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Exploring the case for a regional investment fund

Published on May 9, 2018

Sir Robin Saxby

On Thursday 3rd May, Engine Shed hosted an exclusive dinner in Brunel’s Board Room to discuss the opportunities for and potential impact of a regional investment fund. Using our position as an ‘honest broker’ in the region, we brought together investment focused stakeholders from three key groups – public sector, private sector and owners of nascent fund propositions for the region. The quest to ease the challenges of the local investment landscape is a longstanding one – Engine Shed has hosted dinners before and even explored the possibility of raising a co-investment fund of our own.

With generous sponsorship from TLT and energetic hosting by Sir Robin Saxby (he of ARM Holdings CEO fame), we hope that the dinner has gone some way to raise awareness, engage a wider community and to support the development of some additional sources of capital in the community. If you’re interested to learn more about the discussion, read on.

We talked about the need to raise our brand as a region. Cambridge was highlighted as an exemplar – a region with an organised presentation of data (Cambridge Cluster Map), a thriving angel community, a reputation with VC investors globally, a united front and as a region with even longer tech history than ours. We discussed the need to be less precious about the individual hubs in our region (Bath, Bristol, Cheltenham, Weston-Super-Mare etc.) and leverage our strength as a focal point for wider regional activity. Attendees from outside the region challenged our position on competition vs. collaboration and stressed the need to combine our forces and avoid in-fighting or competing with one another for the same resources.

Given the theme of the conversation, it was inevitable that the conversation would turn at some point to the volume and quality of deal-flow. We learnt about a new online platform soon to be released by Accelerated Digital Ventures (ADV) called the Venture Market (https://www.venturemarket.org/) intended to “power communication and collaboration between founders and investors at every stage, everywhere.” We discussed the Engine Shed’s Quarterly Investment Briefing as a unique effort to communicate investment and pitching events across the region and considered how we can increase the ‘investor readiness’ of our founder community.

The evening was an opportunity to explore some specific fund models currently in development. At Engine Shed we have an increasing number of conversations about the potential for a South West/West of England (I refer you to that earlier comment about a uniting brand!) Fund. Birmingham now has two – one run by Maven Capital and another by Mercia Technologies. The question for us (as regional champions) is what shape that fund should take – to best deliver an inclusive, sustainable and growing economy for the region. Others in the room may be more interested in the best possible return for investors, and others represented the interests of the entrepreneurial community.

Why a regional fund? To inspire the next generation of entrepreneurs, to unlock growth potential and to deliver the region’s first unicorn (whether we need or want one is a whole other question). There was a collective view that the lack of region-specific funds could be contributing to earlier (less impactful) exits and could be negatively impacting on others’ perception of the region – whilst the fund might not need to be region specific, it would certainly benefit from being based here and reflective of our region’s values and entrepreneurial demographic/clusters.

We heard that (according to UKBAA) there’s £1.8Bn invested through SEIS and EIS in the UK, 65% of which is invested in the Golden Triangle (Cambridge, London and Oxford) – which was felt to be a surprisingly low percentage. The unanswered question is that of how much of that £1.8Bn is invested here in Bristol and Bath. How can we influence a greater percentage of those who invest, to do more in their own neck of the woods. We heard that there is only one active angel group in the region – Bristol Private Equity Club, which is thriving with 70+ members and I shared news of the mapping exercise that I’d undertaken to map the existing investment ecosystem in the region.

We left the evening with full bellies, a pocket full of new connections (business cards) and a renewed ambition to ensure the region has a stronger identity, and a steadier flow of capital for the future.

We also left some questions hanging, such as:

  • How can we, as a region, create more opportunities for investors and companies to meet? These need to be high profile enough to attract national and international investors, which will then attract more (in number and quality) companies looking for investment.
  • The need for high-calibre networking opportunities of C-suite leaders in invested and investable companies.
  • What is Engine Shed’s role in all this, is it to simply host more such dinners, and to diversify the attendees as we go or something more proactive?

What are your thoughts, on your role in moving this on?

We’re going to continue to explore a few actions ourselves too…

Engine Shed by @JonCraig_Photos

  1. What is the right/best shape for a regional fund? How do we ensure that our capital as a region is best deployed – to deliver a growing, sustainable and inclusive economy?
  2. How can we better convene/collaborate/coordinate/unite across the region to create the best version of ourselves – for investors, for entrepreneurs, for inward investment and for the next generation?
    1. This is not solely a branding exercise (they’ve caused enough consternation in the past), in combination with point b it is an opportunity to invigorate and better connect the entrepreneur community and kick start ambition, inspiration and marketing of the region – to expose the war stories from entrepreneurs, and from investors.
    2. What is the future of VentureFest? How can we ensure that it is a true showcase of the best tech in the region – not just for potential investors, but for entrepreneurs to learn and give back too.
  3. Dine again – with another specific purpose related to invigorating our investment ecosystem; find more friends who share our common ambition.