Finance alone is not enough

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Support is as essential an element in business development packages for hi-growth ventures as is finance: finance alone is not enough

The London Stock Exchange’s new programme designed to support the development of hi-growth businesses is the latest example of the need for support programmes alongside sources of funding; and support is the subject of a recent Nesta report.

The London Stock Exchange has just announced that it is working with Imperial Business School to offer a programme of bespoke management courses for a small number of ultra-hi-growth companies, together with access to a blue-chip collection of the City’s advisory and investment community, in order to help them to attract private investors and develop the right strategies for growth. Too many of these businesses, says the CEO of the London Stock Exchange, struggle to raise finance and sell out too early, and this programme will prepare them to gain access to the next layer of finance, including private equity and venture capital.

As Nesta, among many others, has pointed out, SMEs with hi-growth potential are the most important segment of our economy; and we might expect to find some of them in incubators, science parks, enterprise programmes and angel syndicates. The Technology Strategy Board has concentrated its funds on specific development hurdles – for technologies, sectors and clusters that have been identified as offering hi-growth potential in the UK. However, these focus respectively on space and on funding – more than on business development.

Level39 in Canary Wharf is an innovation centre that offers all sorts of support for early-stage ventures – from Hackathons, to Accelerators, co-working spaces for startups, and incubator space for SMEs. TechCity has developed its eco-system, where co-working spaces have thrived and specialised, to which supporters and funders have been attracted. Clusters have an energy of their own; and financial, medical, digital, retail, tourism and other hubs are being spawned; and they are taking root in other cities.

Fintech Lab London is an Accelerator programme designed to introduce a small number of carefully selected SMEs with products that might be of use to the banking industry with the help of chaperones from the Canary Wharf banking community. Accelerators like Techstars and Wayra Lab are multiplying, they are extending their scope – in their concern for entrepreneurship, and looking to support issues beyond apps and websites. They are extending their involvement both to earlier and to later stages; and they are becoming more specialised and thematic, and more institutionalised. (Accelerator programmes are moving away from learning sessions and towards personal learning support; away from huge networks of mentors and towards tailored and managed teams of mentors; and away from random relationships with VCs and towards more intimate connections with limited cohorts of funders.) And some incubators and science parks have attached the same importance to business development – to strategy, to the help of mentors, to business learning and to funders as do Accelerators.

Nesta’s recent publication ‘Good Incubation: the craft of supporting early-stage social ventures’ draws together experience from a number of such ventures, but much of that experience applies as much to ventures of all kinds, where its focus is on:

  • Talent spotting and selection – identifying big issues and teams to tackle them,
  • Mentoring – finding and engaging with people who can help on various topics and at the various stages of development,
  • Access to networks – peers, customers, users, investors etc,
  • Co-location – both shared working space, and event and training space,
  • and finally Finance.

The Stevenage Bioscience Catalyst has an Experts Panel, an entrepreneur-in-residence, and a business development executive; it runs regular meetings for its tenants to speak to and engage with one another, more formal “SBC Connect” events where they can present to a GlaxoSmithKline R&D audience, a series of science seminars, joint poster sessions, and information sessions about how to access leading-edge technologies/lab facilities. Belgium’s Plato programme is a full-blown programme of regular meetings for SMEs which have been matched up not only for sector but also for maturity. And each such group is provided with a couple of mentors from large companies.

Can we expect to see VCs and Angel groups working closely with business development programmes in the future, each working in aid of the other?

John Whatmore

April 2014

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An Accelerator Workshop

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Accelerators – a Discussion Forum                                                                          under Chatham House Rules                                                                               Wednesday,18 June, 2014                                                                                                    at IDEALondon, 69 Wilson Street, London EC2A 2BB

An opportunity to meet up with people involved with early-stage projects – Incubators, Science Parks, Enterprise programmes and Accelerators – to learn about and discuss the experience of those involved with Accelerators.

At IDEALondon, UCL’s new incubator in Tech City (where we will have a tour), two Accelerator leaders and a mentor/investor will tell us about their experience; we will discuss problems and opportunities – in problem-solving mode – and what makes for a successful Accelerator; and a Guru will offer us a picture of what Accelerators might be like in 2020.

To book a place, see below.

AGENDA

9.30 Coffee and registration.

10.00 Introductions: John Whatmore.                                                                         Participants: your role and your interests in Accelerators?

10.30 Jessica Stacey, joint author (with Paul Miller – see below) of Nesta’s recent report Good Incubation, will give a quick overview of the different applications and approaches of Accelerators that we are seeing; and the opportunities they present.

11.15 Coffee

11.35 Paul Miller, Bethnal Green Ventures (and joint author of Nesta’s report Good Incubation, and of Nesta’s earlier report, The Startup Factories), will join Simon Jenner, Oxygen Accelerator, and Stuart Hillston, a multiple mentor and investor, to discuss the best and the worst of their experiences – on topics such as: recruiting good candidates, delivering an effective programme, mentors and mentoring, relationships with funders, and setting up and running an Accelerator.

12.45 Buffet lunch followed by a short tour of UCL’s Incubator

2.00 Kate Stuart-Cox, an expert facilitator in problem-solving will discuss with us ways in which aspiring entrepreneurs (and others involved) might be helped to solve problems.

2.30 Group discussions: what in your experience is best about Accelerators; and what are the downsides.

3.15 Tea

3.30 Group discussions continue: what are your plans for the future (changes, developments, innovations); and what is holding you up?

4.00 Groups report back to a full session.

4.30 Final session: Nektarios Liollios, CEO of Startupbootcamp Fintech, just launching here in London, has run Accelerators in a number of cities throughout the world, and is a leading expert on them. He will speculate about the future of Accelerators: might they become the universal approach to generating innovation; and if so, who will lead their adoption; and how might they differ in different circumstances?

5.00 Finish

Cost: £245+VAT = £294.To reserve a place, (places will be limited)e-mail john.whatmore@btinternet.com. Your place will be confirmed on receipt of payment – either by cheque to the Centre for Leadership in Creativity,

138 Iffley Road, London W6 0PE, or by bank transfer to the Centre’s bank, HSBC, sort code 40-03-21, account no 62065010.

Do Incubators and Science Parks need to raise their game?

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With more disciplines involved in R&D projects, with team-working and connectivity increasingly significant, co-working spaces are a recognised model for successful development work – with their intimacy, allied to a penumbra of support – Tech City a prime example. So it goes sharply against the grain for R&D facilities to be run by facilities managers: they need experienced facilitators, not property managers.

A lack of entrepreneurial impetus was the feeling given off by a visit to a recently established incubator. Does its Board need some additional heavy-weight entrepreneurs, I asked myself.

While some of the incubatees were working on projects with excitingly good prospects with widespread applications and/or national interest, others were using their occupancy as a convenient office while their royalties or consultancy income supported the desultory development of their project; and their projects were more like past-times than full-time work, directed at recreations and isolated applications.

There was no significant cadre of mentors with the commercial and entrepreneurial experience and the will to support new businesses that would provide the necessary commercial impetus. Where some incubatees had previously had contact with mentors, they no longer did so. But they did value the contribution they received towards the support from other scientists on the site.

With its design of individual offices (as opposed to open plan) occupants seldom met other incubatees (there was no kitchen or cafeteria) and so lacked opportunities to get ideas from each other and from outside their field.

There was no pressure upon incubatees to find investors, and potential investors were only occasional visitors to the site.

Consideration is being given to setting a limit to the time you may remain an occupant of the incubator, and this will add pressure to making effective use of that time.

Push and pull are both essential elements in a culture of entrepreneurialism, but without them there is a danger that progress may slow to the point where little of value comes out of the process.

John Whatmore                                                                               April 2014

The Centre for Leadership in Creativity

London