James Caan: Dragons’ Den and beyond

The celebrity entrepreneur updates us on his portfolio, and lets us in on his future plans

Former Dragons’ Den investor James Caan recently spoke to Growing Business about his reasons for leaving the show, the investments he has made both in the Den and through his private equity business Hamilton Bradshaw, and his plans for the future.

What made you leave Dragons’ Den?

I was on holiday in December last year, and I was reflecting on 2011. We’d invested in 42 businesses as Hamilton Bradshaw, and I’d been struggling to spend enough time with the businesses that I had. I was looking ahead, and thinking that another season of Dragons’ Den would probably mean I’d do another four or five investments. That’s four or five other businesses now that I’m not going to spend time with.

One of the things I felt very guilty about was that I wasn’t spending enough time with the people I had, the entrepreneurs I’d backed, so I took the view that I need to spend time to make the businesses I’ve invested in more successful, than just doing deals for deals’ sake, because you do sometimes find yourself becoming a deal junkie – you end up doing deals because you can do deals. Me stepping down from Dragons’ Den gave me the opportunity to concentrate on the businesses that I already have.

What was your all-time favourite pitch?

The girl who came with the bedsheet with a black line down the middle was quite remarkable; somebody had spent two years developing the concept. In Britain, married couples struggle to get a decent night’s sleep because one of the partners spends too much time on the other’s side of the bed. They thought the cure was a white bedsheet with a black line in the middle. I thought that was an ingenious pitch.

Can you update us on the progress of your Dragons’ Den investments?

I recently met with Goldgenie, they’ve got a fantastic order with the Elton John foundation where they’re now gold-plating all of Elton’s iPhones that get auctioned at his AIDS foundation, which is a nice contract. Rapstrap is doing extremely well in terms of the orders it’s getting for its product – we’re getting a lot of interest from abroad and I think that’s going to do really well. With Chocbox, the electrical device, we’ve got an exclusive contract with a global provider, and the dog treadmills are still selling well. So, overall, I’m very happy with the portfolio I’ve invested in.

Are any doing less well than you expected?

You’re never going to get them all right. Some businesses will naturally fly, some struggle – it could be the market, the economy, or the pricing. Typically I work on the basis that a third (of investments) will generally struggle, a third do ok, and a third you get a home run on. My statistics are probably not dissimilar to that.

Can you tell us about some of the investments made by Hamilton Bradshaw recently?

We’ve recently acquired a healthcare business – quite an interesting business, which places doctors with local authorities. We’ve found the business has a very niche market, in literally placing doctors into hospitals, and is turning over about £60m per year. It’s a very profitable business, and quite a dynamic operation.

We’re also looking at a real estate investment – a property in Knightsbridge where we’re looking to invest and do a development, which will have an end value of around £35m. For a single house it’s quite expensive, but it gives us an opportunity to enter the premium end of the market.

The diversity of the investments we make is quite broad, literally from every aspect – it could be real estate, it could be a start-up, it could be a £60m turnover business, it could be backing an entrepreneur.

The mid-market private equity sector is said to be stalling at the moment. Is this borne out by Hamilton Bradshaw’s experiences?

Absolutely not. The mid-market is a very challenging market, simply because it’s not just about putting capital in, it’s having the management expertise to work with small businesses.  We (Hamilton Bradshaw) have certainly never been as busy as we have this year. 2011 is probably going to be our record year.

Is it important for an equity investor like Hamilton Bradshaw to have businesspeople on board rather than just money men?

Absolutely. Hamilton Bradshaw is one of the very few companies in the UK that really is not run by a team of bankers. We’re operators – we get business, we understand business.

Do you look for a balance in your recruitment strategy?

Yeah, we have a team of over 30 investment professionals, and the core for me is not ‘can they read a balance sheet’, it’s ‘can they run a business’. Fundamentally, when we’re investing we’re investing in businesses, and I know that the entrepreneurs we invest in don’t just want our money, they want our expertise; they want us to add value to the businesses we invest in.

On a personal note, mobile tech seems to be one of your passions at the moment. Are there any companies that are particularly exciting you?

The whole tech space is a very dynamic and creative area. I love it as a user but I’m not an expert as an investor, because the whole risk profile of technology investments is very very high. If they hit they’re massive, but there are thousands that don’t. So it’s not a space that I would typically invest in, simply because I don’t have the expertise, knowledge or experience of that market to make the right judgement call.

Your Business Secrets app rocketed to number 1 in the download charts. Why was it such a success?

It demonstrates the demand and appetite for entrepreneurship in this country. There are clearly so many people out there who want to be entrepreneurs and are on the verge of breaking into that ground, and the advice just isn’t available. For me, it’s been one of the most rewarding experiences I’ve ever had.

Do you plan on launching further apps?

I would love to develop the app I’ve got, and make sure I can consistently add more content. As the app evolves, as my techniques evolve, as I gain more experience from some of the businesses I’m running today, I’d like to see the app becoming something that’s updated on a regular basis.

What achievement in your life are you most proud of?

Launching the James Caan Foundation, to make a difference to people who may not have achieved the things they could have done, is the biggest single achievement I can think of.

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