Interview: Stuart Hendry on Dragons’ Den, MBM role

TEN years ago, when Dragons’ Den was in its inaugural season, MBM Commercial was emerging as a stand-alone specialist advisor to entrepreneurs setting up new businesses. One of its clients from those early days was among the first to appear on air in front of the Dragons, and was by all accounts “lambasted”.

Stuart Hendry, new senior partner of MBM Commercial. Picture: Tina Norris
Stuart Hendry, new senior partner of MBM Commercial. Picture: Tina Norris

Fast-forward by a decade and it’s obvious that times have changed. No longer an unknown entity, Dragons’ Den is as much a feeding ground for nascent firms as it is a showcase for its high-profile panel of investors.

“I make a point of not watching it, but I have seen it twice this year,” says Stuart Hendry, senior partner at MBM. “That’s because two of our clients appeared on the programme this year and went on to get investment offers, but then turned down the money.”

Sign up to our daily newsletter

The first was Mallzee, the shopping app firm headed by Edinburgh entrepreneur Cally Russell. He walked away from a £75,000 offer on a programme aired in early February, and by July had secured £2.5 million of funding from a clutch of backers led by Royal Mail.

Just a couple of weeks later in the series, Flavourly founder Ryan O’Rorke initially accepted £75,000, but then changed his mind. His gourmet food delivery club used the publicity from the programme to raise more than £500,000 through Crowdcube on more favourable terms than those offered by the Dragons.

Firms such as these have been MBM’s bread and butter since it was created through a management buy-out from Murray Beith Murray, one of Scotland’s oldest private client law firms operating out of Edinburgh. But just as the market for start-up funding is changing, so too is MBM evolving.

The next stage of transformation will be led by Hendry, who in August was promoted to the post of senior partner. He replaced Sandy Finlayson, who led the buy-out in 2005 after establishing the operation as a sub-division within Murray Beith Murray.

Finlayson remains with MBM, though the 64-year-old is likely to formally retire some time next year. However, he is thereafter expected to retain an on-going role within MBM.

He played a key role in the formation of Archangels – Scotland’s oldest and most successful business angel syndicate – which in turn helped to cement MBM’s place in the start-up sector. Having introduced Archangels founders Mike Rutterford and Barry Sealey, Finlayson then put the duo in touch with Douglas Anderson, whose Fife-based eye care firm Optos would become one of Archangels’ first and most successful investments.

Archangels and MBM have gone on to raise funds for dozens more start-ups through the years, and Hendry says the firm will remain active in this core market. But as some of its clients have matured and grown, MBM has likewise spread its wings to encompass larger entrepreneurial organisations.

“Over ten years we have grown in numbers, but also in capability,” says Hendry, whose firm now counts six partners among its 30 staff. “Many of the companies we work for have been start-ups or spin-outs, but some are now multi-million pound turnover companies, and we have grown with them.”

MBM has additionally extended into services for investors, having set up the UK’s first angel-led enterprise vehicle – the £30m Seraphim Capital fund – in London in 2006. Such work now accounts for about 20 per cent of corporate revenue at MBM, whose turnover reached roughly £2.5m during the year to July.

“We are doing a lot more work down south, especially in London,” Hendry says. “Up here we are recognised as experts for early-stage technology companies, but down there we are known for setting up investment funds.”

Latest deals include the launch in May of a £45m fund for Passion Capital, the London VC’s second vehicle for investing in technology and digital companies across the UK. Hendry says MBM is currently putting together a £100m fund – its biggest to date – plus a number of others with an average value of £30m-£40m.

None of these will be based in Scotland, prompting Hendry to concede that there is “an opportunity for other investors to get more active in the market” north of the Border. However, he adds that firms with global growth ambitions will “go where the money is”, regardless of their home base.

MBM will focus on the question of growth capital at an investment conference to be held at the end of November on “Series B” funding – the next level of investment required to scale up an operation. Speakers will include Shane Corstorphine, chief financial officer of Edinburgh-based flight comparison website Skyscanner.

Looking further ahead, Hendry says MBM will continue to expand, with the appointment of a new corporate partner in London on the horizon.

“I don’t expect that will be our last hire,” he adds. “Over the next three years, I would think that we will probably add another ten lawyers.”


Born: Aberdeen, 1973.

Education: Aberdeen University.

First job: I am from a family of dentists and doctors. My father owned a dental practice that he took over from his father, so the first job I ever had was making false teeth.

Ambition while at school: There was always the family business that I had the opportunity of taking over, but that would have required me becoming a dentist. Ultimately, I have always been interested in the law.

Car: MBM are members of the City Car Club, and that has been a great thing.

Kindle or book? Book.

What inspires you? Most of the companies that I work for. The fact that they are entrepreneurs, and they have got get-up-and-go – it is a ‘can-do’ attitude.