An interview with Three Sixty Entertainment’s Colin Wilkinson
The co-founder of theatre production company Three Sixty Entertainment on raising £2.75m and delivering an extravaganza
The Startups Awards judging day usually provokes impassioned debate when it comes to the vote for company of the year.
Previous years have seen things get a little too heated for comfort as the entrepreneurs and industry leaders put forth their opinions on why this or that company deserves the crown. It was all change for the 2009 awards however.
The winner, Three Sixty Entertainment, got such a unanimous seal of approval that the judges headed off to the pub a good two hours early. Business pages have bemoaned the lack of finance and investment nearly every day of the year so you'd be forgiven for thinking that launching a £2.75m funding round in January 2009 was somewhat optimistic.
And yet this tented touring theatre production pulled it off in just four months from a record collection of 58 separate angel investors. Stress levels may have been high, but co-founder Colin Wilkinson insists it was one awfully big adventure.
Financing the dream
Colin joined the project several years in but it's undoubtedly his financing expertise and commercial insight that has turned the production into a phenomenally successful, scalable business.
The concept for the tented production which uses CGI and 360 degree projection to place the audience at the centre of the action was the brainchild of theatre producers Mat Churchill and Charlie Burnell.
The pair wanted to bring the story of Peter Pan home by placing their temporary theatre in Kensington Gardens, where much of writer JM Barrie's inspiration for the story had come from.
Having already submitted a 95,000 word planning proposal to the council and park authorities, Mat and Charlie had only managed to raise £85,000 of the total figure needed to start production when they got in touch with Colin.
Serial entrepreneur Colin, who runs business turnaround firm Incubation Ltd, was well used to being asked for business advice but when Mat and Charlie approached him through a mutual contact he was genuinely impressed.
“When Mat phoned me it was like a clarion call,” he says. “I was busy doing my own projects but I thought the idea was brilliant and the clarity of the thinking really impressed me. I could see this was a special case and I told them I was interested in coming on board.”
Colin had run several businesses prior to Incubation Ltd, including VMC, the video conferencing business he set up with Noel Edmonds. He'd also raised a seven figure sum just a couple of years prior to Three Sixty for an entertainment business in Venice.
Mat and Charlie had tapped out the small community of theatre angels without scratching the surface of the funds needed so Colin suggested turning the venture from a single show into a touring production company, thus providing them with a scalable business.
“The percentage of people who invest in theatre is tiny compared to the percentage who invest in generic business propositions,” explains Colin. “If a show makes a million and you own 10%, that's great – you've got £100,000 in your pocket. But if you've got a chunk of a business that makes a £1m a year you might expect an exit value five times that.”
Touring shows such as Cirque du Soleil have already proved there's international scope for big spectacle shows, and with more than 100 places around the world to take the kind of production, the reach far outstrips anything that can be performed on a West End or Broadway stage.
But in January 2009, when Three Sixty hit the streets looking for funding, the collapse of Lehman's was all over the news and investors began to recoil in horror as the financial world fell to its knees. But Colin had the stats to back up his proposition.
The live family entertainment sector was booming in spite of the recession, which made for a great opening to Three Sixty's finance pitch.
However, while the business model was sound, and the offer was an attractive proposition for investors looking for a safe bet, the team were up against a seemingly impossible deadline.
“We had to produce the show while raising the money,” says Colin. “A lot of people were sceptical not so much about whether we could raise the cash but whether we could do in time.”
To keep the project alive Charlie created a week-by-week production and cashflow timetable which detailed which suppliers and contractors needed to be payed on each date. “We would wake up on a Monday morning and have a target of raising £47,000 to be able to last the week. Something about that process was really galvanising.”
The pitching was done through a mixture of phone calls, emails and face-to-face presentations in front of groups of investors. Colin already had an extensive contact list of investors from previous ventures which helped get the process off the ground.
“We probably put the proposition in front of about 1,000 investors altogether,” says Colin. “For the first three months I rarely got to bed before 3am and at least once a week I'd work through the night. When people went to bed in London, I'd get on the phone to LA and Australia.”
Given the ‘fairly grown up amount of money' the team had to raise, they also decided very early on that it was important to bring on an executive chairman that could reassure investors their money was in good hands. That comfort came in the form of Henry Meakin, the FTSE 250 chairman who launched Classic FM.
Stop the press
Something that also proved very successful in capturing the attention of potential investors was a full page spread about the show which featured on page three of the Evening Standard two months before launch. The piece sparked interest from several other publications including a slot on the BBC news and a piece in The Observer which listed the show as one of the top things to look forward to in 2009.
The invaluable PR coupled with a very carefully spent advertising budget meant thousands of pounds' worth of tickets had already been sold for a show that was still months away from launching. News that Charles and Camilla has committed to a Royal Gala performance of the show added to the buzz, and as the hype surrounding the it snowballed, the team's pitch became increasingly impressive.
The show launched to a rapturous welcome and was the stand-out smash hit of summer 2009, outselling West End hit Mama Mia!. The Kensington Gardens run ended in September and Christmas 2009 saw the tent move to the Millennium Gardens next to the Dome.
Three Sixty Entertainment became operationally profitable from the second week after launch and turned over close to £7m in its first year. The show will head to San Francisco in April 2010 where it has already secured a prime seafront location for the tent.
If all goes well, the show will move to Australasia and the Far East later in the year, and further children's texts are already being adapted for the Three Sixty experience.
“Here I am a year after starting and it's hard to remember just how hard it was to pull it off,” says Colin. “But we created something that captured the public's imagination and for me, it's been a complete adrenaline rush.”