abundance. Scots of all ages are launching businesses and they have a wonderful network of organisations available to help them, from Business Gateway and the Cultural Enterprise Ofﬁce, to the Prince’s Trust and Entrepreneurial Spark”, said campaign director Matt Smith. Jim Duffy, CEO of Glasgow-headquartered Entrepreneurial Spark who attended the tour’s launch in Downing Street said, “It’s great to see initiatives such as the StartUp Britain bus include so many Scottish locations. There has never been a better time in Scotland to start and scale a business”. And Chris Law, entrepreneur and SNP MP for Dundee West, famous for campaigning for Scottish independence in a 1950s Green Goddess, told the campaign team: “I think it’s tremendous to use a vehicle likes this as it brings people across who might not traditionally be attracted to what the tour is trying to do. As someone who has gone through the experience, there’s nothing like taking control of your destiny by starting your own business.”

ORFEAS BOTEAS

Chris Law visits Dundee

Orfeas is a sound engineer who studied in Crete and at Edinburgh University and has a longstanding interest in ﬁlm and video games sound design. For his ﬁnal Masters project, he developed a standalone vocal processor which turns speech into studio-quality monster sounds in real time. He offered the prototype online, then launched his product commercially as Dehumaniser. It has been used for a string of TV shows and to make the voice of Ultron in the latest Avengers movie. On top of his degree research, Orfeas did an internship for entrepreneurs at LAUNCH.ed, the innovation service of Edinburgh University’s commercialisation arm. The University invested in the company he established, Krotos Ltd. “We started from nothing” says Orfeas. “I got valuable advice for every hard decision I had to make.” To grow the company, he has developed a Dehumaniser App that can morph a user’s voice into presets including a Daemon and Dark Elf.

TRACEY EKER

Gogarburn

Returning to the jobs market, Tracey says she searched in vain for “genuine part-time opportunities” online. “Recruitment sites were hard to navigate or served up franchise adverts and lots of low quality jobs”, she says. To address this, she has set up the UK’s first specialist jobs site dedicated to all forms of flexible working. Flexiworkforce’s clients include RBS and Barclays, it is engaging collaboratively with other major employers and working alongside the Scottish government’s Fair Work Directorate. It has just secured £225,000 in its second funding round. Without the support of Entrepreneurial Spark, in whose Glasgow hatchery the company has been based since 2013, “I wouldn’t be able to get anywhere with this,” Tracey says. “You need corporates as a supply base, investment, a support network through mentors, help of other small businesses”. She hails Glasgow as “the first place to try anything new. You get help from everyone, you don’t have people kicking your ideas down”.

LOUISE HOOD & ASHLEY BLAKE

WWW.STARTUPBRITAIN.ORG/BUS-TOUR @STARTUPBRITAIN STARTUP BRITAIN

Louise and Ashley set up Delle Digital on August 1. It’s a web design agency offering other services including social media marketing and search engine optimisation. They also teach digital skills on-site, online and at their learning hub at Dundee & Angus College. Louise grew up in Dundee and has worked in creative industries for over 18 years. Ashley is a US-born MBA who has had roles at Google and Disney; she met Louise while working at statistical analysis specialist Chi Squared Innovations. They’ve been supported while establishing Delle Digital by Business Gateway. They sense the “huge buzz” in the creative and technology sector in Dundee but add: “we would have to say that it is crucial in Scotland to venture out, establish a networking system and be known to business support agencies”. They feel an extra responsibility - “we are trying to ﬂy the ﬂag, to show women they can work in this industry”.

For more case studies visit www.bqlive.co.uk/start-up-stories

INTERVIEW bqlive.co.uk

As Scotland prepares for the Rugby World Cup, BQ editor Peter Ranscombe meets Mark Dodson, the businessman charged with keeping the show on the road both on and off the field

It’s not often that the worlds of rugby and music collide. But when Foo Fighters frontman Dave Grohl fell off a stage in Gothenburg on 12 June, one senior figure in the Scottish game was very worried indeed. “It wasn’t without trauma,” smiles Mark Dodson, chief executive of Scottish Rugby, the national body for the game north of the Border and also the owner of Murrayfield Stadium in Edinburgh, where the Foos had been due to play on 23 June. While fans were clearly concerned about the former Nirvana drummer’s recovery, Dodson had the added worry of what a cancellation instead of a postponement could mean for the financial health of his organisation. The stakes were high. “I felt sorry for our events team,” he says.

“The deal was done commercially and then the execution is all done by our events team. He broke his leg and then we thought ‘This doesn’t look great’. Everything’s been sold, everything’s been done, the date’s been reserved. At first we didn’t know when he’d be back. But we worked really closely with the promoter and got a new date on 8 September for the concert.” Dodson reels off a list of artists – from teen heartthrobs One Direction through to rockers The Kings of Leon and pop queen Madonna – who have played at Murrayfield since he took over in 2011. Dealing with rock stars is a long way from where Dodson grew up. Born in 1960, he went to school at Salford Grammar but left after his A-levels and started working on building sites because he didn’t know what he

Tackling the finances

INTERVIEW bqlive.co.uk

wanted to do. “I was earning a decent amount of money working six-and-a-half days a week, and in those days it was cash-in-hand,” Dodson remembers. “We’re talking about 1977-78 when work wasn’t plentiful. For me, as a young lad, it was a passport to decent money and gave me time to decide what I wanted to do. I didn’t have a trade so I was a labourer.” Seeing a job advert for Thomson Regional Newspapers set Dodson on the course that would shape his career. Three years of training with Thomson’s commercial department led to an advertising sales post with Guardian Media Group (GMG) and a 20-year association with the company, which culminated in becoming chief executive of GMG Regional Media in 2005. Dodson led a potential management buyout of the regional business in 2010 but was pipped at the post by a higher bid from rival Trinity Mirror. After taking time out to consider what he wanted to do next, Dodson was put in touch by a mutual friend with Sir Moir Lockhead. Lockhead had been appointed as chairman

of Scottish Rugby in 2011 and one of his first tasks was to find a new chief executive. Dodson had been involved with the sponsorship of Sale Sharks and so Lockhead invited him to apply for the job, which he got. “It looks like a big shift from being where I was in the media, but when you actually get here it’s a very similar business in many ways – it’s got an audience, it’s got sales and instead of editorial content you have sports content, which is what happens on the pitch,” Dodson muses. “Things like negotiating TV rights deals and dealing with the press are very familiar. It’s interesting that Ian Ritchie, who is the chief executive in England, has a media background, and Roger Lewis, who is the boss in Wales, also has a media background. So we’re slowly infiltrating the sports world.” Perhaps the link between newspapers and rugby in Dodson’s life shouldn’t come as such a surprise. His first job was as a paperboy and he played rugby league from the age of eight. He switched to rugby union at secondary school and continued to play a mix of the two until he

was 18, when he entered rugby union’s junior leagues in the North-West of England. Having started off as a seven, he later switched position to inside centre before retiring from the game at the ripe old age of 46. “I finished because either inside centres got bigger or I got slower,” he jokes. “I was never any good though – I was very keen, but this wasn’t a case of a career being spoiled by injury or anything like that.” As well as being the national body for the sport, Scottish Rugby also owns the franchises for the nation’s two professional club sides, Glasgow Warriors – which became the first Scottish club to win a major trophy during rugby union’s professional era when it lifted the Pro12 championship earlier this year – and Edinburgh Rugby, which reached the final of the European Rugby Challenge Cup last season. While the business has come on leaps and bounds under Dodson’s tenure – posting record revenues of £44.2m in the year to 31 May and bringing net debt down to under £10m – it’s the performance on the field for which Scottish Rugby is inevitably judged. While the club

INTERVIEW bqlive.co.uk

sides have enjoyed a truly outstanding season, Scotland fared dismally at the Six Nations, losing all five matches. It’s all a very long way from selling newspaper adverts. “The thing that is unfamiliar is that, instead of measuring your key performance indicators in quarters of half-years, you measure them in 80 minutes on the field, which I find testing at times,” Dodson nods. “In the first two years that I was here, we were making real strides off the pitch but it was completely masked by what was happening on the pitch. If Glasgow failed and Edinburgh got beat and the national side lost the Calcutta Cup then the world was ending – nobody actually saw that the world could have been ending before but the team was winning. “That’s the important word – it’s all about winning. The perception of our business is changed by what happens on the field, but the rigour and robustness of the business is what happens off the field.” Fielding players for the world cup in England also poses some interesting financial challenges for the business. Dodson explains that, at the last tournament, Scotland fielded a squad of 31 players, with 15 coming from Scottish clubs, while 16 were exiles playing at clubs in other nations. This time round, following the success of Glasgow, about 25 players will be homegrown and only six will come from elsewhere to take on Scotland’s rivals in its group – Japan, Samoa, South Africa and the US. “I’ve had to spend an extra £1m to bring in players for the Glasgow and Edinburgh clubs while their players are on international duty,” explains Dodson. “We’ve brought in some players on one-year contracts and extended the contracts of others. After Glasgow winning the Pro12, I couldn’t just turn round to the fans and tell them that we wouldn’t try again this year because we’re concentrating on the world cup.” Financially, the sport was also faced with another hit from an unexpected quarter last season, in the form of foreign exchange rates. Prize money for rugby’s European competitions is paid in euros and, with the continuing weakness of the Eurozone economy, Scotland lost out through the relative strength of sterling. “Sweating the assets” is a phrase that’s seldom far from Dodson’s lips. Murrayfield only hosts around 25 rugby matches each year and so there are a lot of “dark days” when the stadium isn’t being used. As well as attracting musicians

like Grohl and his friends to play at the venue, Dodson and his team are also increasing the number of conferences and other events. “The new Murrayfield opened back in 1995 and people still think it’s an amazing stadium, which it is,” Dodson says. “But it’s 20 years old now and so it’s one of the older stadiums around. Look at places like the Emirates, or Twickenham following its refit for the world cup, or the Millennium Stadium. So we now have to look at what parts of Murrayfield we will need to upgrade to keep up with these other venues.” Some of the biggest headlines surrounding Dodson’s tenure so far have come from the sale last year of the naming rights of Murrayfield to telecommunications giant BT for a reported £20m, which was hailed as Scotland’s biggest sporting sponsorship deal and also covered domestic league and cup competitions and the Scotland 7s side. BT’s deal has also led

family atmosphere and to turn the matches into bigger events, with music before and after. Those big posters of the Scotland players with their tops off that we used to advertise the Six Nations – those weren’t for the benefit of the male fans, they were there to suggest to women that they could come along and see these guys in action. And it worked.” He says that family atmosphere is especially prevalent in Glasgow following the move from the ground at Firhill, which was only attracting around 2,000 fans, to Scotstoun, where the team is regularly drawing in crowds of 7,000 and topped 10,000 spectators for the semifinals of the Pro12. With the clubs enjoying greater success, is there an issue with Scottish Rugby acting as both the national body for the sport and also the franchise owner? “If you’ve only got two professional teams and those teams are the gateway to your national

“It’s all about winning. The perception of our business is changed by what happens on the field, but the rigour and robustness of the business is what happens off the field.” to the creation of a £1.6m club sustainability fund, including the appointment of business development officers to help the clubs find the next generation of talent for the professional teams and the national side. “Naming the stadium wasn’t the biggest attraction for BT,” Dodson reveals. “BT’s brand awareness is already sky-high, everybody’s heard of them. Instead, they were interested in the story that we told them about developing Scottish rugby and about building for the future.” That future doesn’t just include the men’s game and children’s rugby but also extends into the women’s arena too. “It’s women who help out at local rugby clubs and it’s mums who take their children to and from rugby training each week,” says Dodson. “Why shouldn’t women have the same chances as men to play the sport and represent their country? I have two daughters and they wouldn’t let me get away with it if we weren’t supporting the women’s game. “More women are coming to our games too now because we’ve worked hard to create that

squad and you lose control of one or both of those pro teams and it ends disastrously or you can’t control the pathway then the national team will suffer,” Dodson argues. “Unless we can control both those routes or trust in someone sufficiently to take the burden of one of those away from us then at the moment I don’t think it would be wise to sell off or try to sell off one of the franchises. “The other thing to remember is that rugby clubs don’t make money. A club is usually a net burden on an individual, a backer or a sponsor or a group of stakeholders because this is not yet a business where transfer fees are going to make you money or the income from television and sponsorship and tickets is at such a level that profits can be made easily. If you’re making a profit from a rugby club then you’re doing extremely well. “So there’s not a queue of people asking if they can spend £35m or so over five years. But, more importantly, even if there was then I’d have to make sure that those people were in it for the long term and had the best interests of Scottish rugby at heart.” n

ENTREPRENEUR bqlive.co.uk

The ‘in’ crowd Serial entrepreneur Bill Dobbie and financial expert Stuart Lunn aren’t just growing their own LendingCrowd business but they’re also helping other firms to expand, finds Peter Ranscombe

ENTREPRENEUR bqlive.co.uk

As Bill Dobbie sat surfing the web one night, he came across an idea that would eventually turn into his next business venture. “I was on the internet and I saw high interest rates available via Zopa, and I thought ‘What the hell’s that?’” explains Dobbie, a serial entrepreneur who founded a series of technology businesses from Iomart and Teledata through to Cupid and Maximiser. “I looked at it and experimented with it and put money on there. Then about a year or so later I came across another one, Funding Circle. Zopa was people offering loans to other people, while Funding Circle was people offering loans to small businesses.” Dobbie had stumbled into the weird and wonderful world of “crowd funding”, where individuals or companies turn to the internet to raise the finance they need to start their business, expand overseas or build an extension to their house. Crowd funding can take several different forms, from equity crowd funding, under which individuals follow the tried and tested model of buying shares in a business to fund its growth, through to rewards-based schemes, in which investors receive discounts, merchandise or even free beer in return for their cash. The form that caught Dobbie’s eye was ‘crowd lending’, a form of peer-to-peer lending through which investors lend cash to companies and then receive interest as their capital is paid back over an agreed period. Dobbie could smell a business opportunity and teamed up with an experienced financier to make it happen. Enter Stuart Lunn. The pair had met in April 2009 when Dobbie and his then business partner, Max Polyokov, were exploring options for floating Edinburgh-based dating website operator Cupid on the Alternative Investment Market (AIM) while Lunn was working for Cenkos Securities. Fast-forward to June 2010 and Cupid made its initial public offering (IPO), with Lunn leading negotiations with fund managers that brought in £8m of Cupid’s

£15m total. Lunn had set up Cenkos’ team in Edinburgh and later left to become a consultant, advising technology companies including Code Play. He and Dobbie had kept in touch, sharing coffee and lunches, and they began to discuss how they could work together. “It’s a bit of a cliché that all equity analysts want to run their own businesses – but I guess for me it was true,” laughs Lunn. After Lunn had set about researching the opportunities in the peer-to-peer lending market, by January 2014 the pair were ready to push the button on their idea and LendingCrowd was born. By that stage, Dobbie had stood down as chief executive of Cupid, which had been dogged by allegations that it had sent messages to its customers from fake dating accounts, despite an inquiry by accountancy firm KPMG clearing the firm of any wrongdoing. Cupid has since sold its dating websites – many of them to Polyokov, who had already left the company – and turned itself into a cash shell called Castle Street Investments, which is developing its investment strategy. Based at Dobbie’s offices in Edinburgh, LendingCrowd provides an online platform through which individuals can lend money to small businesses in return for interest payments of between about 6% and 12% per cent, depending on the level of risk involved. Each business applying for a loan is assessed by

LendingCrowd’s credit team, the members of which have more than 100 years of combined experience in the banking industry. The team is led by Ian Cunningham, who spent 40 years at Royal Bank of Scotland, latterly as its head of corporate and commercial lending in Scotland and a member of its global credit committee. “Ian will be the first one to hold his hand up and say that some of the credit decisions that RBS made in the run-up to the financial crisis turned out to be wrong,” says Lunn. “But Ian was in charge of the Scottish loan book, which differed from the English loan book and wasn’t so heavily invested in commercial property or sectors like football clubs. It has all added to his experience of the ebbs and the flows in the economy.” Since it began organising loans in October 2014, 26 companies have borrowed just under £1.5m from LendingCrowd’s users, with loans ranging from £10,000 up to £100,000. Repayment terms vary from six months through to five years, with a breadth of companies using the service, from those that turn over £150,000 a year through to larger businesses with revenues of £7m. As well as varying in size, the borrowers also vary across a broad range of economic sectors, from IT repair business Sort My PC through to Fine Coffee Club, the coffee machine capsule maker founded by Andrew Veitch and Diet Chef boss Kevin Dorren. Around 900

“At the moment, only around 200,000 people have lent money across all the crowd lending platforms. In comparison, there were 13.5 million ISAs used last year. If only a fraction of that number of people opened the new innovative finance ISA then it would make a huge difference”

ENTREPRENEUR bqlive.co.uk

“I think some of the professionals in the marketplace put the cart before the horse and talk too much about regulation before they talk about the consumers and what they can do for them”

investors have made £1.5m of funds available on the website. While some borrowers will have been turned down for loans from the traditional high street banks, Lunn also points to a new generation of entrepreneurs who have founded their businesses following the 2008 financial crisis and who have never had a relationship with a bank. Or, as Lunn puts it: “They buy their groceries online, they book their holidays online, so why shouldn’t they go looking for lending for their business online too?” As well as helping other companies to grow, Dobbie and Lunn also have their sights set on strengthening their own firm. LendingCrowd already has 11 staff and about seven contractors, with the firm gearing up for further growth. “We’re a small business too, so we understand what our customers are going through,” says Lunn. The company is already in talks with potential investors, which could buy both an equity stake in the business and also put money onto its platform to lend to small businesses. Investing in the business and increasing the amount available to lend to borrowers could become a virtuous circle, satisfying more customers and also increasing the value of the firm. LendingCrowd is also looking to attract wholesale funding – although Dobbie and Lunn will have to set up a separate vehicle to put money onto their platform. When it starts being regulated by the Financial Conduct Authority, LendingCrowd won’t be able to become a balance sheet lender itself, but Lunn is prepared to come up with clever ways of bringing in further cash. That investment couldn’t come at a better time as the growth opportunities for LendingCrowd are mounting. As part of his summer Budget in July, Chancellor George Osborne unveiled the innovative finance individual savings account (ISA), a third type of ISA that will allow savers to spread money across a new range of

investments, including peer-to-peer lending. While the rules are still to be fully announced, the ISA is due to be introduced in April 2016. “This will be a game-changer for the crowd lending market,” explains Lunn. “At the moment, only around 200,000 people have lent money across all the crowd lending platforms. In comparison, there were 13.5 million ISAs used last year. If only a fraction of that number of people opened the new innovative finance ISA then it would make a huge difference.” One of the ways in which Lunn and Dobbie could target this new market is by creating a product that independent financial advisors or wealth managers can offer to their clients. Customers could pick the return they want on their investment and select the level of risk that they’re prepared to stomach and then the company’s technology could match them up to a suite of appropriate borrowers. “It wouldn’t be a fund in the traditional sense, but it would give lenders the chance to invest money without having to assess each individual company themselves if they don’t want to,” explains Lunn. While the changes being introduced by the Chancellor could clearly boost business for LendingCrowd, Dobbie is concerned about the burden of regulation facing the financial services sector. “Clearly finance is an area dear to most people’s hearts but we should remember that the regulator is there to protect consumers and to encourage competition,” thunders Dobbie as he gets into his stride. “I absolutely understand the overall benefits for the consumer of a regulated marketplace, but I think some of the professionals in the marketplace put the cart before the horse and talk too much about regulation before they talk about the consumers and what they can do for them. That’s going to be a hobbyhorse for me at LendingCrowd for as long as I’m involved with the business – consumers and customers must come first.” n

ENTREPRENEUR bqlive.co.uk

BIT OF A CHAT Jock Yuler examining the news behind the headlines On the wrong track Taking the train from Glasgow to Edinburgh over the summer was like a trip down memory lane for me. Network Rail had closed the Winchburgh Tunnel in West Lothian for six weeks, meaning there were no fast trains between the two cities and commuters were left to take a magical mystery tour on the Airdrie-Bathgate route or a ramble through the countryside on the Shotts line. Stopping at stations like Carntyne, Shettleston and Garrowhill gave me flashbacks of a misspent youth in the East End of Glasgow. Two of the Edinburghers I sat next to on the train looked pretty confused, with one telling the other he thought “Shettleston” was just a made-up name for a BBC Scotland comedy series – until I tapped him on the shoulder and politely pointed out that he meant Burnistoun. Using the Shotts line made for an even more exotic journey, racing through places like Holytown, Carfin and Cleland, before reaching Fauldhouse, Breich and Addiewell. One bloke in a posh suit and tie couldnae stop cursing at the lack of wifi on the trains – funny the things you miss when they’re gone. Shutting the tunnel was part of the electrification of the main Glasgow to Edinburgh line via Falkirk High – they had to close it so they could dig deeper into the ground and lower the tracks so they can get overhead lines in there. Clever stuff for a tunnel that was built in 1842. If you think adding 25 minutes onto a

Work life balance I always enjoy a good survey story. Turns out 70% of Glaswegians think they can’t take a holiday because they’ve got their work-life balance all wrong. Though in Edinburgh, it’s only 44%, according to WorldPay. Maybe there’s something else at play here too – the beer’s so cheap in bits of Glasgow that you don’t have to go away on holiday, whereas getting change from a tenner in Embra is getting rarer and rarer.

50-minute journey was bad enough then brace yourselves for next summer –parts of Queen Street station will be closed as part of the same work. Edinburgh Glasgow Improvement Programme – now, now, that’s ‘Egip’, not ‘eejit’ – promises that all this electrification will take journey times down to 42 minutes from 50 minutes and mean they can run longer trains. Let’s hope all the effort is worth it.

Winds of change One of the stories in the papers over the summer made me smile – and no it wasnae the one about Lord Sewel. It turns out that Donald Trump owns shares in a company that runs wind farms. For all the noise Trump has made about those 11 turbines planned for Aberdeen Bay and how they will spoil the view from his golf course, it seems he has shares in Nextera Energy, which has 100 wind farms in 19 American states. As part of his bid to become the Republicans’ nominee for the White House, Trump had to make the disclosure to the Federal Election Commission. Now, like all the great and the good, Trump probably doesnae know which companies he’s got shares in and which companies he hasnae got shares in. One of his spokeswomen was quick to say: “The report clearly states on p38 that ‘Deutsche Asset & Wealth Management A/C 1 Brokerage Acct – Holdings’ as outlined on pages 38 thru part of page 41(lines 1-116) manages a portion of Mr Trump’s money and independently makes investments on his behalf. These types of investments and the specific stocks chosen by Deutsche are done without Mr Trump’s knowledge or involvement.” That didnae stop the papers having a wee bit of fun with it though. As WWF Scotland director Lang Banks put it: “Trump probably spat out his morning coffee when he read the papers to discover that, despite his own views, he was investing in wind farms.”

“Must’ve been something in the water back at Barclay House – or were any of them getting any work done at all?”

Writing’s on the wall Farewell to Kenny Kemp and hello to Peter Ranscombe, who slips into the BQ Scotland editor’s chair with this issue. It turns out Ranscombe has a bit of a creative side – his debut novel, called Hare, came out in paperback over the summer. He’s not the only business hack that’s been at it either. Terry Murden, formerly Ranscombe’s boss at The Scotsman, has one out too, called Invisible Lies. Then there’s ex-night news editor Neil Broadfoot’s Falling Fast and sub-editor Janet Watson’s memoir Nothing Ever Happens in Wentbridge, not to mention the daddy of them all, former assistant editor Doug Jackson, and his Roman swords and sandals epics. Must’ve been something in the water back at Barclay House – or were any of them getting any work done at all?

Br L

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EVENTS

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BQ’s business diary helps you forward plan

SEPTEMBER 15 Law Society of Scotland European Union Debate, Vintners’ Hall, London, 6.15pm to 9.30pm. www.lawscot.org.uk

15-16 ‘Charting the course to commercialisation’, Scottish Renewables Marine Conference, Exhibition & Dinner, Eden Court Theatre, Inverness. www.scottishrenewables.com

24 Northern Star Business Awards Dinner, Aberdeen Exhibition & Conference Centre, 6.15pm to 12.30am. Email events@ agcc.co.uk or call 01224 343901.

25 Highland Business Awards, Drumossie Hotel, Inverness, 12pm to 4pm. Part of Highland Business Week (21-25 September). Email info@inverness-chamber.co.uk or call 01463 718131.

OCTOBER 5

Scottish Council for Development & Industry Influencers’

22 Glasgow Chamber of Commerce Women’s Networking Lunch, Hotel du Vin, Glasgow, 12pm to 2.30pm. www.glasgowchamberofcommerce.com

22 Scottish Lifesciences Association Autumn Reception, Royal Bank of Scotland Gogarburn, 6pm. www scottishlifesciencesassociation.org.uk

22 MADE: The entrepreneur Festival 2015, Sheffield City Hall, 9am-6pm, www.madefestival.com

25-30 Scottish Development International Oil & Gas Trade Mission to Texas. Email murray.bainbridge scotent.co.uk

29 “Women on boards: are you boardroom ready?” Law Society of Scotland, Radisson Blu Hotel, Glasgow, 9am to 1.30pm. www.lawscot.org.uk

29-30 10th Business in the Parliament Conference,

Dinner, Chester Hotel, Aberdeen, 7pm for 7.30pm.

organised by the Scottish Government and Scottish

The guest speaker will be Susan Mackenzie, Director of

Parliament. www.businessintheparliament.org.uk

the Hazardous Installations Directorate at the Health & Safety Executive. Email fiona.downie@scdi.org.uk

Procurex Scotland Live, Scottish Government 11th

NOVEMBER

National Procurement Conference, Scottish Exhibition &

11 Federation of Small Businesses East of Scotland

Conference Centre, Glasgow, 8.30am to 4pm.

Annual Dinner, Edinburgh International Conference

www.procurexlive.co.uk/scotland

Centre, 7pm. Email dorothy.lynch@fsb.org.uk or call

Ayrshire Business Awards Gala Dinner, Seamill Hydro Hotel,

0131 272 2740.

6.30pm to 11.30pm. Part of Ayrshire Business Week (5-9 October). info@entourageuk.com or call 0141 887 6181.

13-15 CPhI 2015, Madrid, Spain. Scottish Development International pavilion for pharmaceutical and supply-chain companies.

22 CBI Scotland Dundee Annual Dinner, Apex Hotel, 7pm for 7.30pm. Open to members and non

12 Festival of Entrepreneurship with Sir Chris Hoy, Edinburgh International Conference Centre, 1.30pm to 4.30pm. www.scottishbusinessawards.co.uk/foe

12 Scottish Business Awards with George Clooney, Edinburgh International Conference Centre. Email a.mahon@capital-events.co.uk, call 0131 220 8206

members. Email colette.cunningham@cbi.org.uk

BQ’s business events diary gives you lots of time to forward plan. To add your event, email details to peter@ranscombe.co.uk, with ‘BQ events page’ as the email subject heading.

The diary is updated daily online at bqlive.co.uk

Please check with contacts beforehand that arrangements have not changed. Events organisers are also asked to notify us at the above email address of any changes or cancellations as soon as they are known.

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