Sally Chamley: Success in Securing Angel Investor Financing

| September 16, 2010 | 4 Comments
Sally Chamley

Sally Chamley, founder of Black Orchid Interiors

Finding the right investor to expand a small business is not easy. As Sally Chamley has found out, the process is long and tedious, requiring the right timing and lots of hard work.

Sally is the founder of London-based Black Orchid Interiors Ltd. , an Internet based luxury home interiors brand. Established in 2004, her company mixes a range of classic and contemporary furniture and home accessories for the discerning and affluent home furniture market.

After successfully running and growing her business using her own finances, Chamley this year secured £300,000 for her luxury furniture design business through Beer & Partners business angel network. Beer & Partners  is an established business investment agency with a database of some 1,700 active investors and over 300 smaller institutions. The company matches quality investors to businesses looking to raise funds, from those in early start-up phases through to IPO.

The Startup Years

In 2004 Sally Chamley was in her early twenties, and managing her own IT contracting business. She had started the business from scratch, and then grown sales to approaching £200,000 by only the second year of trading. Having built a good business the logical step was to continue managing it.

Sally however, far from motivated by her achievements, felt unfulfilled. Her childhood dream had always been to design and create her own brand of luxury furniture, and she knew that if she was going to pursue her aspiration, it was now or never.

In March of 2004 Sally met her husband John and they converted the family farm in rural Lancashire into what is now Black Orchid’s head office and warehouses. Whilst pregnant with her first baby, Sally established Internet business Black Orchid Interiors, selling luxury furniture and interiors of her own design.

From the very outset Sally knew what she wanted to achieve with the business. Black Orchid’s mission was to create a high quality, instantly recognisable, luxurious home interiors brand, leading its own exclusive designs available to buy online.

Sally worked tirelessly to achieve her goal, and invested a lot of her own money into the business. The result was that within three years Black Orchid Interiors had a turnover of more than £300,000. Her flair for furniture design had not only attracted a loyal customer base but also got her business noticed by the media, and she began to make a name for herself in the furniture industry. Quoted recently in The Financial Times alongside Nina Campbell and John Lewis, Sally’s reputation for knowing what luxury customers want continues to bolster the brand.

In the last three years, which have seen many businesses struggle to survive and disappear altogether, Black Orchid has gone from strength to strength. Shrugging off the effects of recession, the business continued to grow, and blossomed into an established brand, with a fantastic reputation and satisfied customers.

Growing the Business to the Next Level

By early 2010, Sally realized that in order to continue to grow her business, the next step was to secure external investment. Sally required £300,000 in order to increase production, fund her marketing campaign, and develop Black Orchid’s website. With bank lending at an all time low, Sally researched alternative funding sources.

Business angels emerged as the obvious answer, and after many hours of research and talking to other entrepreneurs, Sally contacted the UK’s leading Angel Network, Beer & Partners.

But she learned that the process of finding investors, and getting them interested in her business, was not easy. In fact, the first time she approached Beer and Partners, she was turned down! As she described the process,

“I would say it was 8 months hard work! Once I had decided that the timing was right, I went straight to the best! I first contacted a number of stock brokers in London, two of which recommended Beer & Partners for early investment of up to £2 Million. I spent one month writing my business plan and after much number crunching and researching my market I was ready.

The first time I contacted Beers I was turned down because the amount that I wanted to raise was seen as being too small. I tried again! The second time I was accepted to pitch my idea via conference call. Two associates in London were suitably impressed and decided to represent my business plan and broker me a deal. Beers see over 2000 business plans a year and only accept 250 to the next stage, so I was very excited. It was then an agonizing 7 month wait for the next investment fair. Beers hold two a year and the fair is packed full of hungry investors. Getting in that room is the hardest part.”

James Leay of Beer & Partners says,

“It was clear from the first time I spoke to Sally that the business really had something. Her passion and drive were evident immediately and she really knew every aspect of her business inside out. I was keen to put Sally’s business to our investors at the May investment fair where she met 12 experienced investors who wanted to continue discussions, within 3 weeks we had an offer for the full amount of investment.”

James worked closely with Sally throughout the investment process, helping to develop her business plan further, agree possible deal terms, and offering advice on pitching to Angels. So it came as no surprise to James when Sally successfully secured the funding she required, he explains

“We have a number of very active investors in the retail sector, and with Sally’s personality, Black Orchid Interiors track record and the large number of business angels who attend our investment fair, I was confident we would secure Sally the investment she needed to expand the business further.”

The business model, profitability of the business, and yes, even the owner’s personality are critical for securing financing from investors. As she explained what she thought made her business attractive to investors:

“An exclusive product designed and owned by the company is essential. Having it produced in a country overseas guaranteeing high margins and selling it direct to the consumer via the internet is also very attractive. This factory to consumer business model removes the need to offer credit so the company has no debtors and can grow fast. Operating in a growing market despite the recession is also vital.

The personality of the entrepreneur is also important, investors need to trust in the entrepreneurs ability to grow the business and transform into a Managing Director capable of working as part of a team that is ready for growth and vice versa. I received 7 offers from interested investors wanting to take negotiations to the next stage. I actually turned down one investor that I did not believe I could work with. The investor and the entrepreneur must have mutual respect to weather the next phase of growth.”

Sally accepted the offer for the full £300,000 from one sophisticated investor. She was delighted to receive both her money, and an expert business angel, who understands her industry and has been able to open doors for Black Orchid Interiors. Black Orchid is now on target to grow its turnover three fold in 2010 to over £1m.

Sally is now the lead designer on over 150 new lines of furniture expected to hit Black Orchid Interiors web site in October 2010. Her new styles include a new range of luxury furniture aimed at high-end interior designers and home ware connoisseurs. Also included is a lower price point in reach for those that love contemporary classic styles of furniture.

Sally says, “It was a pleasure to work with Beer & Partners. Having been used to securing funding with high street banks, it was refreshing to have a team of well connected people spanning years of experience both in business and with the city. These guys really understood what they were looking for in order to achieve the final investment.”

Sally now hopes to see her business grow from strength to strength. Having just secured £300,000 of funding, and with an expert business angel joining the board of the company, the future looks bright for Black Orchid Interiors.

contemporary home office furniture

Contemporary home office furniture designed by Black Orchid Interiors

Lessons for Women Entrepreneurs

Sally wants to share her story with other women, to motivate them to pursue their dream of running their own business, and encourage them to look to business angels for investment. Her advice to other women entrepreneurs looking for angel investors:

Grow your business to break even first. Entrepreneurs that have built turnover to breakeven and have a good business plan generate a higher valuation at the point of investment. Therefore you will not be expected to give as much of your equity shares away in exchange for investment. Make sure that you raise enough in your plan to comfortably achieve your goals, many plans fail due to being underfunded for the task ahead. It is also more difficult to go back for more money.

Get your mindset right before you go for investment. Be prepared to get real and start behaving as a team player in a much bigger game!

Finally, don’t be intimidated by an individual’s wealth if they are private investors. Growing your business to breakeven and having a good plan has already earned you respect in the investor’s eyes. Many investors remember how hard they worked to raise their first million!

Sally’s success demonstrates that even in the current climate, entrepreneurs with a good business and the right attitude can still grow. Only today it’s business angels, and not the banks, which are the first port of call for small business funding.

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  1. John says:

    Nice to hear a small company has secured some funding to develop and grow. I just wonder if the investors realist that Sally makes claims to designs that she has not made and makes this claim for furniture freely available from oversea suppliers ! Good luck !

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  2. Optoisolator : says:

    home furnitures that are based on hardwoods are the best thing that you can fill your home*-‘

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  3. Necklace Holder · says:

    home interiors with light colors gives a much happier environment ;;

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  4. Canon says:

    great story. i always knew it is hard to get financing, though never really fully understood how hard it is

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