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Food for thought

Spark the imagination

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AT SCOTT-MONCRIEFF we are serious about corporate social responsibility. We are keen to to integrate social, environmental and economic concerns into the firm’s culture by incorporating core values into our decision making.

We actively strive to support local communities and charities and many of our staff and partners volunteer in responsible positions, offer advisory support to charitable organisation and regularly volunteer to undertake a range of community and charitable activities.

We also organise work experience opportunities with local schools and assist individuals who are looking to build a career in their chosen field or looking to combine industry recognised qualifications with valuable work experience.

Our goal is to make a positive contribution to the society in which we live and work. Scotland’s future is in the hands of the next generation, and we want to make a sustainable investment in these young people. Everyone should have access to quality employment and be able to use the opportunities available to them to be part of a workforce that confident, skilled and effective.

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Our clients include a number of inspiring entrepreneurs, start-ups and high growth businesses and this means we regularly see the power of entrepreneurial spirit. Entrepreneurs not only contribute new ideas and developments to society, but also create new jobs for both themselves and their communities.

Often, they think differently, and tackle challenges in new ways. We want entrepreneurship to be promoted to create new businesses, new jobs, and new ideas for Scotland to grow and prosper. The most effective way of capturing this spirit is by instilling its values in our young people, who can be motivated to create their own ideas and start their own projects, if they have the confidence to pursue their ambitions – and we’ve seen from the success of our own clients that this can reap real rewards for both individuals and wider society.

That’s why we are so delighted to be sponsoring the Bad Idea competition in Edinburgh and Glasgow this year. The concept that there’s no such thing as a bad idea and that everyone, no matter where they come from, has the potential to generate that spark of inspiration to create a successful business is something we strongly believe in. 

 

Wemyss Stewart,
partner in Scott-Moncrieff and currently partner in charge of CSR

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Launch a new kind of social awareness

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Bad Idea is one of a growing band of businesses in Scotland which put social responsibility and business enterprise in the same envelope. 

Social enterprise trade to tackle social problems, improve communities or their environment. Like any other business, they sell goods and services in the open market but reinvest their profits back into their social aims or the local community.

The more-than-profit approach is enjoying support from many areas including Scottish and UK Government, lottery-funding, charitable trusts and foundations, business and individuals.

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Bad Idea is part of a selective group of businesses taking part in LaunchMe, an accelerator programme helping them attract private investment to scale up and increase their social impact.

LaunchMe, the first programme of its kind in Scotland, is a Big Lottery Fund initiative delivered by Firstport, Scotland’s development agency for start-up social enterprise.

Participants receive wide-ranging business support and help to secure private sector investment alongside Big Lottery funding to a level which enable them to reach financial self sustainability. Future profits are either ploughed back into the business or used for specific charitable purposes. No profits are distributed by way of dividends. The company also need to display that it makes a tangible difference to society. 

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My own interest in LaunchMe comes from many years of involvement with Scottish business angels. Scotland has one of the strongest business angel communities in the world and a strong track record in assisting start-up and early stage businesses achieve their ambitions. I’ve been greatly encouraged to see that a number of these angels are also willing to support sustainable social enterprises where the potential reward is significantly less in financial terms but significantly more in terms of supporting disabled, disadvantaged and disengaged people in society. 

Business interests and the needs of our society are often perceived as being at different ends of the spectrum but the reality can be very different. Many Scots businesses channel significant effort and resources into supporting local or national social needs although there is always more that can be done, particularly in the current climate of reducing central resources. Firms can contribute to the fairer society to which we all aspire by supporting, encouraging and trading with social enterprises.

The social entrepreneurs brave enough to embark on the risky road of starting up social enterprise companies are an inspiring bunch. They deserve support from those who can provide it and in turn encourage the growth of social enterprise in Scotland. 

 

Peter Shakeshaft
Business angel and Firstport board member

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Crowdfunding

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Levelling the entrepreneurial playing field

Crowdfunding is a new phenomenon taking the world of fundraising by storm; millions of dollars are donated every day to startups, community groups and charities. But the paradigm is in the way crowdfunding is democratising finance, creating opportunities for women and ethnic minorities.

Traditionally, women struggle to access finance from VCs, private equity houses and, to a slightly lesser extent, angel investors.

  • MIT research showed that men are 40% more likely to get VC funding with the samepitch as women.
  • Only 14% of venture capitalists are female, and women account for less than 8% of chiefexecutives and founders of VC-backed companies.
  • Just five of the FTSE 100 companies have female chief executives and women occupyjust 17% of board seats at Fortune 500 companies.

Numerous studies including those by the Global Entrepreneurship Monitor show that raising funds from traditional sources can be much harder for minorities and women. GEM women’s report says “Still, in nearly every economy there are fewer female than male entrepreneurs, and they appear to show reluctance to scale their businesses or to enter new and less tested markets. Yet is this down to will or down to the fact they can’t find funding?”

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The truth of the matter is that people invest in people they know and trust, people who remind them of themselves; when VC teams and investors are mostly men, then it follows that they’ll invest more in men.

A study done by Harvard Business School, University of Pennsylvania’s Wharton School, and MIT’s Sloan School of Business showed two video pitches for a business to 194 potential investors. The scripts for the videos were exactly the same but one had a female narrator and one had a male narrator. Only 32 per cent of people said they would fund the woman, compared to 68 per cent who said they would fund the man.

But compare this to crowdfunding:

  • On Indiegogo women are 61% more likely than men to meet their goals and womenaccount for 41% of small business, tech and entrepreneurial campaigns that reach their target.
  • 25% of all investments on Crowdcube are by women and 45% of Kickstarter backers are women. (statistics via Hubbub)

What’s key here is that women are actually edging out men in both the number of contributions per campaign, and the total dollar amount raised per campaign. On average, successful women-led Indiegogo campaigns eek out 1.3 more contributions than their male counterparts, and raise, on average 10.75% more money than campaigns run by men.

On Kickstarter, where backers make contributions in exchange for rewards, women-led companies account for less than 10% of technology projects. But roughly two-thirds of women-led technology ventures reached their fundraising goals versus just 30% of technology ventures with male founders.

The report "Gender Dynamics in Crowdfunding: (Kickstarter)," authored by Dan Marom, Alicia Robb, and Orly Sade reveals the following:

  • Women are more likely to fund women; about 40% of women’s investments went to women-led projects. Only about 23% of investments by men went to women-led projects.
  • The more influential women are in a founding team, the more female investors they’ll get; so women-only founding teams had a greater share of female investors than mixed-gender teams, and male-only teams attracted the fewest women investors.
  • Women raise less money, but this isn’t why they’re more likely to succeed; the average funding goal for women-led projects was about $6,300, compared to $9,400 for men. But when the researchers looked at matched pairs of projects – projects that were identical in category, subcategory, and goal amount – the women still were more successful than the men.

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So, why?

Crowdfunding is all about community, making women more likely to both launch and support crowdsourced businesses. Add in women’s natural inclination to rally around and support one another, and it makes sense that they’re a lot more successful when crowdfunding, rather than raising capital through traditional means. While there may be many reasons that women tend not to make as much money as men, it’s often touted that women negotiate less than men do. In crowdfunding, there is no negotiation. There’s also little or no risk (rewards/donation), it doesn’t cost anything to try or to fail. And even if you don’t reach target you’ve still achieved, you’ve still learned. But the things that women are naturally good at, such as team working, forming relationships, nurturing, supporting, sharing – are all aspects of social media, the foundation of crowdfunding, and part of the crowdfunding skill set.

International Monetary Fund’s Christine Lagarde, “All economies have savings and productivity gains if women have access to the job market. It’s not just a moral, philosophical or equal-opportunity matter. . . . It just makes economic sense.”

Promoting crowdfunding as an alternative funding source for women and minorities can create more new business starts, increase tax revenue, jobs, gender inclusivity and economic equality.

 

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The Future of Scotland

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Our vision is for Scotland’s people to build the most entrepreneurial society in the world.  It is the entrepreneurial, the innovators, the doers, the creators, the entrepreneurs, the entrepreneurs who create the most value, the jobs and contribute significantly back to our country.

We need entrepreneurial people to start, grow, change, renew all aspects of our economy; from start-ups to corporates, in Government, in education, everywhere.

It is all about people, as it is people who make the impact.  These people need connections.  We need to connect them together so they can share insight and experience, access new ideas, markets, opportunities, find the resources they need.  I have seen the power of connections first hand, as Entrepreneurial Scotland already has a Leaders’ tier of membership; people who are leading businesses and generating wealth in Scotland and internationally through innovation.

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We also need to connect the next generation.  For that reason, we recently launched a new Future Leaders’ tier at Edinburgh Castle for the next generation of innovators.  We are attracting talented, ambitious people from a wide range of backgrounds – all able to demonstrate their contribution to an enterprising activity within a business, social enterprise, charity or within the public sector in Scotland and are on a path to leading high impact enterprises.

Together with a shared passion for Scotland, we can build the most entrepreneurial society in the world.

Sandy Kennedy, CEO of Entrepreneurial Scotland
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BAD IDEA by Sasha (2014 participant)

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I found the whole Bad Idea competition really interesting as apart from making me think of the right idea, it also helped me realise all the practical things you need to do to get your business up and running. The idea came to me while I was on holiday with my parents and I watched people struggling to apply sun cream. I started by thinking that there must be an easier way and came up with the idea of the portable sun cream booth that effortlessly provides an even spray all over your body before you expose yourself to the sun. This could prevent people on holiday getting sun-burned which is so important because keeping your skin safe is a major health concern.

In 2010, 12,818 people were diagnosed with skin cancer in the UK, so hopefully we could bring this figure down significantly by the use of my machine. It would be easier and much more efficient to apply and re-apply sun cream and also potentially life saving.

Once I had worked it out I realised I would also need to make a prototype and do trial runs at beaches and pools as well as manufacturing and advertising the product so it takes a lot of work. I wanted to start this particular business because I know how annoying it can be to put on sun cream or even to get burnt and I really want this productto succeed because I see a lot of potential for it in a market.

I really enjoyed being part of Bad Idea because it made me realise that there’s a lot of different things I can do and running my own business is quite likely especially after this experience.

Sasha, 2014

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Shelby (2014 participant)

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A massive opportunity was offered to me since taking part in the Bad Idea competition of 2014 – Amy Rew was developing a girls’ club in Glasgow after working with the Girls Club which is based in New York. The idea is to bring the same relevant issues from New York to Glasgow and give the girls of Glasgow better opportunities.

A big thing was to open up the world of business to girls and give them a better understanding of how the world of business works. I’ve been working with Amy on how to become an ambassador and help out with the girls. I’ll be making workshops using the same plan and design used throughout the four days of the Bad Idea competition as a guideline to help the girls set up their own scientific idea for a new competition coming up. I’ve also been working with her friend Carol Cooke whose business Scrumptious Production works with film and documentaries. This will be my work experience in school to further develop my skills learned from Bad Idea to do better in the workshop. We’ve also spoken about opportunities to go to New York and work with girls there and talk them through my experience of the Bad Idea and my actual idea, leading similar workshops but with the girls in New York.

Taking part in the Bad Idea competition totally altered my view on how achievable having your own business and working for yourself is – I changed my whole view on my career path and now just want to make my own business.

The benefits of participating in Bad Idea go way beyond just making a plan for a competition,  the skills you take from it are so beneficial and relevant to the rest of your life whether you’re interested in entrepreneurship or not.

Shelby, 2014