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Lessons learnt from losing $250m…



In business it is often said that any decision is better than none. Even a bad decision can move you forward. It’s probably a good theory, but some decisions can be really, really expensive. One specific decision we made ended up knocking $250m off the market capital of our business and nearly ended up costing us everything we had.

The Idea
In 2015 our little company started working on a project that we believed, and still believe, will change the landscape for small businesses around the world and enable them to compete with the big boys, win bigger contracts, hire more senior people and reward those that are creating the most value. The idea, which we called ‘agglomerate’, was to create a publicly listed company and allow great small businesses to swap their private stock for public stock yet keep full control of their own entity. A collaborative IPO but leaving the entrepreneurs in charge and incentivised to build their business.

We knew it would be tough to get it up and running. It was. We thought once it was up and running it would be much easier. It wasn’t.


The Glory Days
As you can read here, after many false starts, we finally managed to get the company listed. What came next over the following quarter was pretty exceptional. As we announced deal after deal bringing in great companies to the group the model snowballed in front of our eyes. On the one hand the share price soared as investors clamoured to get hold of the relatively small amount of free floating stock. On the other hand more and more companies were knocking on our door wanting to join the group and with every deal we announced, more people wanted the stock. Amongst all that we were also dealing with a flurry of media requests, speaking requests, people wanting to work for us, people wanting to sell us stuff, and institutions wanting to talk about giving us money.

If I was to pick a moment from this time it was when Nasdaq invited us to their HQ in Time Sq New York and put our names up outside on a 5 storey digital screen, all whilst we were being filmed by a documentary crew.

It was heady times, no doubt, but the growth was putting a huge financial strain on us. Whilst we were keen to keep bringing in more great companies and announce more great deals we were looking at a shortfall of tens of millions of dollars to do it.

Despite the fact our little business had soared past $100m market cap and then a month later $200m, banks were, understandably, nervous loaning money to a company before it has published its full first year results.

Fortunately, or not as it would turn out, there were no shortage of other financial institutions who were more than happy to loan us money against the value of our personal shares. This is a widely known practice. Unfortunately, as we would later learn, it is also well known for some of it’s more shady operators. However, someone we trusted recommended an Institution in the US and having met with them a couple of times we decided to go ahead with a leverage deal.

They would ‘hold’ 3m of our personal shares (valued at the time at €24m) and in return would loan us €9m which we could use to close a couple of the deals we were in late stage discussions with. At the end of 2 years we would give them back the €9m plus interest and they would give us back the shares. All pretty straight forward.

The Mistakes
In retrospect, whilst we got a lot of things right, we also got a few things wrong. Our lack of experience in the public markets, a very junior and inexperienced team on the ground and a constant firehose of opportunities, criticisms, congratulations, and conflicting advice was not conducive to over delivering to our various stakeholders. The fact that our whole team had been working 7 day weeks in the run up to the IPO and then moved to working days and nights in the post IPO period doing the acquisitions did not help anyone either. Sleep deprivation is not a good state to make healthy decisions.

Sometimes we communicated too much to the market (sorry Nasdaq!), other times not enough. We did deals that, looking back, weren’t as smart as they seemed. Our contracts weren’t always up to scratch and often required multiple drafts, and our faith in others was unrealistic. We threw money at problems that would have been better ignored and ignored problems that would turn out to be critical. And we had a constant stream of people coming in to ‘advise’ us on everything we did.

Whilst it would be easy to point fingers at those ‘professional’ advisors, the reality is that like many things in life, we were getting diametrically opposing advice from advisors on almost every topic. Our mistake, which we own 100%, was choosing to listen to those that told us what we wanted to hear and ignore the rest.

Yet often the only way you can tell the difference is through experience. And the way you get that experience? Mistakes…

The ‘Alleged’ Crime
Back in the craziness of that first 90 days we had completed the deal with the US based Institution, the money had been promised and consequently we were able to announce a couple more great acquisitions that would be joining the group. The pace of activity was no less frenetic and we were desperately trying to staff up to cope with demand.

However, behind the scenes something wasn’t quite right with the share price. Having gone up like a sky rocket we were well prepared for people ‘taking their wins’ and selling off and sure enough many people did just that having made, in some cases, 700 or 800% returns on their investments, but it seemed like something more sinister was at play.

Our retail investors were crying foul. Someone had a massive sell order in the market and appeared to be deliberately driving the share price down. At first we dismissed it, but as the share price continued to tumble each day we launched an investigation. The obvious first stop was the institution we had just sent 3m shares to, but they were contractually obliged not to touch those shares. They even sent us a screenshot of the account in a 3rd party’s hands to show the shares were safe.

The impact on our business was very real and I will remember those days as some of the most stressful, and sleepless, I have ever been through. There were only 2 options; The Investment Bank we were using, but after accusing them the MD immediately flew out to Singapore to explain to us in person why that would never happen. The other option was one or more of the entrepreneurs in the group, but they were all locked up and so didn’t even have the power to sell shares.

Despite living in a world of real-time updates, in Europe where our stock was listed, you have to wait one month before EuroClear will give you a breakdown of who is holding your stock (not the individual accounts, just the banks). Blockchain couldn’t come fast enough, but over 2 months it became clear that despite their denials, the Institution that was supposedly holding our stock in escrow had actually been dumping it in the market.

Needless to say they also weren’t providing us the cash they promised…

(The use of the word ‘alleged’ in relation to the Crime and other softeners is on advice pending further legal action)

The Unravelling
The Agglomeration model was made as robust as we could make it. The companies we worked with carried no debt, they were all profitable, and were run by good entrepreneurs who had worked hard to deliver value to their clients. We weren’t betting on startups and we weren’t betting that these companies would over deliver in the future, just that they would stay about the same. The companies were also diversified over different niches and territories so as best to protect the wealth of the group.

Yet despite the resilient nature of the model there are few PLC’s out there that can withstand an onslaught like the one we were currently under. With 3 million unauthorised shares flooding the market the share price went into freefall. Even our most loyal investors got spooked and wanted out before they lost all their gains.

Whilst we had concern for our investors, our primary concern was for the founders that had joined (who also represented the biggest investor base). Unfortunately as the stock continued to tank several of the later joining companies decided to back out of the deal. This was supposed to be a collaborative IPO so if they wanted to exit we weren’t going to force them to stay, yet the knock on effect to the remaining businesses was like a kick to the guts.

As the market saw deals unravelling that put ever more downward pressure on the stock price and consequently our pipeline of future deals began to dissolve in front of our eyes.

Under this sort of pressure more mistakes crept in. Announcements were rushed through to the market that arguably should never have been made. Desperate attempts to rustle up more cash and shares for existing founders often led to more problems than solutions. Our own efforts to show support for the stock by investing more was even seen by some as ‘profiteering’.

As the year came to an end there was one bit of advice that was coming through loud and clear. We needed to step down from the Board and bring in some ‘professionals’ to restore investor confidence.

The Pain
As 2017 started it was quite clear that we were still a long way from turning the corner. We removed ourselves from the Board and bought in decades of experience whose job it was to try and restore the faith of the battered investors and the Founders of the group who still believed in the model, knew their companies were good, and couldn’t understand how the group was so undervalued. Their first step was to try to ‘rip off the bandaid’ and get all the bad news out in one go so that they could then build it back up from the bottom up. They have a difficult task and we wish them well.

18 months after it listed, The Marketing Group (TMG.ST) is charting a different path. Rejecting the agglomeration model it is currently focused on organic growth and product innovation.

As for the ‘alleged’ crime? We have spent a large amount of time and money chasing this so far. Because of the International nature of white collar crime it is very difficult to find anyone interested in supporting us. One of the employees of the Institution, when confronted with the proof we had collected, has since turned whistleblower and resigned. He has lodged with his lawyer all the internal proof we could ever need to have his former boss sent to jail. Yet that will cost us further hundreds of thousands of dollars and whilst it is the right thing to do, will never recover the damage that has been done.

When we talk about a $250m loss of Market Capitalisation it is a pretty abstract concept to most. For the guy that committed the ‘alleged’ act of fraud and walked away from it with tens of millions in his pocket, he probably sees it as a relatively victimless crime. But each one of those dollars has a story behind it. For us we got to hear those stories every single day. In many cases it was our friends, family and colleagues who suffered when the share price tanked. The cumulative amount of loss might seem abstract, but to individuals who owned the stock, it was very real.

Although many people suffered from the results of that one act, it was ultimately our responsibility to have created that wealth and it was our responsibility when it was destroyed again. Had this been a one off, it would have been easy to walk away, but we never approached this as a one time deal. The reason we were doing this work was because we genuinely believe that small businesses deserve a fair shake of the stick. As painful, and as ultimately expensive, as TMG became, what kept us going and having conversations with dissapointed founders, angry investors and with confused staff day after day was that we still had faith in the idea.

The Lessons
For Unity Group, our little company that put this together and has fought for this harder than anyone, there are 2 key lessons that we have taken from this which will guide us in the future. The first is ‘funding’ related, the second is ‘everything else’.

The start of all our problems came through a lack of funding and the decision to use what turned out to be a criminal to get access to capital. We were naive to the costs involved and in all future agglomerations we will be raising plenty of capital in the markets so that we have a war chest for the future. Raising money for small businesses is nearly impossible but for decent sized PLC’s it is relatively easy. We now have a Board of Advisors that include some of the brightest on Wall Street and the city of London advising us. Never again would we trust such a large concentration of shares to any one individual that might be tempted to choose greed over the law!

Everything Else
There is no doubt we made mistakes the first time around. However, as we swelled the ranks of our internal team we bought in many very talented managers who re-wrote contracts, improved the DD process and set standards and procedures for communications. The model itself has evolved through time as we’ve learnt what works and what doesn’t. There are subtle but important changes to the order in which we do things that again will prevent, or at least mitigate against, the black swan events.

We got to go through our model being put under the most extreme pressure we could ever have imagined and whilst it wasn’t pretty, we still have a group of great little companies that are working well together, winning big contracts and recruiting senior staff. The model itself is resilient but like any innovation, it gets sharper and better on the grindstone of the market.

The Future
Any invention, innovation or new product is normally a poor imitation of the final solution it becomes. We learnt from the companies we worked with and learnt more from those that wouldn’t work with us. We learnt from our investors and again from the investors that wouldn’t work with us. And we learnt about ourselves and our team, what our capabilities were and what areas were best left to others.

The problems facing good, well run small businesses remain the same and agglomeration remains the best model we know of to help solve those problems. The markets will change, our model will adapt, but fundamentally we are here to help small businesses scale more effectively. The impact on them, their teams, their clients and the greater economy can be game changing for all involved.

One decision to trust someone that turned out to be untrustworthy cost us $250 million in market capitalization, but it actually cost us far more in opportunity. It was an expensive lesson. However, the real cost would be far higher if we didn’t learn from it and push forward to continue what we started.
Every small business we work with has been through it’s own version of this rollercoaster and the best come out the other side stronger and more determined than ever. We are lucky enough to be able to work with those businesses, compare war stories and then push forward using everything we have learnt to take them to the next level.

And that is the most important business decision we can make.

Author: Callum Laing
Callum Laing is a Partner at Unity Group Private Equity and is also World Business Angel High Commissioner for Singapore. He is co-author of the best selling book ‘Agglomerate – Idea to IPO in 12 months’. You can download a free copy here:

This article is part of the World Business Angel Forum media partnership with

If you would like more information about WBAF, please contact Callum Laing WBAF High Commissioner for Singapore. [email protected]


Georges Tchokoua



Georges Tchokoua is connecting Africa’s fastest-growing entrepreneurs to global investors.

What’s your story?
My background is in statistical finance. I spent the early years of my career working in banking. After college in Paris, I started as a currency trader in London. After I graduated, I moved on to quantitative equity trading in New York, before going back to work as a financial engineer in London. I then decided to return to Africa to contribute to the economic development of the continent. After years spent in Morocco and in Cameroon, my home country, I realized, the majority of professionals are trained to be good employees, but there are not enough companies and jobs to absorb all these employees. I then went on to discover that, those venturing into entrepreneurship and innovation have limited access to coaching, mentoring, networking and financial resources. Upon relocating to New York, I started Africa Rising Invest. Our mission is to tap into the international marketplace from New York, in order to help unlock the entrepreneurial ecosystem in Sub Saharan Africa, and connecting the continent’s fastest-growing entrepreneurs to investors, globally.

What is your involvement with Investment?
Access to early-stage investment is still mystified in many Sub Saharan African countries. Though widely recognized as the main drivers of economic growth, innovation and job creation, SMEs in many cases still remain helpless when it comes to accessing finance. They are sometimes compelled to borrow short-term (3-5 years) at 15-20% from local banks or 25-30% from microfinance institutions. Many can’t meet the collateral requirements of local financial institutions.
Here is my message to SMEs: You have other options. I recently led a kick-off meeting between an SME credit fund and a West African manufacturer of plastic products looking to raise capital to scale up. In the same vein, we have signed MoUs with various institutions interested in investing in African SMEs. Finally, I am also an expert consultant with the United Nations Economic Commission for Africa (UNECA) for the capacity building program (including how to raise cheap capital to finance growth and the development of local content in the extractive sector), currently being implemented in five pilot countries.

How did that come about?
My tenure in Africa was a wake-up call. Over 95% of Africa’s economy is driven by SMEs and entrepreneurs. However, there are only 29 exchanges on the continent, representing 38 (out of 54) nation’s’ capital markets. Access to early-stage investments is nonexistent in most countries. Therefore entrepreneurs face many funding gaps during their journey. With few crowdfunding platforms, nascent incubation and acceleration centers and almost no technoparks, many are left over-relying on government grants. But these grants are limited. The amount of money in world capital markets are virtually unlimited. Thus, my partners and I founded Africa Rising Invest to connect entrepreneurs from Africa to investors from anywhere in the world. We hope to make it easier for young techies in Silicon Mountain (“Africa’s next tech hub”) in Buea and Cameroon for example, to seamlessly tap into resources coming from Boston or Singapore.

What are some of the key things you have learnt about Investing?
Humility is extremely important. Investing in general, and investing in startups in particular, is a continuous learning process. It’s very tempting to overestimate your startup selection skills and think you have a special touch. But remember, technologies evolve much faster than feedback loops in venture capital.

Artisanal gold mining – Shire, Northern Ethiopia

What mistakes do you see less experienced investors making?
Many less experienced investors expect a quick return based on good looking business plans forecasting profitable exits within 3-4 years. But behind every startup failure, there are good looking slides and spreadsheets. The reality is usually different. Angel investment is a long-term commitment.
Some less experienced investors invest in early stages with no additional capital for follow-on rounds. As the startup expands, it will require more capital. By participating in the subsequent rounds, it’s an opportunity to set the company valuation. Otherwise, as an early investor you will be diluted and end up in a position too weak to control the terms of the deal.

What mistakes do you see Entrepreneurs making?

  • Most entrepreneurs tend to think VCs invest in technology. Wrong. VCs invest in businesses and people they believe can deliver; they don’t invest in ideas and technologies. Your technology is only one of many critical elements required to build a successful business.
  • They tend to focus on what maximizes their ownership more than the drivers of enterprise value: Valuation, not your percentage of ownership is everything. You will have to be diluted if you want to raise capital.

What’s the best piece of advice you ever received?
Remember the last time you were preparing a presentation to speak before an audience. How long did you devote to polishing your body language and refining your voice as opposed to perfecting the words? Did you know, 55% of the meaning, people take away from any communication is based on body language, 38% on voice and only 7% on the actual words spoken? Mastering your communication skills, especially the three Vs of communication: Visual (what people see), Vocal (how it sounds), and Verbal (the actual words spoken) is key. To echo the President Gerald R. Ford, “If I went back to college again, I’d concentrate on two areas: Learning to write and to speak before an audience. Nothing in life is more important than the ability to communicate effectively.”

What advice would you give to those seeking funding?

  • Fundraising is a complicated process. Have a plan, arm yourself. Be open to listen and adjust. Invest in your financial education.
  • Research and diligence of your target investors, just like they diligently research you.
  • Summarise your info memo or your business plan in: (i) a 10-15 page presentation, (ii) a one pager, and (iii) a 2-3 minute elevator pitch. Investors usually don’t have long attention spans. It takes time and resources to read a 50 page business plan. You may not need it.

Who inspires you?
Tony Elumelu, a Nigerian economist, entrepreneur and philanthropist. He is the Chairman of Heirs Holdings, the United Bank for Africa (UBA), Transcorp and founder of The Tony Elumelu Foundation. The Foundation’s mission is to drive Africa’s economic development by enhancing the competitiveness of its private sector. As a premier pan-African-focused not-for-profit institution, the Foundation is dedicated to the promotion and celebration of entrepreneurship and excellence in business leadership across the continent, with initiatives such as The Tony Elumelu Entrepreneurship Programme (TEEP). I still vividly remember what he told me during the African Development Forum in Casablanca, Morocco last year: “African private sector has to be the generator of the continent’s economic development.”

What have you just learnt recently that blew you away?
The concept of agglomeration: This is a unique type of collaboration where a group of SMEs from the same or similar industries can join forces and list publicly on a global exchange. It is a huge opportunity for small businesses to grow faster through using the public markets. As a “co-operative of entrepreneurs,” it is a unique innovation that can be leveraged by African SMEs to leapfrog their development curve. It can be extended to lending, microfinance, nano finance and more. Cooperation and collaboration, not competition is a crucial concept in how we download and redistribute the limited financial resources available in this world. I am eagerly looking to source potential candidates on the African continent.

What business book do you recommend the most?
“From Business Cards to Business Relationships: Personal Branding and Profitable Networking” by Allison Graham. It is well known that your network is your net worth. Most professionals (including entrepreneurs) are usually not well equipped to take advantage of profitable networking. The whole process of attending events, getting business cards and building successful business relationships is an art, which can be intimidating if not mastered. It is almost never taught in schools. But how do you build that network? This book teaches you the practical way of realising your dreams by effectively connecting with the right people, at the right time.

Shameless plug for your business/organisation:
We are committed to helping the next generation of African entrepreneurs to access global finance and to scale their business to realise their vision. We structure innovative financial instruments suitable to our global network of investors. Sub-Saharan Africa is our market. The global financial marketplace is our capital reservoir. We are sector agnostic. Examples of startups we assist include the multi-award-winning EduAir (Formerly Kwiizi): An innovative solution designed to offer access to high quality digital education to schools and universities where there is no internet connection. The solution designs portable and open media libraries in the form of Boxes, giving access to a heap of educational content and offering an integrated communication system where learners can make video calls within the local network deployed by the Box.

How can people connect with you?
Email 1: [email protected]
Email 2: [email protected]

Social Media profiles?

This article is part of the World Business Angel Forum media partnership with

If you would like more information about WBAF, please contact Callum Laing WBAF High Commissioner for Singapore. [email protected]

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Emmanuelle Norchet



Emmanuelle Norchet works with Golden Equator Capital. Her focus is on technology investments across the southeast region in the online travel, media and entertainment, digital health and financial tech sectors.

What’s your story?
I am currently working as an investment professional with Golden Equator Capital, a private equity and venture capital fund manager, with a strong focus on technology, headquartered in Singapore. I joined the firm to look at technology investments across the Southeast Asia region, with a focus and interest for sectors such as online travel, media and entertainment, digital health and financial technology. The firm currently has 11 investments that are active across 2 technology funds. Our portfolio can be found here:

Prior to joining Golden Equator Capital, I worked with Nest, an early venture capital firm focusing on B2B technology plays in sectors such as healthcare, financial services, automotive and insurance. In my early days at Nest, I gained operational experience acting as general manager for, a first-to-market equity crowdfunding platform in Hong Kong set up to help early stage companies get access to financing through a community of over 800+ accredited investors and subsidiary of the Nest Group. I started my career working at a Chinese law firm in the field of inbound and outbound direct investments. I hold a Bachelor of Law, a MSc in Finance and I have been admitted to the Bar of Quebec, Canada.

What is your involvement with Investment?
As part of the investment team, I am involved with sourcing, identifying new investment themes, due diligence on new potential investments, presenting those opportunities to our investment committee, and finally working closely with portfolio companies to help them with their expansion strategy, corporate partnerships, customer acquisition and fundraising post-investment.

How did that come about?
After working with a startup and an early-stage venture firm, it made sense for me to move to Golden Equator Capital and focus on the technology sector in the Southeast Asian region. It is the right timing to focus on the region as we are starting to see more successful companies raising larger rounds from international players such as KKR, Expedia, and Alibaba.

What are some of the key things you have learnt about Investing?
There will always be some risks and some hurdles along the road, but ultimately, you have to believe in the team you are investing in and their ability to adapt as they continue to grow the business. As the technology sector is evolving quickly, our founders also need to have the ability and drive to move fast and adapt to the new market needs. A clear vision and good synergy between the founding team is important.

What mistakes do you see less experienced investors making?
They have usually seen enough companies, founders and business models to be able to see the big picture, trust their instincts and not doubt their decisions.

What mistakes do you see Entrepreneurs making?
One of the biggest ones that I’ve observed with early stage companies is for the founding team to focus or spend too much time on fundraising, resulting in less attention and focus on business and product development. The other mistakes would be the lack of focus, inability to delegate and building a clear organisational structure, resulting in the inability to do one thing well and affecting the execution.

What’s the best piece of advice you ever received?
As cliche as it sounds, I would go for, “focus on what you can control.”

What advice would you give to those seeking funding?

  • Don’t use buzzwords in your deck or presentations
  • Be clear about the vision and the focus of the company
  • Keep presentations short and to the point, leave most of the time for Q&As
  • Enquire about the fund mandate to ensure alignment (geography, sector, stage)
  • Don’t focus too much on the valuation in the early days
  • Speak to the portfolio companies of your potential investors to better understand their personal experience working with them

Who inspires you?
Many of the local entrepreneurs that have managed to build amazing companies from scratch. Some examples are:

  • Ching Tse-Tseng, founder and CEO of Vault Dragon
  • Joseph Phua, founder and CEO of M17 Entertainment
  • Lingga Madu, founder and CEO of Sale Stock
  • Ethan Lin, founder and CEO of Klook
  • Rosaline Chow Koo, founder and CEO of CXA

What have you just learnt recently that blew you away?
All of the challenges that had in their early days to get their company off the ground. I would recommend the book, “The Story.’

What business book do you recommend the most?
The one I mention above and also, some other interesting reads are:

Shameless plug for your business/organisation:
If your company is looking to join our business club at Spectrum (, please contact [email protected]. If you are a startup at the Series A or B stage in the region, please feel free to contact us at [email protected]

How can people connect with you?
[email protected] or [email protected]

Social Media profiles?

This article is part of the World Business Angel Forum media partnership with

If you would like more information about WBAF, please contact Callum Laing WBAF High Commissioner for Singapore. [email protected]

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