Re-enter the dragon
Elnaugh to tackle online art world in latest venture
Rachel Elnaugh, the entrepreneur behind Red Letter Days, has returned to the business world just three months after her gift voucher firm went into administration.
The mother of four and participant on popular BBC television show ‘Dragon’s Den’ has invested in online retailer Easyart.com in return for a 20% stake in the business.
Elnaugh has taken over as chief executive from founder Simon Matthews who will stay on as an adviser.
“I wasn’t in any hurry to get back into business after Red Letter Days. I had a baby in July and was actually enjoying the time off,” Elnaugh told Startups.co.uk.
“But then I heard about Easyart through a City contact. Art is a great passion of mine and a thing I’ve wanted to do since I left school.”
Elnaugh, who claims Easyart’s sales have doubled since her involvement was confirmed, refuses to disclose how much she has invested but admits the company has already received £2 million venture capital cash in return for a similar equity.
Her immediate plans are to prepare the company for flotation on the Alternative Investment Market in 2007 as well as focusing on developing the off-line marketing and sales opportunities.
The 40-year old businesswoman hit the headlines this summer when Red Letter Days, the company she founded in 1989, collapsed. In a twist of irony, fellow ‘Dragons’ Peter Jones and Theo Paphitis purchased the firm.
At the height of its success Red Letter Days made £18m.
Elnaugh confesses it was her decision to step back from the company in 2002 and appoint a chief executive that ultimately led to its downfall.
This appointment, she admits, was a ‘huge mistake’.
“He came from a corporate background and was used to spending lots of money. People come from big into small business thinking it’s easy but it’s actually more difficult as you have far less resources,” she said.
Another reason for the company’s collapse, Elnaugh added, was betrayal. She revealed that she is currently writing a book in which she will ‘expose several high profile figures’ who let her down.
“I’ve learnt a lot about the ruthless world of business. Some people in it are hard and vicious,” she said.
Responding to the intense press coverage Red Letter Days’ collapse received, Elnaugh bemoaned the ‘bitchiness’ of the media. She complains that one particular Daily Mail journalist, who she refers to as a ‘little pipsqueak’, ‘really put the knife in’.
In the first episode of the new series of ‘Dragon’s Den’ screened on BBC2 earlier this week, Elnaugh was shown in a bidding war with Jones and Paphitis over investment in a wireless internet business. Jones and Paphitis won.