The founder of online electricals retailer AO.com has said he would not hesitate in having another flotation – but admitted he would get a bigger “flak jacket” to deal with the brickbats.
John Roberts found himself at the centre of constant media attention following the 2014 flotation, which valued the business at £1.2bn with an initial share price of £2.85.
The share price has dropped to £1.20p and the entrepreneur sparked a flurry of stories when he reportedly said he wouldn’t leave his multi-million pound fortune to his five children.
But Roberts, who spoke at a recent digital summit called by Greater Manchester mayor Andy Burnham, said the IPO remained the absolute right decision and had paid for the company’s expansion into Europe.
The businessman, who famously founded the Bolton-based retailer after a £1 bet in a pub with a mate, said too often the UK’s media dwelt on the negatives and urged the country to follow the example from the West Coast of America.
“When you’re a young start-up it’s very difficult to attract that talent because they don’t want to join a small business when they’ve got lots of opportunities elsewhere,” he said.
“The other challenge from a capital perspective is getting people to back a crazy dream and think big. As a nation we don’t do that. If you go to the West Coast of the US they are really happy to place lots and lots of bets. They’re happy to invest in the long term in early stage ideas.
“From a press coverage perspective we talk about ‘it’s not making any money yet. They’ve been at it for three years’. Whereas in the US they’ll celebrate the progress they’ve made. They have a lot more blind faith than we do.
“Getting the best people and the capital and bringing them together; it’s no accident that all sort of happened on the West Coast and it’s a magnet for talent and a magnet for the capital.”
Roberts said the reaction to the 2014 flotation was a “perfect example of British press”.
“We would absolutely do it again,” he insisted. “It gave us the money to go and expand our business into new categories, to new territories, to launch our business into Germany and the Netherlands. We could not have done that if we’d not raised the capital.
“We don’t set the price of the business on the market. Very experienced investors do that. It was 11 times over subscribed. Our original investors might think they got a raw deal on that because we probably could have got them more.
“Then the focus becomes ‘how much you made out of it’ and not ‘what can it do and what it can help you build’. Would we do it again? Yes, but I would have probably got a slightly bigger flak jacket.
“There are very few examples of a UK business exporting efficiency to Germany. We are one of them. We can deliver a washing machine to any postcode in Germany and install it faster than Deutsche Post can deliver you a letter and they’ve been at it a while.
“Those things don’t just happen overnight and they don’t happen for free.”