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Financing the Digital Age in Manchester

John Nuttall follows the money to the Lowry Hotel

Published on September 21st 2010.


Financing the Digital Age in Manchester

Those of you that can't get enough of Dragons Den on TV will probably be familiar with Online Dragons Den, which features Julie Meyer, the founder and chief executive of Ariadne Capital, a high tech venture capital firm.

‘Most people in this room have a better credit rating than their bank’

She coined the phrase “a world with no money,” to describe the post-crash financial landscape that today's entrepreneurs now face. While “a world with considerably less money” would probably be a more accurate description, North West entrepreneurs are nonetheless living in ‘interesting times’, as the old Chinese curse goes.

Manchester, the birthplace of the modern computer, has always been a hotbed of technological innovation, so it seemed particularly appropriate that the British Venture Capital Association (BVCA) should choose to hold its inaugural conference on 'Financing and Funding the Digital Age' in Manchester (ok, technically in Salford) at the Lowry Hotel last week.

It featured a heavyweight line up of speakers and panelists including Meyer herself, who apparently still has some money to invest.

The first speaker was J P Rangaswami, the chief scientist and head of voice at BT Innovate and Design. He highlighted how much the financial climate had altered in the last couple of years by pointing out that ‘most people in this room have a better credit rating than their bank’. With tickets to the event costing £250 each, he was probably right.

The other big change that Rangaswami noted was in the nature and habits of the consumer, describing a modern teenager as ‘someone who can write and send a text without taking their hand out of their pocket.’

An interview with Stefan Glaenzer threw some light on the nature of venture capitalists. He's been a serial entrepreneur since leaving university and was the first investor in last.fm, which was sold to CBS for $280m. He currently has investments in 25 companies.

He described business plans as ‘a sub-genre of science fiction,’ pointing out that venture capitalists never say 'no', preferring a long, drawn-out 'maybe'. He typified VC investment as ‘spray and pray’ - investing in lots of companies knowing that 90 per cent will fail while hoping the last one in ten will reap a hundred-fold return.

One panel asked: “how is the North West and UK's infrastructure helping entrepreneurs compete on a global scale?” A fair question with the imminent demise of the North West Regional Development Agency (NWDA).

One panellist had good news for North West entrepreneurs on the hunt for VC cash. Fred Mendelsohn, chairman of AXM VC, is tasked with running the Creative Capital Fund which has £180m earmarked for investment in North West Media and Technology businesses.

During the panel discussion, that evergreen issue of London luvvies being unwilling to abandon Notting Hill for Salford inevitably came up, with the first mention of MediaCity, Peel Media’s enormous development on the Quays. John Ashcroft, chief executive of pro.manchester sagely pointed out that Manchester's challenge is to retain talent here rather than attract it from London.

Whilst interesting overall, the BVCA could learn a trick or two from annual music seminar In the City, which long ago learned that these events are all about networking. A couple of fifteen minute breaks and an hour for lunch really didn't leave time for the most dedicated of schmoozer to take advantage of the event.

A prime example of new technology in action was provided by a crushingly dull panel consisting solely of lawyers. As I sprinted for the door in search of the nearest branch of Dignitas, I noticed that the whole audience were feverishly texting.

Maybe they’d all got hold of Fred Mendelsohn’s email address?

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