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Investor Spotlight: James Merryweather, KM Capital

In Planning growth, Raising finance, Rapidly scaling - 5 months ago - 4 min

Investor Spotlight: James Merryweather, KM Capital

Every month we talk to an investor from our network, who invest in early-stage businesses seeking to raise up to £10m in equity and debt finance. This month we spoke to James Merryweather from KM Capital.

James’ role at KM Capital involves assisting Adam Kamani, Stephen Morana and Mahesh Patel in deal origination, investment appraisal and on various other key elements of the investment process.

James is a qualified member of the ICAEW with eight years experience of working in finance and related industries. He works with businesses across many sectors and of numerous sizes advising them on corporate transaction services, business funding and strategy, compliance, and deal advisory predominantly in the Manchester M&A market.

Could you tell us a little bit more about KM Capital?

KM Capital is predominantly a Seed and Series A investment fund which provides equity finance to exceptional teams who are solving a problem in sector we are familiar with. We have a fresh approach to investing and have conversations across a huge variety of sectors.  We have invested into a leading football agency, a subscription beer company and many in between.

The fund’s Managing Partner is Adam Kamani, who also heads the award-winning Kamani Property Group as its CEO.  The Kamani family is an entrepreneurial success story, which Adam continues to embody.

The fund draws heavily on the experience of its two other partners, Mahesh Patel and Stephen Morana, who are successful senior executives with significant experience in fashion, eCommerce and a wide variety of successful businesses and ventures.  Stephen guided Betfair and Zoopla through IPOs during his tenure as CFO of both businesses, and is a serial early-stage investor in his own right.

I oversee the fund’s daily operations, being the first point of contact between KM Capital and fundraising companies.  I am developing close relationships with our investees having recently joined from a regional general accountancy practice, where I operated in the Corporate Finance department having qualified as a Chartered Accountant through the ICAEW.

How big is your portfolio? And how much do you typically invest?

We have deployed approximately £1.8m to date across 14 different businesses, and intend to invest between £50k – £300k in each business we partner with

We are looking to identify innovative and disruptive tech-based businesses, especially those with a strategic fit with the other businesses with which we are connected.

Working with early stage businesses and such innovative entrepreneurs is an exciting space to be in and I am privileged to be a part of the team at KM Capital.

What are the top three things you look at when considering a new investment?

First and foremost we want to work with entrepreneurs who share our values – we are humble and know we can’t know it all.  We are always open to suggestions on how to improve and welcome feedback from those we work with.  We want our entrepreneurs to be passionate in the extreme about making their business succeed and be focusing 100% on the task at hand.  Finally, stepping back from the team and the finances, we want our businesses to be addressing a relatable problem or pain point which will bring real benefit to users of that business.

Are there any companies you’d like to highlight that you’ve worked with?

Nkoda could be a game-changer for musicians globally. The company has forged relationships with major sheet music publishers and operate a subscription model whereby musicians can easily access sheet music through the Nkoda app.

All of our investments are progressing well though and we are excited to see what they will go on to become.

Any companies that got away that you wish you’d backed?

We know there will be businesses we don’t invest in who go on to be successful but successful entrepreneurs link up with investors who add value and they work well with.  There’s probably businesses out there we could have made successful if we’d have been the strategic investor, and there will be other investors out there who can add more value than us in a given area. We are firm believers that we need to add value to our portfolio and aren’t just here to provide cash.  We have a huge network of contacts, experience and other business interests we can add value to the right company with.

What are the big red flags for you when reviewing investment propositions?

Attempting to build a business around a weak problem, lack of business acumen amongst the founding team, a pitch with either poor market research or poor research into how much investment is required to execute the plan.

I wish I saw more…

Female entrepreneurs.  Only one in fourteen of our investments has backed a female entrepreneur and we would like to see more women in business.

I wish I saw fewer…

Unreasonable forecasts and valuations.

What I wish I could tell every founder…

You have to have respect for anyone willing to take the risk of starting and building their own business. I’m not an entrepreneur so can only speak from a financing perspective – I would recommend founders ensure they’ve researched in detail what a potential fund expects to see when a business pitches to them, as there are thousands of impressive businesses out there competing for funding.

You need to be a market expert when pitching, and keep in mind you are ultimately sitting in front of someone asking for a huge sum of money.  Therefore you need to have fully researched why you need their cash and expertise and know precisely what you’re going to do with it.

How should a business seeking finance approach you?
We are happy to be approached through invest@km-capital.co.uk or through our website km-capital.co.uk.  Just let us know who you are, what you’re doing and attach an investment presentation.

If you are thinking about raising investment for your business and want to understand your options, get some free guidance from one of our team today on 08081 722350 or drop us an email: G.Enquiries@uk.gt.com