“When you’re an entrepreneur, the first $50,000 is the toughest amount of money you’ll ever raise in your life,” says multi-millionaire entrepreneur James Caan.

He adds: “Raising $5 million is a lot easier than raising $50,000.”

Mr. Caan, perhaps best known in Britain for his appearances on BBC2’s hit television show Dragon’s Den, was in Barbados last week to attend the Commonwealth Ninth Women’s Affairs Ministerial Meeting (9WAMM), began his his journey to fortune and fame when he sold a stake his first business, the recruitment firm Alexander Mann, for £25 million. Within a decade he had sold his remaining stake in the company and other businesses and gone on to form his current private equity firm, Hamilton Bradshaw, which currently owns majority stakes in over three dozen business, including real estate companies. His net worth is estimated today at £85 million.

Mr. Caan said that while banks and other lending institutions wanted to help entrepreneurs, they would always “struggle because of their need for security against the investment.”

As a result, entrepreneurs still depended first on private individuals to help them realize their dreams, he noted. “So friends and family and angel networks are still, around the world, the most active area where people find investment.”
The top executive said that he had been working to get the government in Britain to provide tax incentives to people who were prepared to take the risks of betting on entrepreneurial ventures. “So if you’re in a position where, let’s say you’re earning an income and paying 40% tax, and somebody comes along - it could be a friend or family - and they need £20,000 or $20,000, if you are to make an investment into that business, then you should be getting a tax rebate or reduction or incentive for supporting another business.”

Mr. Caan said that in encouraging this type of investment government itself would benefit because it would be creating new revenue streams for the future when those start-ups became profitable.

He added: “If you’re encouraging someone to start a business, you’re also encouraging them to employ people, which provides another (area of) revenue for government.”

Providing tax incentives to stimulate private individuals to invest in start-up businesses was needed, he said, because “fundamentally, that is the greatest source of capital that entrepreneurs end up relying on.”

Mr. Caan said he had already approached the new government with his proposals “and one of the things that they have already announced is small businesses who already employ up to ten new people will be given a national insurance holiday so that they don’t have to pay national insurance on the people they hire.”

He said governments generally were starting to recognize that they had to make it easier for people to start businesses, and that’s really the point that I was making in the first place, that, these are not ideas they would come with, but if you were to put more business people into government you will find that you would get more creative solutions to some of these problems.”

Asked about his fairly gentle approach on the show to entrepreneurs whose products did not seem ready for market, he said, “I think the one thing that makes the show what it is that the BBC are comfortable presenting the idea. And I think what that does is it makes people believe that anyone can do it. Because if all you did was put forward your best ideas, you would never attract the volume of people (who watch the show.)”

Mr. Caan said Dragon’s Den, which runs on Mondays nights with a repeat the following Sunday, had a total viewership of some five million people. The reason, he suggested, was that, along with the really promising new product ideas, “we do put on the ordinary man with the ordinary idea that’s probably not going to go anywhere. But the fact of the matter is, people who are sitting there with a better idea may not have the confidence of coming to the show, but when they see ordinary people with crazy ideas they think ‘God, my idea is much better than that.’”

And why does he do his best to let such persons down gently? “From my own point of view, I’m very sensitive that I’m not there to ridicule people. I’m not there as an actor, I’m there as an investor. And I like to feel that I treat people the way I’d like to be treated myself. If I see somebody who has an idea that I don’t think is viable, I’m not going to belittle him; I would say what I would normally say, ‘Do you know what? It’s probably not a good idea, it’s probably not something that I think financially you can make a profit from. And what I try to explain to people is that entrepreneurship is a journey: Your first idea is not always your best idea.

“I’d like to leave them on a positive note and say, ‘That’s probably not the best idea you’ve had but carry on. If you belittle them too much, you will kill their enthusiasm and they probably would never would do it again.

• Editor’s note: A podcast of the full BSJ Interview with Mr. Caan will be posted on this website soon along with a transcript.