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Entrepreneurs Panel

Jeremy Roberts
Tony Caldeira
Charlie Mullins
David Pollock
Michael Oliver
Brian Hay
Debbie Pierce
Richard O'Sullivan
Jennie Johnson
Steve Purdham
Julie Meyer
Laura Tenison

VC investment

Steve Purdham

Has worked in the software industry for more than 25 years. Founded Surfcontrol in the early 80s and built it into a global provider of internet filtering software before it was sold to California-based Websense in 2007 for £201 million. Moved straight onto the launch of We7, an advertising-funded music download company supported by rock legend Peter Gabriel. We7 was relaunched in 2008 as an internet jukebox with 3.5 million songs which users can listen to for free. Purdham is hoping for user figures of two million in 2009.

Question: 

I want to raise more capital to expand my business and I think approaching a venture capitalist is the best way to do this. However, one of the other directors, who has a 12 per cent stake in the firm, is against my idea. My big fear is that he may persuade one of the other directors, who has a 15 per cent stake, to join him. If this is the case would I have to abandon my idea?

Answer: 

To raise venture capital money requires a signifi cant amount of time and commitment. VCs will invest in the business AND without exception the team, so if you are not all singing from the same hymn sheet then you will fall at the first hurdle.

So you need to get to a growth strategy that everyone agrees with and execute against that. From that you will be able to decide whether VC investment is the right thing.

It is clear, however, that you and your fellow directors need a very open discussion as to the future of the business. It sounds like you are at one of those classic crossroads that as individual director/shareholders you each have potentially different views and ambitions which, if not addressed, will impact the business more and more over time.

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