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Financial Times (Tuesday August 20, 2002)
Former media star ready for a new genesis
Charlie Muirhead, the energetic 27-year-old entrepreneur who captured the headlines in the late 1990s as one of the UK's youngest and most successful technology businessmen, is trying to keep out of the spotlight.
The former media star has been advised by his lawyers not to talk to journalists until Orchestream, the loss- making software provider he founded six years ago, concludes an investigation into the origin of ý3.6m worth of accounting irregularities discovered last month. )
Orchestream's financial troubles could not have come at a worse time, with heightened sensitivity about accounting issues in the wake of the WorldCom and Enron scandals.
Making matters worse, some analysts believe Orchestream, which is publishing its interim results on Wednesday, may run out of cash in eight months.
Mr Muirhead who was chief executive until 1999, still sits on the board as non-executive chairman.
One would think that a young businessman so closely linked to a company whose market value has sagged from £942m to £4.3m in less than two years would get the cold shoulder from investors. But he is still receiving support from the investment community.
Mr Muirhead is one of a few technology entrepreneurs who are making a comeback in the City even though their earlier ventures did not meet expectations.
"He did pull something together that was pretty amazing for someone in his twenties," says fellow technology businessman Brent Hoberman, the 32-year-old chief executive of Lastminute.com, the online travel agency.
"By founding a company and taking it public, he has learnt what most people take 15 years to learn. I am sure that private equity firms know that and believe that he will be much better this time round than he was last time."
Over the past 18 months, the youthful businessman has managed to raise £13.2m from large private equity firms such as Atlas Venture and Benchmark Capital for his new company, Nexagent - no small feat in the current markets. Nexagent is yet to announce a single contract with a customer.
Mr Muirhead, chief executive of Nexagent, has also assembled an impressive team of managers for his new venture.
He has recruited Sydney O'Hara, former development director at Cable & Wireless, as chairman. He has also hired Greg Lock, former senior vice president of IBM, and Tony Morris, a well-known IT investor and consultant, as non-executive directors.
Nexagent, a spin-off idea from Orchestream, sells software that enables telecoms operators to share each others' networks and therefore lower costs. By comparison, Orchestream makes software that helps operators maximise their performance by automating the activation of their telecommunication services. s
Central to Mr Muirhead's return are his contacts.
Ever since he dropped out of a computer science degree at 21, he has sought to mingle with the best and brightest, whether they were entrepreneurs, venture capitalists, private investors or musicians.
In an interview this summer, he said: "I solve problems by bouncing ideas to people and seeing how they react. I like to get advice from people."
He also knows that being surrounded by talent is one of the best ways of being kept on a steep learning curve. Having experienced businessman among his entourage also compensates for his age. "Part of his credibility are the people he surrounds himself with," says Mr Hoberman.
Mr Muirhead's yearning for talent and good advice is part of the reason why he set up Igabriel, an angel investment network that provides start-up companies with early stage capital, in 2000.
Igabriel - an exclusive club of high-profile entrepreneurs - includes Esther Dyson, one of the world's most famous internet gurus and a friend of Bill Gates, and Paul Myners, former chief executive of Gartmore, the UK fund management house and a director at MMO2, the mobile operator spun out of BT, and Guardian Media Group.
It also counts as its members Peter Gabriel, the rock star and former member of the group Genesis who now runs Real World Studios, and David MacMillan, director of MacMillan Publishing.
Igabriel is thought to be currently in talks to forge a strategic alliance with another investment company.
Mr Muirhead's extensive web of contacts proved instrumental in attracting seasoned managers for Nexagent.
"I was fanatical about hiring a world class team from day one," says Mr Muirhead about the early days of Nexagent. "I did not have the credibility to hire one when I first started Orchestream."
But entrepreneurs need to be good salesmen to make the best of their contacts.
"When Charlie has a vision, he is able persuade people that this is going to be the next $1bn company," says Mr Hoberman. "He is also very tenacious which is important. He does not take no for an answer."
Mr Muirhead admits that he has made some mistakes while at Orchestream - mostly because of his lack of experience - and wished the company had not proved so vulnerable to the current downturn. He still needs to prove that he can turn his energy and ideas into long-term success stories.
But "being an entrepreneur", Mr Muirhead says, "is being prepared to take a step forward and take risks. If it's a step in the wrong direction, you just have to take a step back."
-Astrid Wendlandt, Financial Times; Aug 20, 2002
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