Year 2001
"Our company is valued at USD$1bn !" I proclaimed, in-front of a panel of five judges comprised of Investment Banking professionals from Commerzbank to HSBC.
"How did you arrive at USD$1bn?" cried the HSBC Banker on my right.
Before any one of us (our Imperial College entrepreneurship challenge 2001) have finished taking a breath to respond, the panel had erupted into laughter and shared giggles with each other. We made eye-contact with each member of our own team - looking bewildered.
Today
Fast forward to yesterday 3rd June 2018. I was watching BBC Dragons Den with my children and saw the same thing happening to THREE entrepreneurs! They were savaged and in some ways humiliated by the judges. "You want £150k for 5% of your business, what makes you think your business is worth £3million?" - "Sorry I am out!"
What is going on?
I have studied an Economics module at university and still got savaged! So what is wrong?
It is my personal belief that our formal school curricula ill-prepares us for the financial fluency demanded by angel investors/venture capitalists/private equity...etc.
In some way, you may argue it is unfair for investors to demand such financial proficiency...but my perspective on this subject has changed. Why? Because the question, "How have you valued your business?" reveals whether an entrepreneur can separate desire, dreams and ego from facts, rigour and discipline; whether your mind thinks in one dimension or able to appraise from two directions.
Financial Learning for Everyone
It has taken me years and years of i) reading The Economist, ii) reading the Financial Times, and iii) watching Closing Bell on CNBC... (plus work-experience and other professional training) to deeply appreciate the questions asked by investment analysts, investors and by the Dragons.
However, there is no way I would wish anyone to take as long as me learning this!....so I am going to build a condensed Financial Literacy programme for budding entrepreneurs...and test this on my 11 and 10-year old children!
If you are interested in this development, please drop me an email!
Jerry Lee
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