The ups and downs of funding your business on primetime TV

You may recognise Lexie as a Virgin StartUp business. The loan we received enabled us to re-shore production and produce our second collection so it was vitally important to the business...

You are reading an article from the How to find funding series, to read more about this you can visit the series homepage.

But what you may not have seen, was that like many bad B-movies starring washed up soap stars, Lexie was actually created for TV.

As with 'Dragons Den', BBC3’s 'Be Your Own Boss' was a show that encouraged aspiring entrepreneurs to try their hand at getting investment. Aimed at a younger generation, the show took place over a couple of months, filming everything from the initial 500 or so applicants presenting, to the final nerve wracking meeting. The investor in question was Richard Reed of innocent smoothies who at the time was (with the other founders) in the process of creating jamjar, a new investment vehicle and was looking for businesses to get passionate about.

Having faced the cameras and braved the show we were offered the investment from Rich and that’s where the program ends. But what happens afterwards? Did a limo roll up outside the door with wads of cash and how much is Rich really involved?

Lily Rice with Richard Reed on the set of Be Your Own Boss

Well firstly I’d like to dispel any myths about TV investors. Now I can only speak for Rich but to imagine these super wealthy business people got to that point by not caring about their finances is ridiculous. So no, no limo and yes Rich is very much involved. When I let him!

The first thing to happen post show is that your Nan rings you to say didn’t you do well. The second thing is that you have to go through a process called ‘due diligence’. This involves checking each other out and making sure everything that’s been promised is true, i.e don’t go on tele and promise you can do six million in sales in the first year if you can’t. Porky pies do not fly with investors, TV or otherwise. The flip side of this is that you check them out. Once the glamour and excitement’s calmed down do you really want to give a chunk of your business baby away and if so is it for the right amount? 

That time I said “does he know I don’t know how to run a business?” is still brought up in interviews.

Despite being all healthy smoothies and witty ingredients, Reed is a shrewd negotiator and I like to think I’m no push over, but after some open discussion we agreed on some terms that made us both happy.

Having signed on the dotted line you then get some cash, so far so good. But being on TV had other side effects. We were approached left, right and centre by not only people wanting to buy the product (awesome) but people offering to do things for us… for a price. Being on TV airs your businesses dirty laundry in the public eye. That time I said “does he know I don’t know how to run a business?” is still brought up in interviews and although the final figure of investment reached differs from that on the show, people still presume the brand has cash to flash. 

For us being on TV was a vital, if unorthodox, method of getting investment. I started with vague notions of knowing there was a gap in the market I could fill and a goal of running my own sportswear brand. Six weeks later I had written a business plan, designed, made and photographed our first collection. I had sorted out a supply chain, secured the first buyer (someone we still stock with today) and of course got the money to pursue my dream. All of which could have taken me years, had I even got the balls to start in the first place. But the main and most important outcome of the show for me was Richard and his team. 

Seeking investment is tricky and at times it’s frustrating to the point of tears, cameras or not. However you do it as you need to. Once offered a deal you may want to jump in with both feet, but I urge restraint. I was extremely lucky. Once the film crew had left, what remained was someone I could get along with easily, who spoke my language and who I had admired for a long time (hence my initial application to the show). His team are there 24/7 should I need advice and now with my Virgin StartUp mentor Paul, I have built an awesome unit for guidance and support.

Investment and finance may very well involve spreadsheets and cold figures. But past this you may be signing up to work with someone, potentially for the rest of your business life. So while x amount may sound fantastic, analyse not just the clauses of the contract but the person behind it. The last thing you want is to get stuck working for or with a dragon, whether or not you’re in the den.

This is a guest blog and may not represent the views of Virgin.com. Please see virgin.com/terms for more details. Thumbnail image from gettyimages.

Comment

Our Companies

Quick Links