Dragons’ Den-style help for North entrepreneurs

Jul 22 2008 by Peter McCusker, The Journal

TEN prominent North East business people have each put hundreds of thousands of pounds into a Dragons’ Den-style venture capital fund to encourage the region’s next generation of entrepreneurs.

The £3m fund – dubbed Hotspur Capital Partners – has already invested in two companies after the North East-based businesses convinced the financial backers of the merits of their enterprise.

Multi-millionaire pub entrepreneur Alistair Arkley, one of the Hotspur members, said: “We are looking at companies we can back with North East involvement.

“As well as the financial investment, we are able to use our contacts to help open doors for them and, if appropriate, we may take on non-executive directorships.” One of the companies which has received backing from Hotspur to date has moved into the region from London where its ex-pat Geordie owner had previously been based.

A second company, Sunderland- based Caspian Learning, which makes 3D education and corporate games, is expanding into the US with the help of Hotspur and NorthStar Equity Investors.

The 10 entrepreneurs have committed around £2.5m in the first year with the average contribution being around £250,000.

The Hotspur partners have agreed to commit further substantial sums over the coming years, with a view to seeing a return on their investments within around three years. Colin Willis, managing partner of Hotspur, said fund members did not court publicity, were keen to support North East enterprises and obtain a successful return on their investments.

He said: “Hotspur is a small group of individuals who are interested in supporting North East businesses.

“The companies seeking investments will make a presentation to myself and Hotspur members and a decision will then be made on the merits of the business, whether or not an investment will be made, and the level of that investment.”

Mr Arkley acknowledged the similarity to the TV Dragons’ Den although he sought to distance Hotspur from the confrontational element of the popular show, which returned with a new series on BBC2 last night.

FACTFILE

AFTER working for Scottish & Newcastle Breweries, Alistair Arkley became managing director of Cameron’s Brewery in Hartlepool in 1985.

In 1991, he raised £50m to establish Century Inns, which he floated on the Stock Exchange in 1995 and sold in 1999.

He then established New Century Inns Limited, which he sold in November last year for £32.6m to Suffolk brewer Greene King.

Following this sale, he formed a new company called New Century Enterprises which provides consultancy and accounting services.