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His tendency to speak his mind has got him booted out of two companies, but it’s also won him widespread respect. Ken Olisa talks to GrowthBusiness about a career spent at the intersection of entrepreneurship and the City.
Come sun, rain or snow you’ll always find Ken Olisa immaculately dressed in a bow-tie. After all he does have an OBE, as well as being a freeman of the City of London.
Olisa’s 30-year career in the technology sector has taken him from public company boards to his own entrepreneurial ventures. He is currently chairman of boutique merchant bank Restoration Partners, which he set up in 2006.
The firm is his second stab at running a merchant bank, having successfully founded Interregnum in 1992 and led it through a £100 million IPO on London’s AIM in 2000.
Diverse though his business credentials are, Olisa is probably better known for his personality. He speaks with authority and erudition, more like a university professor than an entrepreneur. He’s also known for taking a firm moral stance on issues he cares about, an approach that has got him in trouble on occasion. Last year he was booted off the board of Kazakhstan-based Eurasian Natural Resources, a FTSE-100 company, after raising concerns about what he saw as the board’s lack of independence.
‘I am a City man in bone and blood, and I think it’s terribly important that the City is the place to go for foreign companies to raise money,’ he states. ‘I also think it’s very important that they agree to play by the rules of the City. Irritatingly, I am not in the majority in those two views.’
At Restoration Partners, Olisa says he is trying to bridge a gap between corporate strategy and corporate finance, helping entrepreneurs with everything from crafting a business plan to building up the sort of market expertise and contact list that is essential for any successful company.
Olisa’s experience at global technology companies such as IBM and Wang, and the time he’s spent running his own businesses, give him the ability to empathise with the struggles of entrepreneurs, as well as an appreciation of the corporate world.
He feels the climate for entrepreneurs has changed markedly since he began life at IBM in the 1970s, when starting your own business was deemed somehow ‘dodgy’ and tantamount to admitting that you couldn’t cut it in the corporate environment.
‘The needle has now moved and the attitude of government and banks has changed: this is now the era of the entrepreneur,’ he declares.
As an angel investor, Olisa is a firm believer in backing growth companies. His most recent investment was PeerIndex, a London-based company which provides a platform that allows companies to reach social media ‘influencers’. Its software identifies individuals who will spread ‘positive and impactful’ word-of-mouth messages about appropriate products.
In good company
Olisa was part of a group of angel investors in PeerIndex including former CEO of Thomson Reuters Tom Glocer and Stephen Klein, previously CEO of ActiveBuddy. Besides backing a business which he thinks has significant traction, Olisa is ingenuous enough to admit that sitting alongside such illustrious investors gave him a bit of a buzz.
With angel investors set to play a big part in the future of early-stage company finance, Olisa is keen for local investor networks to be turned into mini stock exchanges, allowing those involved to pass on tax reliefs when they sell equity stakes.
The modification would need a change in the rules of the enterprise investment scheme (EIS), where as it stands, tax reliefs are not transferable. Olisa believes that EIS-backed investments need more liquidity to take into account the fact that investors often need to cash in stakes for personal reasons.
Despite the fact that Olisa has used his own capital to back early-stage technology companies, he is a fervent believer that the first port of call for those seeking growth capital should be friends and family. Wasting time and spending nine months knocking on the doors of VCs who receive thousands of business plans a year is not the way to go, he adds.
‘If you have friends and family supporting you then you not only have the money but also a support network. If you get institutional money then you often don’t feel any particular moral obligation to it, more likely a deep irritation at having gone through the process,’ he says.
‘If you go through friends and family then you will have a massive moral imperative to at least return the money. It is the antidote to the personal guarantees that banks require.’
In his element
Olisa has built his reputation advising fledging companies such as Sorriso, Open Text and UDate, which was sold to USA Interactive for $150 million (£96 million) in 1992 after a long association with him.
He is particularly comfortable working with entrepreneurs such as Mel Morris, who has built two businesses with Olisa. UDate and PrevX, which provide online dating and network security services respectively, both benefitted from Olisa’s network and industry knowledge, helping to increase their value on sale.
Skin in the game
Now at Restoration, Olisa is turning investor. He and his team will be aiming to launch club deals with multiple high net worth backers. But there’s a twist: he will be looking for promising intellectual property (IP) that can be merged into established, but struggling tech businesses.
‘The buy-out sector hasn’t been successful in technology as a normally big buy-outs are for things like large fashion retail chains, while smaller deals are for engineering firms which possess capital and customers, not necessarily the £3 million tech firm,’ he explains.
‘We think we have got to a point now in the sector where if we can inject the innovation of a young venture looking for funding into that of a sustainable, but flat-lining business that already exists, then we can create something which has both innovation and sustainability.’
Olisa is well aware of what’s required to take a business to the next level. Having started off at computer hardware company Wang Laboratories in the UK doing various marketing and sales roles, he then moved to the US to head up marketing for the firm there. Upon returning to the UK as general manager Olisa attempted to lead a management buy-out of the division. The move was not a successful one and resulted in him getting the boot and ultimately setting up Interregnum.
In the following eight years Olisa built up Interregnum as a firm which helped companies develop branding, marketing strategy and business plans with a view to international expansion.
The company joined AIM in 2000, a stock exchange of which Olisa has plenty of experience. He was chairman of Voss Net, the first UK internet service provider to go public and one of the first companies to join AIM. As a bedding ground for fast growing businesses, Olisa believes that the junior market has experienced a somewhat cyclical journey.
‘I remember going to the first birthday of AIM; it was a stonking affair at some great city hall. We were all given these big vulgar yellow lapel badges.
‘It is hard to believe that at one year old they didn’t think they were going to survive long. Having such a big party at that stage was the kind of thing you do before the forces of darkness descend.’
The problems that AIM, and especially PLUS, are experiencing come down to a lack of coverage, Olisa reckons.
‘You start with the FTSE 100, and then move down through the FTSE 250 before you end up reaching AIM. When fund managers do their work they put most of their research into the higher markets, and by the time it gets down to AIM they don’t have the expertise that those in America have in NASDAQ.
‘The upshot is that neither investors or companies benefit from a rigorous analysis of businesses and AIM’s biggest challenge going forward is to get better expertise in the [nominated adviser] and analytical community so that it can get itself to be a more serious market.’
Liquidity will only come with a greater understanding of the businesses listed, Olisa adds, and that will only come when analysts do their jobs right.
Olisa’s AIM gripes are laid bare in his blog AIM4TECH which, as he puts it, tries to ‘cut through the jargon and carpet-baggers’ patter and bring unique observations’.
While he’s in a phase of life when the golf course holds more appeal for many executives than the board room, Olisa says he only plays two or three times a year. Given the extent of his other extra curricular interests, that’s not surprising.
He’s chairman of the British Basketball Association and senior board member of the Independent Parliamentary Standards Authority (IPSA), which had to deal with the scandal over MPs’ expenses that erupted in 2009 and is now tackling the issue of pay and pensions.
Olisa is also committed to philanthropy, or as he quips, ‘enlightened self-interest’, donating his salary from IPSA to charity. He is chairman of Thames Reach, a charity working to end street homelessness in London.
‘I think the way you treat the most vulnerable in society is a barometer of how civilised the nation is, and I want this to be a civilised nation,’ he says. ‘I like being respected for coming from the UK.’
Ken Olisa's vital statistics
Year of birth: 1951
Place of birth: Nottingham, UK
Family: Married with two children and two grandchildren
Hobbies: Golf, skiing
Best business decision: Deciding to float Interregnum at the height of the dot.com