At Tech City News, we’re always keen to shine a light on those who make up the UK’s thriving technology community.
This week, we spoke with Ed Molyneux, co-founder of FreeAgent, a cloud-accounting software firm.
Molyneux talked about taking FreeAgent public, what other entrepreneurs can do to IPO successfully and how he’s learnt from past mistakes.
Tech vertical: Cloud-accounting software
Funding: £8m in angel investment, debt financing and crowdfunding (2007-2015) successful IPO raising a further £8m in November 2016
Staff count: 120
Q: What were you doing before FreeAgent and how did that experience help you when it came to co-founding your company?
I have an academic computer science background but when I left university I joined the RAF, eventually completing two tours of duty as a Harrier pilot. While it was an incredible experience it is not a particularly conducive environment for creativity or strategic control unless you’re at the top so I left the RAF in 2002 and with my background in IT moved into freelance consultancy work which was the stepping stone to founding FreeAgent.
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As a pilot in the RAF there was a tremendous sense of camaraderie and teamwork on the squadrons, each unit a finely-tuned machine in itself. I think I learned a lot about the power of alignment, how much can be achieved when everyone’s harnessing their varied talents in the same cause, which is certainly the case at FreeAgent. Taking the plunge to go freelance is not for the faint-hearted – it takes drive, courage and belief – again all traits that helped me to believe FreeAgent could succeed.
Q: Where did the idea for FreeAgent come from?
Whilst I was freelancing I met fellow IT freelancers Olly Headey and Roan Lavery (who became my FreeAgent co-founders) and we all agreed that whilst we enjoyed working for ourselves the experience of sorting out the accounts was painful. None of us liked using spreadsheets to manage our accounts and we couldn’t believe that there wasn’t any software designed specifically for freelancers out there. So we decided to create our own, and we dived into 6 months of rapid development, prototyping the service and developing the business model in our spare time.
We set out to ‘democratise accounting’ and to take the hassle and pain out of doing the books. We wanted to give our customers – freelancers, contractors and micro-businesses – a better way to manage their day-to-day finances and work more effectively with their accountants.
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Q: FreeAgent recently floated on AIM, what advice can you give other tech entrepreneurs looking to take their companies public?
Our decision to IPO was a long time in the making – it wasn’t like we just woke up one day and realised we needed to float. So it’s important to properly examine your business, your position in the market and your future aspirations to make sure that going public really is the best move. That includes reviewing economic conditions and projections, taking major geopolitical issues into account (in our case, examining what effect Brexit could have on the markets) and analysing any future legislative changes that could make your business more favourable to going public.
Then when you start out properly on the journey, you absolutely must hire an advisory firm to help you explore all the options and to start getting your company ship-shape. You need to find people you can get along with as you will be working closely with them for what may be an extended period – nine months, in our case. We went through our own selection process on brokers, accountants and lawyers, and ended up with a great team.
As you go through this process, it is also important to keep your staff and your shareholders fully briefed. Whilst such a high-level decision is for the executive team alone, transparency about current thinking, plans and progress is a valuable inclusion exercise.
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Q: Have you had any mentors along the way, if so, what have they helped with?
One of our first investors was serial angel Robin Klein, one of Europe’s most influential tech investors. He saw our potential and he has also been a valued mentor to me as the business has grown.
We also have a number of other knowledgeable business figures who have invested in the company and are members of our board. Having access to their advice and insights has been really valuable for us.
Q: If you could go back in time, do you wish you would have done anything differently?
I’m not really one for looking back and agonising over specific decisions or wondering whether we could have done things differently. I think we needed to make all the mistakes we made for us to be where we are today. They are all part and parcel of what FreeAgent has become and have shaped the way we work today.
Q: What does a typical day in the office look like for you?
There’s no such thing as a typical day. I can be presenting to investors or speaking at conferences one day and then the next I’ll be in executive team meetings or talking to the media. It means every day brings its own unique experiences and challenges and I’m always busy – although I don’t get much opportunity to sit in front of my Mac writing code these days!
Q: How do you see the UK performing in the global technology scene in a post-Brexit world?
Hopefully the UK will remain competitive and continue to nurture great tech companies with amazing products and big aspirations, but I think there’ll be a lot of uncertainty in the years ahead. The UK tech scene has benefitted hugely from EU membership – as many leading developers have come from the continent to study and work in the UK – so it will be interesting to see how tighter immigration controls in post-Brexit Britain will affect that flow of talent.
I hope that any negative effects on the tech startup industry will be minimised and that the government makes a commitment to help tech companies grow and flourish, but I think it’s still too early to speculate on what the future will hold.
Q: Finally, what can we expect from FreeAgent in the next year?
Our plan has always been to keep growing FreeAgent as a business and to continue evolving our software to meet the needs of our customers. So now that we have successfully IPO’d, we’ll be looking to accelerate this growth.
We recently agreed a new partnership with Royal Bank of Scotland which is very exciting and we’re looking forward to working with them over the coming years and we’ll also be looking to expand our influence in the accountancy sector too. We’re already working with some of the UK’s leading contractor accountants and we’re hoping to introduce even more of these firms to FreeAgent and demonstrate how our software can help them work more effectively with their clients.
With the government’s Making Tax Digital agenda on the horizon, we’re also going to start seeing more freelancers, contractors and micro-businesses looking to technology to help them comply with the new legislation. That’s a big opportunity for us to explain how FreeAgent can help smaller businesses stay in control of their day-to-day finances, manage their tax digitally and work more efficiently.