Peter Jones CBE
Entrepreneur and Founder, Peter Jones Foundation
Since the first episode of Dragons’ Den aired back in 2005, Peter Jones – the one remaining panellist from the programme’s original line-up – has invested in more than 15 companies.
He’s backed successful ventures specialising in products from low-carb noodles and garden equipment to consumer foods and fashion magazines. Perhaps most memorable, though, was his punt on Levi Roots’ Reggae Reggae Sauce – his faith repaid with an enormous return on his initial contribution of £25,000. Today the business is worth multi-millions. Couple this with an extremely lucrative portfolio of companies not linked with the show and it’s fair to say that Jones knows a thing or two about what to look for in a new business.
Advice for start-ups
So with more and more people launching their own companies all the time, what would he say to ambitious entrepreneurs searching for the money to kick their start-ups into gear?
“Things are rapidly changing with regards to funding,” he says. “There are all sorts of options available to anyone setting up a business, but there are a number of important basics that will always stay the same.
“First and foremost, before you approach anyone with an idea, you must do the research. You need to have an exciting vision and a thorough action plan that maps out exactly how you are a going to use the money to achieve your goals. Any investor is going to need serious convincing and if you can outline in detail a promising return on investment, you’ll have their attention.”
The Peter Jones Foundation
In 2005 he launched the Peter Jones Foundation, which works to raise the profile of enterprise education in the UK. The charity runs the Peter Jones Enterprise Academy – a network of FE colleges that deliver specialist courses in business.
“A big part of the academy’s mission is to give young people valuable practical experience of what’s required to run a profitable business,” he says. “We put strong emphasis on the ability to pitch viable ideas well – without that, funding is very hard to come by.
We are doing everything we can to bridge the gap between education and industry so that when our students enter the world of work, they are equipped with the skills and knowledge that will get them ahead of the game.”
Those enrolled with the academy take part in a variety of competitions each year, many of which offer funding to the most promising companies. Students are currently competing to be crowned the organisation’s National Entrepreneur of the Year, for which six finalists will be invited to present their ideas to Jones in the hope of securing up to £5,000 investment.
Made a CBE in 2009 for services to business, enterprise and young people, Jones is a firm believer that entrepreneurs are made, not born.
“The quality of the proposals and the delivery has been outstanding in recent years. Seeing 17 and 18 year olds confidently pitching promising ventures confirms to me just how important this kind of education is.
As an investor, when I meet an ambitious young person who presents him or herself well and communicates clearly, I am engaged. It’s important to remember that investors are backing the people behind the idea as well as the idea itself, so never turn up to a meeting in scruffy jeans and a t-shirt.”
In addition to stressing the role of knowledge and preparation, Jones believes that the internet can do a huge amount for a new business, thanks, in part, to the rise of alternative funding methods.
“Things like crowdfunding and peer-to-peer loans are exciting developments,” he says. “Not only can they be quick and relatively straightforward, but they are great ways to get people talking about your business. By putting your proposal out there you’ll get useful feedback, clarity on your ideas and some free marketing.
Making use of what the internet has to offer a business – like various social media platforms and the Cloud, for example – can also reduce the amount of funding that you’ll need to get going. Knowing how to cut your outlays from the word go is a very valuable skill.”
With lending from high-street banks becoming less common, Jones is enthusiastic about alternative funding…
“Using friends and family for anything less than £50,000 is an ideal option – as it’s the cheapest way to borrow – and that grants now come in all shapes and sizes.” He emphasises the need to research the available avenues and be absolutely clear on which is the right option for any given business.
“If you are in a situation where you need contacts, lots of guidance and lots of money, then venture capitalists might be the choice for you, depending on the level of risk involved and the size of the company. But if you want to hold on to your equity and don’t need quite as much money, a business angel might be right. Regardless, it all comes down to your own research and knowing exactly what you need.”
He goes on: “The most important part of securing funding really is what you do prior to approaching anybody. Before you go to a bank for a term loan or lay out your ideas online, you have to have supporting evidence and long-term business and financial plans – investors are going to want to know time frames as well. A large number of new businesses fail, so if you can show genuine scale-up potential, you’re ticking a major box.”
His appetite for supporting fresh and innovative ideas is as invigorating as ever and is one of the reasons he’s created the PJ Investment Group – a personally backed private equity group that looks to invest, create and build businesses that have the chance to become highly successful.