The value of business mentoring

Helping business start-ups is a rewarding activity for many retired entrepreneurs and (since selling his own company) it has even become the principal activity for Derek Barr, a business angel with a keen interest in early-stage ventures.

Having grown his own specialist engineering concern into an international business, with turnover of £25 million, he sold out to international engineering group GEA in 1996.

Barr has vast experience in training and developing successful executives and his involvement with the London Business School Entrepreneurship Summer School goes right back to the beginning. He has seen the Summer School change in form and scope to what it is today. For him, however, one key part of the programme has not changed – namely the role of mentors.

‘Many students to whom I have spoken have divided their MBA course into three sections, the first year, the second year and the Summer School. The Summer School gives students a unique opportunity to work closely with a mentor who knows exactly what it is like to be an entrepreneur and who can give individual support and coaching around a specific project of the student’s choice,’ Barr notes. ‘This individual coaching is not in any way academic, but it gives the student an insight into how to set up a business, the early pitfalls they may face and the judgements that have to be made to see if a business will be viable.’ Barr asserts that the skills gained can’t easily be taught in a lecture theatre, because they require a hands-on feel to be learnt and then used appropriately.

See also: How to mentor entrepreneurs by giving useful feedback – George Coelho looks at the notion of positive and critical feedback.

Barr says he is attracted to the scheme because of the appeal of working with lively minds and students with ideas in formation. ‘The mentor develops a focused relationship with an individual who is keen to learn and explore together,’ he elaborates. ‘Having a clear idea at the centre of the relationship and the work, ensures that it is real. A number of the students go on to start businesses with the Summer School project idea.’

Currently involved as a director and an adviser, respectively, for two businesses that developed out of the Summer School, Barr has enjoyed every mentoring experience. He believes that being a business angel who invests and actively participates in a business ensures that ‘one can exert a positive influence on the business and help to increase the value of both the initial investment and subsequent rounds.’ Of course, all angel investors hope to find the investment that will be the star performer, so there is disappointment at those that fail – especially as failures happen much more quickly than successes.

In Barr’s experience, a business requires three essential ingredients for success – a great and passionate team, a good and scalable business idea and a measure of luck. Why is it so difficult to pick winners from the outset? According to Barr, business angels believe that it is this last ingredient (luck) that can make the difference between a good business and a star performer.

Marc Barber

Raven Connelly

Marc was editor of GrowthBusiness from 2006 to 2010. He specialised in writing about entrepreneurs, private equity and venture capital, mid-market M&A, small caps and high-growth businesses.

Related Topics

Business Pitching