Entrepreneur Action - the deafening silence continues

Let me remind you of the four questions we asked two weeks ago:

• How much money did Entrepreneur Action and its associated companies receive from the Welsh Assembly over its life?
• What remuneration did its management team receive in that period?
• Why was liquidation the only course of action available to the Board, and how did they allow the company's financial position to deteriorate to such an extent that this became the only option?
• What action is being taken to protect the interests of those companies which paid £5,000 but had not received the full extent of the support they were promised?

These questions remain unanswered, primarily because journalists and the Welsh Assembly appear united in their belief that if they keep quiet long enough, it will all go away. Only Dylan Jones-Evans in his blog, reproduced (with a less inflammatory title, in my view) by the Western Mail, has voiced any concerns. An extract follows:

"Given the close links between the company and the Assembly’s Economy and Transport division, I would expect that Assembly Members will be looking for answers as to why a business with a cast iron contract for millions of pounds with the public sector could end up in such a position.

Certainly, the way that the Assembly has quickly washed its hands of the company should prompt an inquiry into why a £15 million programme of business support has failed. More importantly, it throws into doubt much of the current approach by the Assembly towards business support and, in particular, its strategy for the future."

Yet there is still silence. Where are the answers? Where is the commitment to an enquiry? Where is the accountability?

In my view, this kind of support model (at least in the way that I believe some of it was provided) has some fundamental problems:

• Let's suppose a support agency employs a large number of self-employed consultants, paid an hourly rate for their advice to start up and early stage companies. These costs, plus a margin, are recovered out of funding provided by the Assembly. What incentives are there to say "NO" to companies or individuals who lacked the fundamental building blocks of a good business? The incentive is quite the reverse, keep them on the books for as long as possible, even if there isn't a future for them, because this keeps money coming in.
• It is in the support agency's interest to overstate the prospects of each company coming through its doors. Not only could this strengthen the argument for a greater slice of funding, but which official would be brave enough to query this and potentially undermine the positive statistics about entrepreurship in Wales.

I'm certainly not suggesting that either of these things did happen, but I do believe that this kind of model emphasises all the wrong things. If a business has good fundamentals, then support should be forthcoming, whether financial, strategic and/or managerial. Each business needs three things - a good idea, a market for that idea, and good people who can make it a reality. The private sector already works on this basis, and the public sector should be reminded to work in the same way.

Collective Thought works precisely on this basis. We are able to deliver individuals with proven track records to work with your company, and we don't charge a fee. We take equity in the business - if your business doesn't succeed, we don't earn anything. We share your risks, and as a result are as committed as possible to making you a success. That's the model for business support.