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bring in high-net-worth individuals as co- investors. The VC model is a higher volume play with added risk.”
Jonathan Caswell
Rob Hayes of Penningtons Manches was surprised by the suggestion that there was a funding gap in the £1m-£5m bracket. He said that recent data from Beauhurst showed that two of the top four most prolific VCs are active in this space. It may be a regional issue and these tech-focused VCs tend to focus on cities such as London, Cambridge and Oxford rather than the wider Thames Valley.
Simon Staples of law firm Blake Morgan noted: “There is an active venture capital investment scene (for example in/around Bristol) which can provide funding at £5m or below. The same funds will look at Thames Valley tech companies.”
Rowan Turrall
“Private equity in the UK is super conservative,” observed Griffiths. In contrast, “US venture capital companies tend to be less risk averse. Many are looking at UK assets to invest in,” noted Davies.
The need for validation of your business can be met with the evidence of steady organic growth, said Holland. “If the timing of a product is critical, then you’ll need to look at getting investment or grants early on.”
David Griffiths
Hammond highlighted the potential and pitfalls of seeking Enterprise Investment Scheme (EIS) funding. “I came across a possible angel investor who appeared interested in us for tax savings through an EIS. But they hesitated – it’s hard to persuade people,” he said.
If finding suitable funding is a challenge, tackling the necessary paperwork can be an added headache. Barnett compared the “nightmare of paperwork” needed to obtain funding from Local Enterprise Partnership (LEP) with the relative ease of sourcing funds from the National Aerospace Technology Programme (NATEP). “And with the LEP you have to capitalise the funding which restricts it to things like purchasing assets. For NATEP, you can include intangible costs like man hours.”
Simon Staples Branding the Thames Valley
Success for tech businesses in the Thames Valley could be held back by a lack of vision for the region. Clarke said: “It can be hard to get funding in the Thames Valley. People don’t see the great innovation going on here. We lack physical locations, where businesses can discuss ideas and collaborate. Co-working space in Reading is charged at London prices – it’s too expensive for start-ups.
Lee Atkinson
Hayes agreed that the area could do more to boost its appeal and identity to entrepreneurs and investors. He commented: “The Thames Valley is a pretty nebulous region made up of very different economies and, as a result, this could be a
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factor in diluting the ‘tech identity’ of certain parts of the region. From spending time in our San Francisco office, there is definitely a focus on the ‘golden triangle’ cities, Oxford, Cambridge and London,” he said.
Clarke warned: “The Thames Valley risks sleepwalking into obscurity.”
Rowan Turrall at lawyers Boyes Turner was more positive. She thought more new funding was coming in to the Thames Valley. And Moore Stephens’ Nigel Honnor highlighted developments like the Thames Valley Science Park that offers support to entrepreneurs.
Finding talent
Finding the right talent is another challenge for growing businesses in the region. Crawford said: “Recruitment is the sole inhibitor to our growth. I don’t think it’s just the Oxford area, finding good software developers is a national problem.”
Both Holland and van der Knaap said their businesses also experience similar difficulties. Davies thought it was difficult for the Thames Valley to entice skilled people away from London.
Barnett said FliteTrak aims to engage early with potential recruits. “We spend time with students at universities and colleges. We want to capture their creativity and engagement, but it’s hard work. Universities tend to be more interested in how we can support them, rather than the other way round. I also think curriculums are going in the wrong direction – universities don’t engage with business to find out what skills they need.”
Hammond said he made sure ScopeMaster recruited “dream teams” by spending a lot of time finding the right people for its software development team. “I cherry- picked the team I wanted who have a blend of creative and engineering disciplines,” he said.
Griffiths said FISCAL plays to its strengths to attract talent away from bigger players. “There are plenty of disillusioned people working for large companies who want to move on. They are looking for a different lifestyle with more meaningful work, which is what we can offer them.”
Megias Homar added: “At Open Cosmos we’’ve put together a great team with a passion for space. The bottleneck for our growth is finding hardware and software developers who specialise in the space sector. We started the business in London and continue to attract people now we have moved to Harwell Campus.”
Recruitment is less of a challenge for In Cloud Solutions, but attracting graduates isn’t easy. Caroline Atkinson said: “We are not an innovator company so it can be harder for us to attract software developers.
THE BUSINESS MAGAZINE – NOVEMBER/DECEMBER 2018
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