‘Twitter angel' backs tweet pitches with £0.8m
Twitter angel' backs tweet pitches with 0.8m
Dolan, who began his search for investment opportunities through the micro-blogging site in February, has invested a total of 800,000 in three entrepreneurs who responded to his call with 140-character tweets' explaining their business propositions.
After reading through hundreds of concepts, Dolan settled on three successful pitches: Raw Business, a Cambridge-based business publisher and entrepreneurs' network; Global Moguls, an online contest for creative talent looking to break into the music industry; and She Who Dares, a cosmetics brand.
The founder of SJD Accountancy, who is worth an estimated 65m, originally announced he had an investment pot of 5m to deploy. He says he's currently "seriously considering" investing in three more companies discovered through Twitter.
Dolan originally came up with the idea in an effort to find a use for Twitter: "Everyone seemed to be using social media. I couldn't get the hang of it. I thought if I used it to get business pitches I might get a decent deal out of it and see some business propositions without having to go through reams of paperwork."
While 140 characters was enough for Dolan to "weed out [everything] I'm not interested in and get straight to the good stuff", it didn't provide the necessary information to base an entire investment upon: "No one in their right mind would invest off the back of 140 characters."
Hundreds of tweets were whittled down to 50 concepts, which Dolan followed up with email exchanges. Approximately half of those received further investigation, but so far only six (including the investments) have warranted "serious" consideration.
Dolan said that there is often "way too much detail" in many of the business plans he receives. Distilling a business concept down to 140 characters is a more extreme incarnation of the elevator pitch idea, and he said it has been a successful way of generating investment opportunities.
"You could just place an advert in the Financial Times but this has produced a better volume of businesses than I'd get in any other way. Some of them might be smaller and more nave but you get some little nuggets in there," he said.
"It's not that I won't look at potential investments that come from a conventional route in future. But this has proved to be a good way of meeting some interesting entrepreneurs."
Unsuccessful pitches included an oil field in Iraq, an entrepreneur who wanted 2.5m for an adult industry company and an inflatable flood defence business that "was better than anything in the market". The latter fell down on its lack of a patent and high development costs.
Of the three companies he invested in, the most unconventional is Global Moguls, a South Africa-based music venture that blends an annual talent contest with an interactive website that allows users to vote for unsigned bands, photographers and filmmakers.
Getting through to one of two live finals, held in Cape Town and London, will depend on how users rate the songs online as well as how effective the band's creative team' is at marketing and promoting the music using social media.
It will be monetised through brands sponsoring the website and free to download songs, and the company will also have the option to take a 25pc cut of the future earnings of successful bands through a management fee.
"It's the antithesis to the X Factor," said Dolan. "We're trying to encourage people who write music. It's not a karaoke competition. We're trying to change the way the music industry works. The idea is exciting and there's a huge potential upside for not a huge amount of cost."
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