roundtable: IT skills & funding 41


companies were not providing as much working flexibility as employees would like.


Tim Walker: “A social media consultancy recently told me that it knew companies that provide all manner of virtual collaboration tools to allow most of their staff to work from home all over the world, and have those ‘water cooler moments‘ online. Some people do want more flexibility, but it still comes down to staff acceptance of a culture change.“


He exampled one CEO, just returned from Houston, now hoping to get a grant of £300,000 funded from the US oil industry. “The thing is, he‘s getting grant money from the US rather than the UK.“


Sue Staunton: “PE funding all but disappeared during the recession. The majority of funders have been shoring up their existing investments. For newer ventures, funding still is very much friends and family or wealthy individuals, increasingly from Russia, the Far and Middle East – and these are often funding for strategic investment reasons.“


Industry funding was also now happening, with early-stage companies being supported by more established peer companies. “Larger companies (noticeably Japanese) are seeking to secure ideas and new product into their business sector.“


Recurring revenues make Sue Staunton


“It needs to be very carefully managed. People at home can get lonely, people can abuse it, and you have to get staff together now and then to avoid the risk of them ‘going native‘, particularly if they work long-term on customer sites.“


Falconer noted that relocating people across the country to a business location could be very unfair. “Disrupting family life, schools etc, is a very risky thing to do, because the business and particularly technology world is so dynamic, so transient, that the business could be gone in six months time and someone is left stranded in a place they simply don‘t want to be.“


Weaver asked if high transactional costs, Stamp Duty etc, when moving houses was an obstacle in getting people to change to a new job.


Falconer commented that companies didn‘t pay removal costs for senior recruits so readily nowadays because people changed jobs more often, and after all, technology allowed people to work globally 24/7.


McMillan agreed that paying removal costs was not routine in organisations but used in exceptional circumstances.


Focus on: funding


Murray asked about current sources of technology funding and whether it was more readily available from overseas than from the UK.


Funding availability in general had definitely improved in the past few years, said Weaver, but: “… initial finance for start-up and early stage businesses still invariably comes from friends and family. Inevitably, they often return to these backers or wealthy ‘angels‘ for second and third tranche funding.“


“Private Equity (PE) institutions may say they are open for business for pre-revenue companies but I haven‘t seen that since 2008.“


funding easier Hawkins said his company had successfully leveraged its data centre assets to secure finance. “I have always tried to do without equity funding, and as 98% of our business is recurring revenue it is relatively easy to gain finance. We have also used the Government- backed Enterprise Finance Guarantee Scheme for additional funding.“


Arqiva‘s success in the European and US broadcast world has underpinned the company‘s debt funding for M&A activity or investment, said McMillan. “We have infrastructure and easily forecastable revenues. For us the debt market has improved considerably in the past year or so, and we‘ve just completed a multi-billion re-financing scheme, switching from bank loan financing to bonds.“


Funding for Arqiva is very much an international market, so the company raises financing in multiple markets. This means that Arqiva has to market itself internationally. “There are several major centres for raising international funding. London is still a major international financial market. There‘s a lot of money here.“


Walker said family-owned Taylor Made had largely self-funded its growth through success in its computer solutions sector and asset- financing. “At times in a company‘s growth vendor-funding becomes available. That‘s true at the moment with a lot of equipment, HP in particular, effectively being rented by us to host the services to our customers.“


Well done the


Government . . . Walker highlighted the value of high- net-worth individuals acting as ‘angels‘ to support promising businesses. He praised the Government for encouraging investment through the tax-efficient Enterprise Investment Scheme. “EIS is hugely attractive to such individuals.“


Weaver agreed: “EIS has been very helpful indeed and made a big difference. I see


THE BUSINESS MAGAZINE – SOLENT & SOUTH CENTRAL – JULY/AUGUST 2013 Matt Hawkins . . . but you could still do


better Staunton pointed out that finding the right type of Government funding for different companies was a constant issue. “If you go to the government‘s Technology Strategy Board website there are continual competitions for very narrow spheres of application. Niche companies have to be on the website every day to see funding opportunities that they can apply for. And because they are so niche, there may be only one or two companies able to pitch for the funding. Having such narrowly defined criteria makes it so much more difficult for people to access help.“


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wealthy people now investing in companies, when they wouldn‘t previously without the EIS relief.“


Walker: “It‘s a terrific scheme, but even without EIS, people are becoming keen to help businesses that they know and understand.“


He added that the key to PE and high- net-worth funding support was strong contracted recurring revenues, either in established companies or those providing unique technology. “Those are the two real sweetspots, and if you have north of 60% of your revenues contracted then you are a very interesting play for such investors.“


McMillan noted that the personal track records of a management team were also key to investment decisions.


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