Financing The Future – Velox Mentoring Mossbourne.
Do you remember your first business idea and thinking “where do I even start if I want to get this off the ground”? Similarly, have you ever considered being on Dragon’s Den, and if so the anxiety of pitching to such high-profile investors, let alone the fear of being watched by thousands on TV?
For most people such ideas live only in the mind. Not so the brave students from twelve different Academies who boldly volunteered to participate in The 2023 Livery Academy Awards, a competition designed to help stimulate business and entrepreneurial skills amongst sixth-form pupils. The students remit being to pitch to ‘investors’ to raise up to ‘£500,000’ to launch a product or service which can be commercially successful and generate a material social benefit for customers and/or society as a whole. These ‘investors’ being a distinguished panel of judges (5 highly successful entrepreneurs led by Tim Campbell MBE, the first winner of Sir Alan Sugar’s The Apprentice) as well as 150 guests, and the ‘£500,000’ being entirely theoretical (very sadly for all involved).
Created ten years ago by The Worshipful Company of Grocers, one of the oldest Livery Companies in the City of London, the Livery Academy Awards programme was designed to help nurture the entrepreneurial spirit among the next generation of bright young Londoners, as properly reflective of the Company’s historic role in the lifeblood of London’s commerce. Since 2013, three other Livery Companies joined the fold; The Haberdashers, The Merchant Taylors and The Drapers. Round 1 of the competition sees three Academies battle it out at each Livery Hall to identify a ‘regional’ winner, before the Grand Finale between the respective winners at Mansion House in front of the Lord Mayor of London.
For a busy sixth-form student, it’s no easy task fitting all of this into your schedule, let alone getting your head around balance sheets, company logistics or brand-building. As such, each Academy is paired with professionals from the advertising sector and the finance industry. Step forward Mossbourne Community Academy, a coeducational secondary school and sixth form based in Hackney. Step forward BBH, the British global advertising agency. Step forward Velox Capital Partners (specifically Elina Kovaleva, Saarthak Chhabra and JJ Jardine-Paterson). Thus began a close working relationship that ultimately took Mossbourne (as well as BBH and Velox) all the way to Mansion House.
This relationship involved detailed teamwork in which the mentors learnt from the students, the students learnt from the mentors, and everyone shared ideas and experiences in order to forge a business that might stand the test of time. All of this done with the ‘investors’ scoring criteria in mind; 40% for commercial potential, 30% on Q&A performance, 20% presentation and teamwork and 10% for originality of idea. Whilst this piled the pressure on the Velox Team to make sure Mossbourne’s business stacked up from a P&L perspective, it also laid the ground rules for our interactions; We needed to ensure the Mossbourne students had a deep and coherent understanding of every aspect of their business and could articulate it in a manner that would impress even the most sophisticated investors.
Mossbourne’s business idea was simple: Take surplus inventory from large clothing brands, de-label it and sell it on at a more affordable price. This creative approach was not only designed to take on the issues of fast fashion but also encourage consumers to make intentional purchases based on their actual needs rather than mindlessly following advertising trends. So it was that “CLOZO” was born, embodying the company's motto of "de-labelling society".
The challenges of starting a business became apparent over the subsequent few months in which regular mentoring sessions became a fun and normal part of our weekly schedules, so too the questions that every budding entrepreneur needs to ask: “What is primary market research? How do we actually build an App? What is an income statement? Which of us should be CEO, CFO, CTO? Who are our competitors? How will our business actually make money? How do we model growth? What are our fixed costs? How do we control costs? How do we value our business? Do we need to ‘take’ the full £500,000?”.
As public market investors, it’s easy for professionals like Velox to get caught up in the complexities of large, listed businesses with multiple business lines, complicated financial models and erudite business jargon. It’s rare being brought back to simple concepts, fundamental processes and clear English. And yet, being taken back to basics by a team of highly intelligent students reminded us that the initial building blocks of any business are just as important as the final shining product itself. While this sometimes took a little longer to sink in with the students, especially building financial projections, we eventually had a business that looked good, did good and was profitable. However, would the judges think the same??
Before presenting to the judges, the Mossbourne students reached out to a variety of participants in the fashion industry for external validation. The CEO of Common Objective, a community of over 60,000 members whose common objective is ‘great fashion products that value the people who made them and the planet’, summarized the CLOZO pitch nicely, “Thanks so much for sending this proposal through. I think the fashion industry needs you and your team! There are some brilliant ideas here. Your idea fills a gap, and would be a no-brainer for High St retailers, especially given your proposal to collect stock”.
Thankfully the Judges came to a similar conclusion and after two very tightly fought competitions, one at the Grocer’s Hall in November 2022 and the subsequent Grand Finale in January 2023, Mossbourne Community Academy (as well as their teachers and mentors) were crowned overall 2023 Winners.