Newcastle Startup Week
Presentation by Toby Fenwicke-Clennell, Investment Director, Q Ventures.
Solicitor Max Gilchrist of Square One Law recently attended the Funding and Finance session of Newcastle Startup Week on the Wednesday. Here, he writes about a few of the key takeaways from what is, he believes, an important series of events for entrepreneurs and business leaders.
- The North East is a really attractive place to start a business and to invest.
One of the presentations, made by Toby Fenwicke-Clennell (pictured), Investment Director, Q Ventures clearly highlighted some of the North East’s attractive qualities for investment into the region. Essentially, the North East is cost competitive, talented and resourceful.
There was a real buzz during and after the sessions, especially between the talks. It was a great opportunity to speak to not only entrepreneurs’ from the region but also people from across the country and the continent. For example, there were representatives from a communication’s company based in Paris, Peritus, which is looking to grow into the UK market and has chosen Newcastle as its base. There was also an ex-wealth manager who worked in Munich who is considering starting a business in the North East. This really highlights how the region is attracting global attention for its potential.
- Seeking investment in the North East still has its challenges
One of my favourite speakers of the afternoon was Duncan Davies, CEO and Co-founder of Notify Technology Limited who shared his experience of finding investment. He described going down to London to speak to a potential investor “it was less Dragon’s Den and more Fagan’s Flat” – definitely my quote of the day. It seems a common theme that entrepreneurs feel obliged to go cap in hand to London when seeking investment, however, a big takeaway from this event was there are a number of varied local funding options for entrepreneurs seeking investment in the North East.
Duncan spoke of how he eventually found investment from Mercia, manager of the North East Venture Fund, which specialises in the tech sector and in particular noted their support and backing of the management teams of the businesses they invest in.
- Things to consider before seeking investment
There was a number of useful tips for seeking investment at the event but I think the key point is, understand your business before you seek investment. This sounds obvious but drills down into a number of issues:
- Consider why you need the funding; whether you actually need it and if you do, how much do you need and what would it be used for?
- If it is debt funding, how much debt based on your cash flow are you able and prepared to service? If it is equity funding, how much of your business are you prepared to give away and what are your ‘redlines’ e.g. are there any investor controls you are not prepared to accept? An amusing analogy provided was ‘understand that having investors in your business is like having someone living in your home who can come in every now and then to tell you to change your curtains’.
- Use your judgement to find the best funding partner and type of funding for your business.
- Get investor ready by getting your ‘ducks in a row’ – consider what an investor would need to know about your business e.g. suppliers, customers, IP, employment and ensure all your paperwork is in good order.
Finally, it’s important to have a pragmatic lawyer who understands your business to help guide you through the process.
