First AngelsJa Successes | A big idea; but the banks weren't biting (Part 2)
We continued our series on First AngelsJa Successes yesterday, featuring Danielle Terrelonge Irons, founder and CEO of DRT Communications Limited, a marketing communications agency and the first company in the Caribbean to offer technology-driven media-monitoring services. Here is Part 2.
Send in the angels
Four years in, with DRT hitting its stride, Danielle had another big idea: technology-assisted media monitoring. No other company in Jamaica or the Caribbean was offering this service, and one of her clients - all the way from Panama - was eager to find a media-monitoring agency in the region. She began to do her research, spending the better part of a year looking for technology that could be tailored to the Jamaican and regional landscape, but could find nothing. Her father, an entrepreneur who had long worked in technology, helped her search, and he eventually found a solution, but it came with one big problem -: a hefty price tag of US$250,000 to customise and roll out the service for use locally and regionally. Where was that money going to come from?
The banks were definitely not biting.
"I went to my bank, no dice. I went to another bank I used to have an account with, they said I didn't have any collateral. I have a business based on intellect and creative talent, and that's not exactly collateral, so no one was offering me a loan," she explained. "We had our financial statements together - audited statements, everything. I'm doing what they keep saying small business people don't do, so why is nobody paying me attention?"
Sagicor Bank was her last stop, and there she finally found a champion.
"They went to the Development Bank of Jamaica (DBJ) on our behalf and actually got the loan, which was amazing. Sagicor really fought for us, and I'll always feel indebted to them," she said.
Although the DBJ was on board, she still had to find some form of collateral, and the loan was expensive when it came to repayment.
"They had to get paid first, so that just ate through the cash. Any cheque that came in went to them first, so we were running out of working capital."
'I spoke from my heart'
Danielle was feeling the pinch, but still plugging away. At the same time, she was enrolled in a business course in Argentina, and someone there suggested she reach out to Sandra Glasgow, co-founder and manager of FirstAngelsJA, Jamaica's first angel investor network, which had been established in mid-2014.
Danielle made contact and told them her story, and before long, DRT Communications was on its way to becoming the first company in the Caribbean to receive investment from a formal angel network. But it was not an easy journey.
"One day, I'm sitting with Sandra and I think I'm going in there big and boasty, with my business idea and my financial statements just ready - Shark Tank kinda thing - and she just beat me up - not in a bad way," she laughed.
Danielle made the adjustments suggested, and met with Sandra a second time.
"She said, 'Do your pitch.' And she beat me up again, but she really walked me through it."
After fine-tuning the pitch, it was time for the real thing that September. But how do you face a room of 18 people, including some of the biggest, most illustrious names in the regional business sphere?
"On my way down to the presentation, I texted two of my girlfriends and one of their husbands to send me some scriptures. I needed something to hold on to," she recalled.
One of those verses was Philippians 1:6: "Being confident of this, that He who began a good work in you will carry it on to completion until the day of Christ Jesus."
"And I went in and just got into my groove. What I realise is that I spoke from my heart. I took my passion for what I was going to do into that room."
Danielle believes there are several factors that made DRT Communications an attractive investment for the angels: the business was already operational and earning revenue, and it was compliant. Her character and that of the existing directors also played a part, as they were ready and willing to take advice and direction from potential investors. And, of course, they saw the potential in the novel yet much needed media monitoring solution she had pitched.
Once the deal was done, Danielle was able to retire the cash-draining DBJ loan and make room for more patient capital.
Since the investment, DRT has experienced nearly double growth in its human resources, as well as a 140 per cent increase in revenue. She is grateful for that infusion, but "the most valuable part of the investment is in terms of access to individuals who have a stake in your company, who have themselves grown businesses and expanded throughout the Caribbean. I am able to bounce ideas and concerns on the board and feel totally at ease," she said.
"We're held to a higher level of accountability by having a board of directors in place that sets targets and pushes for a strategic and long-term outlook."
An eye to the future
Having received angel investment and seen firsthand how it has helped her business revolutionise the local communications industry, Danielle is looking forward to the day when DRT can pay it forward.
"This is one of my personal goals. It's clichÈ, but true: small and medium-sized businesses and their growth is the lifeblood and engine of any developing country. Someone put down a ladder for me to climb. I want to be able to send it back down for others, too, and guide other women and men within and outside of my field to grow and develop thriving businesses. For each person we employ, we impact communities and the nation. That's reason enough for me," she explained.
She urges other entrepreneurs with start-ups that have an eye towards seeking angel investment to treat their businesses as if they were going to list on the Jamaica Stock Exchange from day one: "Develop reporting standards and growth plans. Be in a position at all times to show how your company has grown, and what the plans are. Always have good financial statements. And ensure you are fully compliant and have good corporate governance."