Business Interview: John White, chairman of Rivers Capital Partners

John White has helped quite a few people become very wealthy, and his current hopes are pinned on the North East

John White of Rivers Capital Partners
John White of Rivers Capital Partners

The Moon landing was the giant leap that captured the imagination of a young John White, glued to the television in 1969.

This early otherworldly flashpoint set the Dorset-bred boy on a trajectory that would take in computer chip design, stock market listing and piloting his own jet.

These days the softly spoken entrepreneur is chairman of North East-based independent venture capital company Rivers Capital Partners, which has been fuelling some of the region’s most exciting young companies with equity and loan-based funding over recent years.

The firm bills itself as a venture capital company “run by entrepreneurs for entrepreneurs”, and few must be as qualified as John.

Growing up in the sixties and attending grammar school, he cultivated a keen interest in electronics, which led him to study it to degree level at the University of Southampton. A PhD in microelectronics followed — he’d always wanted to be a doctor.

Even outside of university work, he buried his head in technical matters. A part-time job as an aerial rigger also gave him a head for heights that, unbeknownst to him, would prove handy much later on.

He explained: “I used to put up aerial masts and then drive around to check the reception. It was a good, fun job, and for me, it was the only real way of going to university. We didn’t have a great deal of money so getting a job was the solution.”

Upon graduation John worked for Ministry of Defence and then telecommunications firm Marconi — the business originally founded by Italian radio inventor Guglielmo Marconi. Here he worked in the semiconductor division as a designer involved in designing radiation hardened chips which were used in space.

With his technical mind now even more attuned, John turned his attention to Thorn EMI — the British firm which throughout the ‘80s and early ‘90s spanned a myriad of sectors including television broadcasting, retail, defence, music and consumer electronics.

It was only a matter of years before John had ascended through the ranks to head Thorn Central Research Laboratories, a division that encompassed around 220 people developing a broad range of potentially lucrative technological ideas.

John explained: “The Thorn EMI job was really good timing for me, I was lucky. I’d been made CEO of the research labs but it was at the time when the group was selling off a lot of its businesses.

“We had quite a big team and worked on some really interesting stuff, such as liquid display technology and 3D sound systems.”

In the mid ‘90s Thorn EMI began a demerger to split the companies. John was given a choice: either buy the business or close it down.

“Fortuitously I had already thought about doing a business like that myself. I’d done an MBA which basically taught me how to make money out of ideas through patenting and licensing.”

The team churned out concepts, including the likes of halogen hobs and x-ray body scanners, before going out to firms that would “sponsor” the development cost. John and his team retained rights in the concept, and if it was viable it would taken to market through licensing.

His first task was to prune the £10m a year costs in the business and make it profitable. He was given 18 months. The strategy involved dividing the business into 12 groups which would meet weekly to monitor each other’s performance.

“We filtered it down to about 150 people and by that stage we were making a small profit. We were creating about one new business every year.”

With John at the helm the intellectual property generators eventually formed a buy-out vehicle called Scipher which took the firm for £3m. It was a risk. John’s house was on the line. Fortunately it was a risk that paid off.

The senior managers gave away just under third of their shares — paid for with their own money — to the staff. It took five attempts to float the business before in February 2000 it debuted on the London Stock Exchange, valued at £330m.

“Outside of the senior managers there was about 40 staff who became millionaires. It was nice to see the secretaries going off to Tahiti. I think it’s a really important part of management to have the same objectives for your staff as yourself. The common goal has got to benefit everyone,” John said.

Two years later, John had sold his shares and moved on to a new project.

He said: “The MBO and flotation had taught me a lot. At the time I thought I could see a better way than the city were doing it. Both ethically and in terms of the model. The city was pushing for short term activity, but making things actually creates a lot more long term value and — to use boffin speak — there’s a bigger moat to stop other people competing in that area.”

He successfully set up venture capital firm E-Synergy with three other partners, and landed investment from well known British venture capitalist Jon Moulton. The business grew to manage a £100m portfolio, comprising mainly start-up ideas.

It was through E-Synergy that John became involved in the joint venture which would become the current Rivers Capital Partners business. An enthusiasm for North East innovation meant John could not resist remaining involved with Rivers after he sold his E-Synergy shares.

Rivers’ business now comprises the £8.5m Finance for Business North East Angel Fund and the £6.5m Microloan Fund — both underpinned by the £125m Finance for Business North East programme. A social enterprise fund is also in the offing.

John White of Rivers Capital Partners
John White of Rivers Capital Partners

John, who now splits his time between a home in France and the North East, found opportunity in the region.

He explained: “I’d been successful in raising some money for a couple of large companies in Newcastle so I was aware of the strength in SMEs in the region — particularly the family enterprises.”

John is particularly excited about recently published figures which suggest revenues of UK SMEs have for the first time overtaken their “Mittelstand” counterparts in Germany — the poster companies of Germany’s economic strength. John cites North East grown companies such as Bell and SMD as key success stories — companies that “create something solid and tangible”.

He added: “I’ve always prefered to make things, I think it must step from my technical background. One of the best things about working here is visiting the manufacturing companies we invest in. For instance the other day I got to see a company that is making theme park rides for Dubai.”

For John and Rivers’ director Jonathan Gold the aim is to incorporate sound investments with expertise, support and guidance.

He explained: “The Angel Fund requires high net worth individuals to know what they’re investing in, and the set up is such that they will often bring management expertise to the table. On the Microloan side we have to take such care to make sure people are properly informed about what they’re doing. We endeavour to help people that the banks can’t or won’t help. For instance, if someone has CCJs we take a lot of time and care to come up with a solution. It might be that CCJ has been registered under the wrong company name, or its been paid off quickly.”

Rivers have found a demand for such small loans — funding everyone from innovative cake makers to computer game designers. The latter is a particular favourite of John’s.

He said: “I’m really interested in the computer games scene on Teesside. There’s a lot of young people with great expertise and background. One of our earliest loan deals was for a guy, with a game, who sold it and made a considerable amount of money for someone in their early twenties. Other people have seen his success and it’s spurred them to do the same.”

John has proven the whirlwind investment world is best escaped through the cockpit. His love of flying has taken him all over the world — the next trip is a flight over to Iceland with his partner Caroline.

“When it’s a really rubbish day you can take off, and within minutes you’re above the clouds in beautiful sunshine. It’s a completely different world and, I have to say, it’s great.”

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