Novel funding for cheese start-up on road to success

A start-up business in Newtownards has overcome the reluctance of banks to invest in new food enterprises by raising £80,000 through crowdfunding to become Northern Ireland's first raw-milk blue cheese manufacturer.

Michael Thompson, founder of Mike's Fancy Cheese, will start producing the soft cheese in July after struggling to source other forms of finance. The start-up is first in Northern Ireland to use crowdfunding and is among only the third artisan producer of soft cow's cheese.

Thompson trained at the School of Artisan Food in England and worked in a dairy before returning to Northern Ireland to set up on his own. He now has a small unit at a business centre in Newtownards and has begun work on developing the new cheese. He hopes to employ up to three people part-time when the cheese becomes available.

He has also gained experience from Neal's Yard Dairy, one of Britain's biggest artisan cheese businesses, and from working at the Arcadia in Belfast, Northern Ireland's award winning deli.

"During my time at the School of Artisan Food I had the opportunity to make cheese with some of the best cheesemakers in the country, such as Joe Schneider at Stichelton and Jamie Montgomery at Montgomery's."

Following his graduation in dairying he gained employment with Sparkenhoe Red Leicester, managing the making of three different award winning raw milk cheeses while evolving the recipes and creating his own blue cheese, a Stichelton cheese from unpasteurised milk sourced from a local farm. He has his sights on winning business outside Northern Ireland particularly in Great Britain, where he believes there is a significant market opportunity.

"I looked for the banks but for the start-up money I needed but found a genera; reluctance because I didn't have any security. I started looking at different ways and that's when I came across crowdfunding website Seedrs, which seemed ideal for myself as a young entrepreneur. I needed around £80,000 to turn my idea into a viable business, mostly for the purchase of the necessary equipment.

"The initiative proved immensely successful, and I now have the cash to get moving on producing cheese."

Thompson added that access to finance is an issue for entrepreneurs and schemes such as the Seed Enterprise Investment Scheme, which provide tax relief for investors and allows for investors to receive 100.5 per cent of their investment is the business fails, should be more well known.

"The idea of crowdfunding is ideal for a young entrepreneur like myself who hasn't any real security and little cash to invest. It gave me something to work towards.

"Not coming from a business background, purely just food and cheese production, its made me look at it from an investor's point of view and made me appreciate it more than I had done beforehand."

Seedrs is an online platform that enables small investors to back start-up businesses with seed capital to get them started. For most entrepreneurs, start-up funding is the toughest capital to access. Venture capitalists don't invest that small and angels rarely invest that early, so unless the entrepreneur has a few very wealthy friends or family members, raising this money is difficult at best and often impossible.

It is also designed to enable people wishing to invest a small amount in startups. Some want to build a portfolio in order to get exposure to high-growth, high-risk asset class. Others want to support friends, family and community members while getting the benefit of upside if they succeed. And still others want the excitement of being a 'Dragon'.

Due to the high transaction costs of making small investments in private companies, though, it is extremely difficult to invest less than £10,000 in start-up through traditional means.

Pic - Michael Thompson of Mike's Fancy Cheese