Venturelab to back the next big ideas

A SUCCESSFUL businessman is investing his own cash in people with ideas who he believes could become the next generation of entrepreneurs. Ian Briggs met Venturelab founder Justin Whitston.

JUSTIN Whitston is not afraid to voice his opinion. And that’s no bad thing.

The evening before our interview, Mr Whitston gatecrashed a meeting of senior business figures in a Leeds city centre hotel after spotting a notice about it in the hotel’s lobby.

“I pretty much took over,” the affable Mr Whitston says.

And what did he find out?

“The meeting was all about launching an initiative in the region to help small businesses to grow,” he says.

“But do you know what? I couldn’t see a small business owner or entrepreneur in the room so I gave my opinion.”

Mr Whitston is critical of the current crop of investment programmes available in Yorkshire. He believes those that run events which enable people with ideas to pitch to investors are flawed because professionals rather than investors attend to network.

He also doesn’t believe enough vetting is done of those pitching their ideas, resulting in a very small number of potentially successful businesses attending the events.

“I was going out to these groups but I thought they were awful,” Mr Whitston says. “There weren’t a lot of people with cash there and not a lot of peopl putting their hands in their pockets.

“At all these networks you’ve got the same companies going round looking for funding and you start to wonder why they’ve not got any funding.”

These criticisms of the current regime, with many initiatives being led by the public sector, are major reasons why Mr Whitston, who founded, grew and then sold Yorkshire car rental firm Nexus Vehicle Management in a multi-million pound deal in 2007, has established Venturelab.

He is also conscious that from personal experience when he launched Nexus in 2000, there is little support to help indivisuals build successful businesses. 

Venturelab, which officially launched last Friday, will back people with ideas through advice, loans and equity investments.

Mr Whitston has invested almost £200,000 creating a state-of-the-art premises for Venturelab in Leeds city centre which will provide a base for young businesses.

Ventures can submit their business plans online to Venturelab and if they grab Mr Whitston’s attention he is prepared to invest £25,000 into each one in loans or equity.

Mr Whitston said investments would be made in up to 10 ideas this year but that number could stretch to 50 if he believes that many ventures have the potential to become successful businesses.

The start-ups will be able to base themselves at Venturelab’s headquarters which offers desks, meeting space, and IT expertise. Firms can also sign up as members for free.

Mr Whitston, who is prepared to invest £2m in small businesses through his seed investment programme, says: “What I want to do is strip it right back and go for people with ideas. This isn’t aimed at entrepreneurs as everyone is calling themselves an entrepreneur these days.”

A major part of Venturelab’s funding offer is a six month investment programme which will include everything from IP to social media: “It encapsulates everything a business needs,” says Mr Whitston.

Following this period, a decision will be made about whether Venturelab will invest further in the business, whether to put it out for investment from high net worth individuals or to bring it to market if this hasn’t been done already.

Venturelab will make its money from its investments through traditional routes such as exit, as well as from member services, which include selling packages including web design, event management, business plan reviews as well as hot-desk and virtual office packages.

Mr Whitston, who has also built a large property portfolio, believes finding funding has become particularly difficult for small businesses because of the recession and sees Venturelab as a way of filling that gap.

“This is a much more dynamic way of trying to back an ecosystem of start-ups,” he adds. “This is about those 100,000 people who walk through Leeds train station each day and want to go out on their own but are afraid to make that leap.”

The deadline for the first round of applications is September 2. Investments will start from November.

For further information visit www.venturelab.co.uk.