QIB Q2: Investment Funds

Yesterday marked an important day in the life of Briony - I hosted my first entirely virtual online event in my slippers and we celebrated the 27 companies that have raised equity investment and the 24 that are currently looking for investors. On Thursday 18th June with nearly 80 investors and enablers of investment (lawyers, accountants, incubator managers) registered to join, I pressed 'broadcast' on the Quarterly Investment Briefing (QIB), an event that I’ve been hosting for two and a half years to support the investor community locally to network, share and learn. This blog gives you the lowdown on what we talked about and perhaps one of the many reasons why Bristol was named the best place to start a business outside London by Startup Blink this week.

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There are three regular elements to a successful QIB:

  1. Lightning speakers - each QIB has a theme and I select speakers that can contribute and help us have a more lively and productive conversation as a region.
  2. Data - from our partners Beauuhurst, shedding some light on the companies that have raised successfully and more.
  3. Pipeline - insights into who is raising and what success we have seen in the region in the last quarterwhen it comes to equity investment.

So let’s take each of these elements in turn. The theme for the session yesterday was ‘Investment Funds’ - a topic that has been very live in the region for nearly five years, though we haven’t seen a regionally focused equity investment fund land… yet. I offered the audience a run down on the various fund related conversations I’ve had - with universities, with venture capitalists, with budding fund managers and with exited entrepreneurs. There have been hopes of a fund raised and dashed for various people who planned to launch an equity fund and yet found there to be insurmountable barriers to entry, lack of confidence in the pipeline of investments and a lack of local match funding.

In more positive news there are currently a couple of local players actively exploring the possibility and I’m excited, I think they’re probably the best placed people that I’ve come across so far. So my fingers remain crossed that there will be a regionally focused investment fund announced in the not too distant future.

Lightning Speakers

So, with a distinct lack of local equity investment funds to talk about, we focused on two great lightning speakers who are actively supporting businesses through investment locally.

First Thanh Quan-Nicholls from UWE talked about the £1m Digital Innovation Fund which UWE has recently announced. This Covid-19 recovery fund offers between £10,000 - £40,000 to fund 35% of project costs for companies with a base in the West of England (Bristol, Bath & NE Somerset, South Gloucestershire and North Somerset). Eligible projects will need to be digital R&D for businesses. Applicants can be from all sectors but projects must not be considered business as usual activities, and should be designed to create new jobs and new products and services. For the full details of Thanh’s presentation, check out the slides below.

Our second lightning speaker was Ed Stevenson from Startup Funding Club (SFC). I got chatting to the team at SFC after a kind introduction from Paul Jones at British Business Bank (BBB). For background, BBB’s British Business Investments made a £10m investment in the SFC’s last fund. Ed kindly gave us a run-down of the history of SFC, which began as an angel syndicate and is now known as the most active Seed investment firm in the UK, having backed more than 220 early-stage ventures since 2012. SFC supports investors to invest either directly as business angels or through their fully-managed SEIS and EIS funds. Ed explained that SFC prefers to lead a round, which might be anywhere between £100k - 500k. He also emphasised that once they have identified a company they want to invest in, they will mobilise their angel investor network to invest alongside them, and also, for eligible companies they have an option to match fund the investment via their involvement with the BBI regional angel investment programme. As a sector agnostic investor, SFC has already invested in a handful of companies in Bristol including Sixty Pension and The Bunch.

Data

The investment scene has been impacted like pretty much every other sector in the economy by the extraordinary impact of covid-19 over the last few months. You might have heard rumours of lowered valuations, of investors focusing on their existing portfolio and of a shift towards healthtech/medtech deals. Those themes were certainly echoed in the data that I collected from a small sample of the local investor community in the West of England. They have also seen a higher bar for investment, and notably greater demand than supply.

As always, I drew on the more robust data from our friends at Beauhurst in order to build a broader picture. They have conducted research into companies in terms of the covid impact, and I so the data I shared was a little broader than usual, highlights (or lowlights depending on your perspective) included:

  • Of the 300 equity backed companies they have assessed in the West of England, 48 are considered to have critical or severe status. 66 are thought to be experiencing a potentially positive impact from covid-19.
  • 71 companies are limiting the physical services they are able to provide
  • An almost equal number, 67 have seen a surge in demand for their products or services though only 3 are struggling to cope with demand
  • In terms of broader data, we discussed the 27 companies that have raised equity funding since the last event on 28th March. Ranging from £6m to £5k, I observed that there are a similar number of raises as there were this time last year, but that the average raise was lower.

Pipeline

There are 24 companies in the West of England region that have shared their one page propositions for our investor community to review. Ranging from £60k to £2.5m in their ask, and from drones to medtech and much more between, this is just a sample of the great, growing business community in the region. If you are an investor and you would like to access the details of these deals, please drop me an email to request access.

I closed the event by sharing the three themes that had arisen from the simple survey I conducted before the event. I asked our local community what they felt we should be talking about from an investment perspective, and they said:

  1. Funding - from how we achieve the right mix of investment to deliver sustainability to how we prepare for the future.
  2. Business support - from preparing for the 5 year recession to directing funds to stimulate new lines of business for recovery.
  3. Priorities - from ‘beyond profit business’ to ‘localised supply chains.’

The Quarterly Investment Briefing is organised by TechSPARK and kindly sponsored by a group of brilliant organisations (see below). The events are hosted by Briony Phillips, Scaleup Lead for Rocketmakers. If you would like to speak at a future event - please get in touch: Briony@rocketmakers.com or briony@techspark.co

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If you are an investor and you would like to receive the regular newsletter and event invitations for the QIB, please find more information: https://www.scaleupgenerator.co.uk/articles/qib-101

And finally, if you are a founder, you are raising investment and you would like to submit your one page proposition for the next event, please find more information at the bottom of this page: https://www.scaleupgenerator.co.uk/articles/qib-101