A laptop, some good contacts and a mobile phone. At a push, throw in a Gorkana subscription too. That's all PR agencies need to get off the ground these days. Nick Band and Mark Borkowski, however, clearly disagree – the PR entrepreneurs are planning to invest a cool £100,000 in return for a stake of up to 51 per cent in a team with the "best business plan for a new agency".
Their 'Flying Start-Up' competition has been dubbed a Dragons' Den-style contest, because it involves entrants pitching their bright ideas to a panel that includes representatives from the PRCA, Gorkana and The Foundry, as well as Band and Borkowski. Yet the level of equity that’s taken from the scheme’s winning founders would make even the notoriously tough-negotiating TV entrepreneurs blush.
The terms of the competition appear to fly in the face of one of the key principles of angel investing - never demotivate the founding team. That includes not leaving founders who've just come up with a belter of an idea owning less than half of their business before they've even got started.
A successful Flying Start-Up team could find Band and Borkowski have a controlling stake in their fledgling venture before the would-be entrepreneurs have had a chance to dust off their little black books. "Any investment for more than 45 per cent of your business is insane unless it's a turn-around, restart, or salvage," is how one experienced venture capital responded to the launch of the competition yesterday.
Even if the terms on offer aren't a turn off, since when did an idea stage PR start-up need £100,000? Unless the winning founders are planning on paying themselves fat cat salaries, renting shiny offices and enjoying champagne-soaked, Ab Fab-style long lunches during their formative months, there's no reason why they can't get up and running for a fraction of that.
Perhaps the organisers have never heard of 'bootstrapping', the principle of keeping costs to a minimum at launch. With the rise of an array of free web tools, even tech start-ups, let alone PR firms, can get going on a shoestring now.
No entrepreneur likes giving away equity, so it's hard to understand why a start-up PR business - a sector in which new firms have rarely required much outside investment to reach self-sufficiency – would want or need to give up such a huge slice of the pie in return for an investment they probably don't need.
Those with an idea good enough to win the competition will probably also have the wherewithal to source the funds to launch their venture themselves - and make sure they remain in the pilot's seat in the process.
Frankly, for most PR start-ups, applying for a modest bank loan is a cheaper and more sensible option than entering the Flying Start-Up.
James Hurley is director of content strategy at Albion Drive and former enterprise editor of the Daily and Sunday Telegraph