S Kalyana Ramanathan / London February 19, 2010
James Layfield is offering a 10% stake in himself
With an abundance of business ideas and frustrated with lack of funds from regular banking sources, a British serial entrepreneur is trying a novel business model. He is offering a 10 per cent stake in himself for £1 million, valuing himself at £10 million.
Thirty-six-year-old James Layfield, who has three profitable businesses under his Never Ever Limited banner, says the idea came to him as a flash on his last birthday while he was cycling.
Bankers, he feels, were nitpicking on minor details of his business proposals while he was trying to sell larger ideas. That is when he decided to appeal to investors who can see the potential he holds as a businessman capable of generating serial ideas that could be rolled out into successful businesses.
Under the terms of this new and unique offering, Layfield has put on the table a 10 per cent stake in himself, which would mean, a prospective investor would get this stake in any business he floats in the future. He admits he expects investors to take a leap of faith, but cushions any major risk in this proposal with a buyback offer at four or five times the value of the original investment over a four- to five-year period. This, he says is a two-way deal, where he can also be at a liberty to buy back the stake from any investor.
“The market is flooded with opportunities in today’s conditions. It is to see how I can help investor’s see the opportunities,” he says. He believes that selling a stake in one business would mean that investors would have to place all their bets in one basket. By offering a stake in himself (and therefore all his future businesses) the investor is well insulated he says. “(Sometimes) the idea itself is the barrier. Small things can put you off.”
He is currently in talks with two or three investors. Though one investor has agreed in principle to invest 2.5 per cent of the 10 per cent Layfield is offering in himself, he wishes to close the 10 per cent stake sale in one shot. So until he finds a buyer for the remaining 7.5 per cent the first investor has been put on hold.
As a dyslexic, Layfield says he was an academically average student, and recollects his schooling days with some distant frustration. His success as a businessman has clearly overshadowed his previous academic life.
The source of Layfield’s unorthodox idea is — not surprisingly perhaps — the maverick British businessman Richard Branson. Before starting his own business, Layfield worked for the Virgin Group’s founder for five years. After joining Virgin Student (one of UK’s earliest social networking sites) as marketing director, Layfield soon went on to head this business as its managing director, becoming the youngest-ever head of a Virgin business. Together with a partner, Layfield later bought the business from Virgin, and re-branded it
In 2006, he established Escape Airports Ltd that had set up a membership-based lounge at JFK airport in the US. This business was sold in 2008. Layfield has been listed in the 2008 and 2009 editions of Who’s Who of Britain’s Business Elite. He was appointed membership chair of the Entrepreneurs’ Organisation UK in 2009 — an organisation that helps leading entrepreneurs learn and grow.
Layfield says he sleeps with his iPhone next to him. “Just to make a note of some fresh idea I may get in the middle of the night,” he says. Does he still look up to Branson for advice? He says he is still in touch with his former boss. “I spoke to him last week, when I had some problem with my broadband provider Virgin Media,” he remarks with a laug