Business interview: Jock Millican, Linc Scotland

He was a member of the team that had beaten Ireland and Wales, but lost to England at Twickenham to be denied the prize. To add to Millican’s pain, he was carried off with concussion.

Millican’s international rugby career yielded three caps and he has retained a life-long association with the game, currently as a non-executive director of the Scottish Rugby Union.

Since ending his playing days, he has built a career in business, mainly in the brewing industry, and these days he acts as a business adviser. This week he becomes chairman of Linc Scotland, the umbrella group for the angel network.

Business angels, or wealthy private investors, have taken a key role in providing funding to firms that are no longer able to rely on the banks. Support from Linc members rose 13 per cent last year to £13.76 million but the figure did not truly reflect the scale of the increase as the previous year included two large deals involving venture capital.

Millican believes Linc provides a vital role as a facilitator, pulling together angel support from among 19 Scottish syndicates, helping to develop best practice and lobbying the authorities.

“We are a voice that is listened to,” he says. “and over the next few years there will be new challenges, depending on what happens with the independence referendum.”

Linc marks its 20th anniversary this year and Millican is looking to broaden its support from grant aid to self-funding, perhaps a not unreasonable gesture since it represents some of the wealthiest individuals in the country, and he is looking at marketing some of the intellectual property the organisation has built up over the years.

He questions the orthodox view that Scotland does not create enough entrepreneurs and businesses and insists that the government-backed institutions are providing a solid backbone to building the economy, essentially through new financing initiatives.

“What Scottish Enterprise does through the Scottish Investment Bank is super,” he says. “They are prepared to invest in deals which brings the angels in. I don’t think we are struggling to set up businesses. I am seeing eight to ten high growth firms a month.”

But few actually get financed. The total number of investments rose slightly last year from 78 to 82 and the number of companies from 56 to 59. Twenty companies were new to the Linc portfolio last year against just 13 the year before, an average of one per syndicate, indicating either a low number of applicants or a rigorous selection process.

Millican errs on the latter explanation, arguing that the angels are now also providing more second-round funding to firms that are unable to access it from the banks. “Angels are having to step into the breach,” he says.

It is one reason for having an organisation that can bring syndicates together in order to raise funds on the required scale. Angels have also been able to move quickly.

“It is taking too long for companies to get money from the banks. I hears of one case where it took four months for the bank to say no. Getting overdrafts is difficult.”

He accepts that the banks are making progress and have sponsored a number of growth projects. Royal Bank of Scotland, for instance, is backing the Entrepeneurial Spark initiative, but Millican believes that the relationship between Linc, the syndicates and the banking sector has suffered. “It is not as good as it was prior to the banking crisis. The banks are willing to talk, but it is getting them to do something.

“I find it frustrating for the businesses we deal with and we now have to factor this in. Yes, the banks need to be more prudent, but a lot of the bad lending was property-led and it is the small firms that are now struggling.”

He says the UK government has provided some support through schemes such as Funding for Lending, which is starting to come through, and the Seed Enterprise Investment Scheme introduced in last year’s Budget. The European Union is also offering more support.

“Red tape is still an issue for firms, particularly some of the employment requirements.”

But in spite of the obstacles put in the way of individuals, he sees no let up in the desire to set up a business.

“The enthusiasm of people who are setting up a business is amazing. It is one thing that gets me up in a morning.”

His own career in business was launched on the back of studying for a diploma in brewing at Heriot-Watt University, following a degree in chemical engineering at Edinburgh University.

He worked for Bass for three years and Scottish & Newcastle for 30, which saw him based in Edinburgh, Manchester and Newcastle in a variety of operational roles.

He spent three years as a director of the Freight Transport Association and two years ago was an interim chief executive of the SRU pending its recruitment of a full-time officer.

He set up Millican Associates, a management and mentoring consultancy, in 2006 and Equity Gap, his own business angel syndicate in 2010. He has sat on a number of boards and is a consultant to Gardening Leave, a charity providing horticultural therapy to sufferers of post-traumatic stress.

It was his involvement with helping provide advice to small firms that got him into the angel world.

“They all work in a slightly different way and I felt there was space for another syndicate,” he says.

He reckons there are probably around 2,000 individuals contributing to the syndicates and sees Linc as the glue underpinning their efforts. It is an unregulated sector so he believes it needs something to oversee activity.

He succeeds Peter Shakeshaft as chairman on an initial three year tenure and expects the role to occupy him for two or three days a month. It carries a small remuneration.

Angel investing is a medium- to long-term game but he would like to drive more exits on behalf of investors. “Typically they understand they are putting their money away for between five and ten years but because of the economic conditions the number of exits has been slower,” he says.

He does, however, see signs of more opportunities for trade sales as sellers and buyers become more realistic about values.

30 second CV

Born: Reston, north-west of Berwick-on-Tweed

Age: 61

Education: Berwickshire High, Edinburgh University

Ambition while at school: Can’t remember

Car: Honda Accord Estate

Kindle or book? Kindle

Favourite film: Chariots of Fire

Can’t live without: My BlackBerry

Claim to fame: Three rugby caps for Scotland

What makes you angry: Jobsworths

Best thing about your job: Working with young businesses