THE world's first investment tax relief deal for a new social enterprise has been struck in Scotland after a leading business angel plunged £15,000 into a courier firm for disabled workers.
Social enterprise development agency Firstport helped secure the country's first social investment tax relief (SITR), a UK government scheme, which supports businesses with a social purpose, enabling them to access new sources of finance.
Scottish business angel Barry Sealey has secured SITR by investing £15,000 in Delivered Next Day Personally(DNDP, a courier company based in East Kilbride, which employs disabled people as lifestyle couriers and community postmen/women.
Multi-award winning DNDP is one of 14 businesses on LaunchMe, Scotland’s first accelerator for early stage social enterprises, and is run by Bruce Gunn, who runs a socially driven courier company Delivered Next Day Personally.
Founder Gunn’s life changed overnight when an allergic reaction to a mosquito bite led to long-term illness and left him housebound for three years.
He went from being a successful IT consultant to joining the lost generation of disabled people on the scrapheap.
A parcel delivery led to a “lightbulb moment” and with support from Firstport and the Scottish Government’s Social Entrepreneurs Fund, Bruce changed his life and the lives of many other disabled people.
This is the first time Sealey has invested in a social enterprise and he says SITR was “definitely an incentive.”
He had limited knowledge of social enterprise until Firstport board member and former business angel gatekeeper Peter Shakeshaft brought it to his attention.
However, Sealey has extensive knowledge of business start-ups as co-founder of Archangel Investors Ltd, the oldest and most active business angel group in Scotland, which has led the investment of £174million in over 80 companies, creating over 1,000 jobs since 1992.
He said: "I was a business angel for 20 years investing in young companies so I know about small businesses.
"The idea of applying this experience to the social world appealed to me. Applying good commercial principles to tackle important social problems is so much better than looking for charity money.
"It’s a two way thing. I chose to invest in DNDP because as well as providing employment and a sense of purpose for disabled and disadvantaged people, it is also generating income and delivering commercial impact."
He insisted the social return was more important to him than the financial reward.
Sealey added: " “As an angel investor I have been putting something back into the economy, but the social return is more of an incentive for me. I am not doing this to make money, I am only going to make a small return, but it’s not giving to charity either.”
Firstport’s ongoing support to DNDP was also a vital factor in his decision to invest.
He went on: “People starting up businesses don’t have much business experience. They have imagination and ideas but they need help to get there.
"Firstport’s accelerator programme LaunchMe is about more than just giving financial help - it’s smart money – money with support attached. It’s also about matching social entrepreneurs with investors so they can tap into their networks, skills and expertise.
“If it was someone coming off the street and asking for investment it would be very different. Firstport do the initial screening to make sure the business is viable and give ongoing support. That was the key in deciding to invest.”
Sealey said he also invested because he had confidence in the company's CEO.
He added:“There is no way I would invest in a business if I didn’t have confidence in the person behind it. As an investor it is vital you believe in both the idea and the people who will deliver it.”
Firstport's chief executive Karen McGregor said she was delighted Sealey "recognised the exciting potential" of social enterprise.
She added: "We are delighted that Mr Sealey, one of Scotland’s leading business angels, has recognised the exciting potential of social enterprise, and DNDP in particular, and that Firstport has been able to help secure what is hopefully the first of many SITR deals in Scotland."
Firstport has provided support and resources to 700 entrepreneurs totalling around £3.7 million helping to create two new social enterprise companies every week in Scotland.
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