Lessons from Corbin & King’s fractious investor fallout for startup founders

In his book, Breakfast at The Wolseley, the renowned restaurant critic, A.A. Gill observed, Wherever, whenever breakfast comes, it is a mouthful of stoic optimism. I agree wholeheartedly. I was introduced to The Wolseley restaurant  back in 1995, and whenever in London, a Wolseley breakfast is my guilty pleasure. My indulgent start to the day comprises Wolseley’s classic egg dishes: they do the fluffiest, creamiest scrambled eggs, a rich and hearty fried haggis and poached duck eggs with whisky sauce, and scrumptious eggs benedict.

The Wolseley breakfast is woven into the rhythm of my London visits, sitting at one of its tables, to soak in the throwback early C20th glamour. The warm welcome from behind the front desk sets the tone, the choreography of the waiters’ swerves bringing the food, balancing plates, inspires confidence, the zigzag pattern in the marble floor wild and yet ordered.

A fascinating history lies behind the iconic building of 160 Piccadilly. Combining British heritage with European grandeur, in 1921 the English architect William Green, was commissioned by Wolseley Motors to design a prestigious car showroom. Green incorporated marble pillars and archways with Venetian and Florentine-inspired details, making for a grand and impressive building befitting of the company’s ambitions. Yet by 1926, the cars weren’t selling, and the firm went bankrupt. Barclays took over the site and their new branch opened in the spring of 1927. Green was called upon once again to construct a banking counter and managers’ offices.

It was in July 2003 that restaurateurs Chris Corbin and Jeremy King acquired the building. A sympathetic restoration and renovation process was testament to the longevity of Green’s vision, as many aspects of his original design, such as the domed ceiling and monochrome geometric marble flooring, are still on view today. Four months later, The Wolseley opened its doors. Today it has earned a reputation as one of London’s most respected all-day café-restaurants, and an iconic eatery. 

Corbin and King have a career spanning more than four decades, with a portfolio of celebrated London restaurants that also includes the Delaunay, Colbert and Zedel. In 1981, the pair brought back to life Le Caprice. They kicked off the Nineties by reviving The Ivy, and then sorted out J Sheekey. All three remain healthy London venues where once they had been on their uppers. Their influence on the way London eats, and the way its restaurants run, is impossible to overstate.

While Corbin had taken a step back in recent years, King, regarded as the capital’s leading restaurateur, remained hands on. He’s famed for his eye for detail and for his daily tours of his restaurant dining rooms, stopping by the tables of regulars and newcomers alike to check they were being looked after. The difference between a restaurant owner and a restaurateur, he said once, is that one runs it from the boardroom, and one runs it from the floor. King was always on the floor.

You cannot be in love with a restaurant. But I am. I have loved Wolseley breakfasts for serious work conversations, family celebrations and outings, and reunions with university friends. But now the lights dim, the spirit of the place is broken, as founder-owner Jeremy King had been outbid in his attempts to rescue his restaurant: Minor International now has full control of it and eight Corbin and King sister restaurants. For me, The Wolseley was a place of solace. It feels like the end of that era now. 

Minor bought a 74% stake in Corbin and King for £58m in 2017 to fund expansion and injected a £35m loan to push back the financial distress of the pandemic, but then earlier this year forced the company into administration, warning it was ‘unable to meet its financial obligations’. It found itself at loggerheads with King, who serves as Corbin and King’s CEO, claiming the founder had repeatedly rejected proposals to recapitalise the company.

American investment fund Knighthead offered King £38m to shore them up, but King lost his battle for control as Minor acquired 100% from the administrators. He had his laptop and phone confiscated on the day Minor gained control and was escorted from the building. Corbin and King is now a company without the men those names belong to. It is reported that the pair are banned from stepping foot inside any of the nine sites they opened. King said: Lesson learnt by me: never relinquish any control whatsoever. In other words, be careful who you hop into bed with, especially if you let them control 74% of said bed.

 To their many admirers in the hospitality sector, they stand for success, showing just how far a dream can go. The idea that their empire collapsed at the whim of an investor is a terrifying thought to everyone shadowing their moves or simply trying to learn from them. It is the dismal end to a fractious battle. Stephen Fry tweeted: Oh bollocks. Is it always going to be a world where the good guys lose and the greedy, soulless, and mean win out?

Amid a cost-of-living crisis, when energy prices are going through the roof, an investor battle over a bunch of fancy restaurants, with menus full of steak tartare and îles flottantes, may seem less than important. But what has happened to the much-loved group led by the Wolseley speaks to a faceless investor narrative which has little to do with being hospitable and everything to do with profit above all else, and a story startup founders should heed.

So, what are the lessons for founders in terms of choosing and working with their investors, and keeping alignment when things don’t go to plan, from the events at Corbin and King? Their disagreement with Minor International has cast an ugly light on the fragility of their relationship post pandemic. To many admirers, Corbin and King stand for success, showing just how far a dream can go. Did their business collapse at the whim of an investor, or simply was it insolvent? Putting aside the economic side of the debate, if it was a fall out with their investor, what could Corbin and King have done better, and offer insight to startup founders?

1. Choose your investors wisely The first thing to keep in mind when considering investment is to choose your investors carefully. Once they’re on board, they will either play a silent role or be very active. The key is to pick those that can help advance your business, whilst knowing this is a long-term investment for them rather than a quick return. Look for backers who are aligned with your long-term vision, it’s important to be on the same page.

Also look for backers with different skill sets, diversity of experience will be useful. Keep your circle of investors as small as possible so you can concentrate on what matters. This is a time to be as focused as you can on product and customers and revenue.

Also, get their time commitment. You need investors to give their time, so set expectations with investors before you even bring them aboard: we’re looking for investors who can commit X hours a month to helping us grow. Discuss their availability as part of the raise.

2. Set discrete goals with your investors Here is one of the most impactful conversations a founder can have with an investor once they’re on board: What outcomes are we aligned on over the next six to twelve months? It’s worth rebooting the due diligence discussions, as this aligns everyone now the funds are on board. It sounds demanding, but it will clarify what success looks like in the early stage of the relationship.

A mutual understanding is important for a close and purposeful collaboration. It ensures investors understand your business, roadmap, and ways of working in detail. At the same time, it allows founders to understand how to benefit from investors. 

To avoid misunderstandings and at the same time benefit from your investors’ expertise, I also recommend regularly aligning your roadmap and most important priorities with your investors. In this context, it also makes sense to agree on a set of KPIs. I’m an advocate of keeping your investors close, not at arms’ length, a relationship based on trust, transparency and agreed goals is much more conducive to success.

3. Ensure open and honest communication Investors like to celebrate successes with their companies. However, they should be even more helpful in crisis and critical situations. Involving them in such situations early on, can make the difference between weathering the storm and putting the entire business at risk. In addition, trying to hide critical information has the potential to harm your investor relations significantly. 

Therefore, I recommend communicating in an open, honest, and direct manner with your investors at any time. Never ever try to make things look better than they are. Avoid surprises. Don’t be an ostrich. Investors will find out bad news; trying to hide it will only upset them and destroy trust.

Stay in touch with regular updates. Investors will assume radio silence means trouble. I suggest a monthly update that includes your latest wins and current challenges in product development, sales, and traction, hiring, and financials, as well as any needs they can help meet. Bulleted emails with a succinct focus will be easier to digest and highlight the key issues.

You need to give investors the context to be helpful, and I always added a few personal comments to my monthly update notes to investors describing where we were currently focusing our efforts and asking them to reach out with advice and possible connections.

4. Value your investors They’ve invested in you and your venture because they want it to do well, so make them feel needed for more than their money and use their specific expertise. Every founding team should strive to get the most from their investors, they will feel good if they are able to contribute value and help the founder.

While they won’t be with you day-to-day, they can be transformative when solving specific issues. You should set aside time every month to do a quick rundown and identify where each investor can bring the most value – business development, hiring, or scaling. They will also be pivotal in securing the next round, so keep them close. Don’t feel intimidated by your investors, flip the fear in your head, and ask them that question you can’t answer.

Falling out with your investors is painful, you can see that Corbin and King lost the battle for the soul of their restaurant chain to Minor which has little understanding of its egalitarian spirit, but they have different perspectives.

In the years that followed Minor’s investment, King reportedly fell out with his investors over their plans to franchise the Wolseley name.  King is not just a founder; he had a very personal management style. He visited each of his restaurants often, on his bike. He did the rounds in the dining room, greeting customers and shaking hands. His approach invited great loyalty from both staff and customers.

That’s the intimacy of the founder’s touch that investors can’t replicate – on the day Lucian Freud died his favourite table was covered in a black cloth, lit with a single candle, and left empty. Did Minor understand King’s business philosophy, did King appreciate the success metrics he was expected to deliver? King talked about the importance of the small things.

Clearly, bringing investors in is a triumphant moment for any start-up. Yet, as with every step of a founder’s journey, there are potential landmines along the way. Failing to manage your investors and getting involved in fractious disagreement on strategy and funding can be a huge distraction and hurt, rather than help, your chances of success, sucking time, energy and emotion from a founder. So invest your time in keeping your investors engaged and part of your thinking, use their experience and don’t just see them as providers of funding.

We’re ready to talk...

Wherever you are on your startup journey, get in touch and let’s unpack your thinking together and see where we can help turn your idea into a reality.