EXCLUSIVE interview: Lincoln firm secures £1m of the £1.95M already invested into Lincolnshire

Lincoln print company YPP Group has secured a £1 million investment from the Midlands Engine Investment Fund (MEIF) to facilitate the launch of its latest subsidiary, Custom Gifts.

This comes as Foresight Group LLP (Foresight) announced two investments totalling £1.95 million into two Lincolnshire based businesses, Firetree Chocolate Ltd and YPP Group.

In early February, Foresight completed a £1 million investment into YPP Group (YPP). Based in Lincoln, YPP was founded by well-known local entrepreneur Stuart Maclaren, YPP provides a range of print and graphic design services, offering a holistic service from concept creation through to printing, finishing and delivery.

The investment from MEIF will be used predominantly to facilitate the launch of YPP’s latest subsidiary, Custom Gifts, and to help build brand awareness. YPP is expected to create an additional seven local jobs within the first 12 months following the investment.

Stuart Maclaren, Managing Director for Your Print Partner. Photo: Steve Smailes for CityX

Managing Director Stuart Maclaren spoke to CityX in an exclusive interview about the funding:

How did you find the process of looking for investment?

“Over the course of 6 months we went through a wide range of investment raising options, from crowdfunding through to overseas venture capitalists. With banks so unwilling to lend you have to explore all avenues if you want to secure substantial funding.”

You started the crowdfunding process, why didn’t that work out?

“Honestly, I think that crowdfunding works really well if your business is only an idea with no trading history. That way you can forecast some large sales figures based on having lots of money to spend from your investors. In reality, once you’re a business already trading it looks less exciting to an investor because the figures are a reality and not wishful thinking. 

“We raised a lot of interest locally and a few hundred thousand pounds was offered, but we needed a much higher figure for the business plan to be effective.”

How was the application process with Foresight?

“The initial process was easy to ensure the company would be eligible and then from there. many weeks of due diligence and legal process took place to ensure that Foresight fully understood the business, how it operated, what we do and where the money would be spent. It took longer than I thought it would, but a million pounds is a lot of money, so I wasn’t that surprised that they wanted to know the business inside and out and ensure that their money wasn’t going to be frittered away.”

What surprised you the most about the process?

“Two things stand out, firstly, that they told me half way through the due diligence that I would need more money than I had asked for. When putting the application in I thought best to only ask for the minimum amount I thought I might need, but Foresight prefer providing a more sustainable amount of funding so that there is more wriggle room for anything that doesn’t quite go to plan. 

“The other is that there is a lot of legal support needed to go through with an investment and I have to thank Wilkin Chapman for all their support and assistance with getting the deal over the finishing line as well as Alex Thompson from Smith Cooper who provided exceptional accountancy support.”

Have you had to change anything about the way you run your business now you have investors?

“The main change is that rather than being the single Director I am now recruiting a Board of Directors who will oversee and support the business as well as my own development. It can be daunting to suddenly not have complete control over your own company, but the skills, experience and networks that they will bring to the table is invaluable in my eyes and well worth the sacrifice.”

Do you have any advice for any other local businesses which might be seeking equity investment?

“I know that every business is different and that each has its own challenges, strengths and weaknesses.  So the main thing I would say is to leave enough time between when you start seeking investment and when you might actually need the money. From start to finish it’s taken me almost a year and that’s a long time, particularly for a young business to have to continue business as usual whilst also going through the rigorous investment process.

“Also you need to know your business, your industry and a full, detailed plan on why you want investment and precisely how it will be spent. It’s not good enough that you think it’s the right thing to do, you’ll have to convince several other people too and they’ll want all the data, statistics and research they can get.

“Finally, any business that’s less than seven years old should look into applying for the Enterprise Investment Scheme (EIS), which can make any equity investment a lot more attractive for investments due to some significant tax incentives.”

Foresight also completed a £950k investment into premium chocolate maker Firetree Chocolate Ltd (“Firetree”) as part of a £1.2 million funding round in late January.

Firetree was set up in 2017 as a bespoke high-end chocolate manufacturer.

Firetree: Simon Wright, Rich Spielbichler, Martyn O’Dare, Ray Harris, David Zulman

It has been successful in securing several prominent B2B supply contracts in the ‘super premium’ chocolate market, as well as securing two lucrative private label contracts.

Firetree’s ambition is to develop its own brand of super premium chocolate as a way of maximising shareholder value and returns.

As part of the deal, Firetree will be opening an additional office in Stamford, a move which will increase office capacity, and create eight new jobs for the area.

The investment from MEIF will be used to expand the sales and marketing team to further boost sales.

Commenting on MEIF’s investment, David Zulman, Managing Director, Firetree, said: “Firetree Chocolate is delighted to have Foresight come on board at this important phase in its growth cycle.

“Since the first chocolate poured off the line in early 2018, Firetree has collected an impressive list of B2B customers in both the UK and abroad.

“The product is well proven and well accepted. Its high quality and exceptional taste, manufactured from rare volcanic cocoa beans in its state of the art artisanal factory, sets it up to be well placed to launch its own consumer super-premium chocolate brand.”

Reflecting on these two investments into Lincolnshire, Ray Harris, Principal, Foresight Group, commented: “We are pleased to have been able to deploy this substantial funding into two great businesses in Lincolnshire and understand the impact these investments can have on the local economy such as creating new jobs for the area and attracting talent.”

Russell Copley, GLLEP representative, said: “I am delighted that the growth ambitions and drive of these two Lincolnshire businesses have been recognised and supported with these investments.

“Greater Lincolnshire is home to some fantastic businesses and we hope that these are just the first of a number of investments that the MEIF will be making across the area.”

Grant Peggie, Director, at the British Business Bank, added: “With the support of the Midlands Engine Investment Fund and Foresight, it’s good to see that small growing businesses across the Midlands are benefiting from the fund, generating economic growth and creating new job opportunities.

The Midlands Engine Investment Fund project is supported financially by the European Union using funding from the European Regional Development Fund (ERDF) as part of the European Structural and Investment Funds Growth Programme 2014-2020 and the European Investment Bank.