Entrepreneur for sale
After running three businesses, James Layfield has taken a radical step in order to raise finance for his fourth.
‘When you are trying to raise funding you end up meeting a huge number of investors and 90 per cent of them won’t get it,’ he tells Business XL. ‘They’ll say “that’s great, but…” and the interesting thing is, the “but”s are all different. So, you end up eroding your original idea a bit.’
Impatient with the rigmarole, Layfield wondered if there was a way to make things simpler. ‘I asked myself, what are investors really buying into? It’s not the PowerPoint or Excel presentation that turns then on, it’s me.’ That conclusion led him to offer investors ‘a stake in myself’ for £1 million: 10 per cent of all his future earnings.
From the age of 12, Layfield’s dream was to be an entrepreneur (‘except I was dyslexic so I couldn’t spell it’). Starting off in advertising, he built up a marketing agency, The Lounge Group, which now has sales of £4 million in the UK. His second company, airport lounge operator Escape Airports, was sold ‘in less than 12 months’, while a third business, a sales consultancy, is still running.
The marketing background is evident in the way he pitches his fourth business, a membership-based workspace in central London. ‘Imagine Soho House had a lovechild with Regus Offices,’ he quips. Grand Central, as it will be called, is aimed at business people without an office who can drop in and hold meetings, but in an environment conducive to networking. The business needs £1.5 million to get off the ground, of which Layfield has already raised the lion’s share.
But isn’t valuing all his future earnings at £10 million, not just those made from Grand Central, selling himself a bit short? ‘It’s a bargain,’ says Layfield emphatically. ‘But it’s a new concept, so you’ve got to put something together that’s going to be palatable.’ To protect himself, Layfield will ask investors to sign up to the entrepreneurial equivalent of a pre-nup: should he wish to part company, he will be able to buy back their stake for £5 million.
So far, buoyed by coverage in the Financial Times and on Radio 2, Layfield is talking to five private individuals and two venture capital firms. At this rate, there could even be a bidding war.