Three years ago, 37-year-old entrepreneur Dan Collier had an idea to revolutionise the recruitment process by launching an online platform that would cut out agencies and match contract candidates directly with employers looking for temporary staff. Elevate Direct was an innovative and viable project but Collier still had to raise £500,000.
Coming up with the initial round of investment wasn't easy. Part of the challenge a startup faces is knowing who to approach. "We thought venture capitalists would love it, but we really only had a bit of code and, despite what VCs say, they want to see a million in returning revenue", says Collier. While VCs have the potential and appetite to deploy large sums of capital, investment in seed and early-stage projects is still relatively rare and competition is fierce.
Instead, Elevate Direct turned to The Angel Investment Network. Its funding needs were duly met by a number of 'angels', or high net worth individuals, who invested sums ranging from £50,000 to £100,000. As VCs have increasingly sought to back less risky, later stage projects, angel investors, with their relevant industry expertise and contacts, have become an invaluable alternative for startup capital.
"Raising that first half a million was time consuming and the investors were looking to test us and see how we'd cope with the pressure and the wait. But we held firm and then got not only the funding, but two major business figures, Tom Teichman and John Hegarty, joining our board", explains Collier.
Based in Borough, south-east London, Elevate Direct has soared on the back of its guardian angels. The first round of investment was over-subscribed and the business is now in the process of raising its second half a million through the same route. The company is experiencing growth of about 20% per month and now has more than 10,000 contractors on its database. It counts energy giant Gazprom, conglomerate Tata Group and online grocer Ocado among its clients.
In the long run, Collier and his chief technology officer, Mick Delaney, hope to roll out the Elevate model in other countries and haven't ruled out adapting the format for the lucrative permanent market. Collier's ultimate goal is to reform Westminster's recruitment model: with about 20,000 contractors employed, he estimates that he could save the UK government £1 billion over the course of a parliament.
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