Bankruptcy is a word that strikes fear into the soul of any entrepreneur. It used to mean disgrace and misery. But it seems to have become a perfectly acceptable device among certain enormous public companies.
Recently, Tesco put its US subsidiary into bankruptcy as part of the process of disposing of it; and Kingfisher put its Irish arm into examinership - the Irish equivalent of administration - earlier this year. I suppose they don't think foreign divisions count in terms of their corporate creditworthiness or reputation. But it is an example of how attitudes to failure and insolvency have evolved.
Overall, this is probably a change in our culture for the better. We should all be allowed to make mistakes and then go on to recover - assuming we behaved honestly. This is what separates the con-men from the rest of us.
I believe every winner will have suffered setbacks along the way: I've read countless biographies of tycoons, and every journey was a haphazard path. And certainly any venture capitalists of experience will admit to having a number of bust firms under their belt.
If not, they have not been taking sufficient risks. After all, institutional investors are not exposed to losing their homes or the right to have a bank account - which is the risk facing any individual entrepreneur who fails to use the corporate veil to protect himself when he gets into financial difficulty.
Yet even then there can be renewal. I recently met an impressive entrepreneur in the e-cigarette market, who explained that he had been personally bankrupted not long ago. Now he runs and owns a fantastically buoyant business making several million pounds of profit every year and growing rapidly. I applaud his resilience and phoenix-like rise from disaster.
So one should not be too snobby about big corporates that take the fairly ruthless step of dumping chronically loss-making offshoots - even if staff, suppliers and landlords get stuffed in the process.
---
My business career has been punctuated with a series of unfortunate encounters with fraudsters. They have not typically lived as full-time con-men (and they were all men); rather, they have conducted ostensibly legitimate dealings but in reality lied and cheated at intervals.
In a majority of these cases I was ripped off, but sometimes I rumbled them before they got away with it. Perhaps this reveals me to be a mug: I prefer to think that I am a risk-taker and that I occasionally make errors of judgement about individuals.
The most surprising revelation is that none of them (as far as I can work out) have been jailed, despite their bad behaviour. Most have been made bankrupt; frequently their personal lives are chaotic; and the number of victims of their various scams is legion.
But banks, investors (including me, sometimes), creditors/suppliers and partners can be surprisingly gullible. And once a fraudster, always a fraudster, I'm afraid. Never, ever go into business with a supposedly reformed character if he has cheated badly in the past.
The worst aspect of doing business with cheats is that you lose a bit of faith in other people: you become more suspicious and less trusting. Cynicism is a corrosive emotion: it can smother innovation and bold initiatives. Becoming cynical can be almost worse than having money stolen.
But, sadly, the league of rogues has many members. Talk to anyone who has been in business for a decade or more and they will tell you tales about the bandits they have employed or with whom they have had costly dealings. It is a rite of passage for any entrepreneur.
---
If you want confirmation that London is truly a world city, you need only go to King's Cross to see urban renewal in action. The transformation underway there is spectacular. The false facade at the front of the station has been cleared to reveal a huge piazza.
The departures concourse to the west is an impressive construction, which now abuts the relaunched and sparkling Great Northern Hotel. North of the terminal is a 65-acre development that is the new home of Central Saint Martins College and new eating places like Caravan and Grain Store.
Google's HQ is being built opposite. Many more shops, restaurants, offices and homes are being created. The project will be completed in 2015.
In addition, the £650m Francis Crick Institute is being erected nearby, along the Euston Road. It will be a world-beating biomedical research centre, and it also opens in 2015.
Between the two is the magnificent St Pancras station, now home to Eurostar. At its front is perhaps London's most splendid-looking hotel, the St Pancras Renaissance - now beautifully restored to neo-gothic greatness. Adjacent is the British Library, a thriving mecca of learning.
I predict the area immediately north of the Marylebone and Euston Roads will soon become one of the more desirable places in London to work, study, stay, eat and live.
It is incredibly convenient for rail termini heading all points north. It offers plenty for tourists, from the Regent's Canal to the Wellcome Collection.
It shows Britain can do large city-centre projects as well as any nation. We just need dozens more such hotspots all over the country to drive regeneration outside London.
Luke Johnson is chairman of Risk Capital Partners.
Follow him on Twitter: @LukeJohnsonRCP
.jpg)
