New Technology Investment Scheme Hailed To Assist West Midlands Become World Class Region By 2010
Publication date: Friday, 24 October 2003
InvoRed, a flagship business scheme for the West Midlands, has been launched to an audience of the region’s civic leaders, high net worth individuals and business community. It aims to help over 200 start-up companies and entrepreneurs, from sectors ranging from telecommunications and optical fibres, to computing, pharmaceuticals, healthcare and biotechnology, raise investment funding of more than £21m over the next three – five years.
Developed by Connect Midlands, the Midlands’ champion for technology business, the InvoRed scheme is backed by Advantage West Midlands (AWM) and the ERDF (European Regional Development Fund). The scheme is designed to provide technology companies, or innovators with technology-based ideas and plans, with expert guidance in attracting investors.
Advantage West Midlands Interim Director, Access to Finance, Mary Martin chaired and facilitated the event, she opened the conference by explaining, “In order to reach our goal for the West Midlands to be recognised as a world class region by 2010 we need more successful SME’s and the stimulation of business clusters. Out of the ten business sectors AWM focuses on, five of them have technology in their name, the remaining five also utilise technology; InvoRed will contribute greatly to growth of these sectors.”
Mary went on to explain that there is currently an equity gap in investment funding between £250k - £2m. She added,”SME’s seeking investment amounts are likely to fall into this gap; there are opportunities to bring European money into the region but it has to be matched by private investment. Companies therefore must be investment ready to secure the necessary funding – InvoRed will play a vital role in grooming West Midlands technology companies to become so.”
Isabell Majewsky, Director, Connect Midlands presented the InvoRed scheme to the audience, explaining: “Many technology companies with growth plans fail to raise the necessary finance for a multitude of reasons such as: lack of awareness of finance options or not understanding the expectations and requirements of investors. InvoRed changes all that and will give the region’s growth-hungry technology companies the knowledge they lack to attract the cash needed to fulfil their ambitions.”
The InvoRed scheme will be delivered by a number of experts through two streams. The amber stream is for early stage companies that will benefit from a series of eight workshops in key business areas, two business forums, similar to that of launch, two intensive two-day boot-camps and one-to-one coaching throughout. The green stream is a fast track grooming programme for companies requiring later stage funding.
A customised programme will take amber stream members through five key phases that will help them to: review business objectives, develop a pitch, identify appropriate target audiences, facilitate introductions and provide them with guidance in structuring deals. Green stream members will provide one-to-one coaching and mentoring with an aim to transfer skills so that companies can become successful on their own.
The launch event took the form of a Business Forum, where companies are assessed by a panel of experts. Receiving assessment on its investment readiness was Stoke based Intelligent Orthopaedics (IO), a spin out from Staffordshire and Keele University which has developed an innovative range of fracture healing devices.
Rennie Petrie and Richard Jephcott are two of the experts that will be involved for delivering modules from each of the streams. Both presented valuable insights to the two streams at the launch.
Rennie Petrie, Kingsmuir Associates, an experienced deal breaker will deliver the financial workshop for the Amber Stream. On the night he drew upon his extensive experience in helping companies find business funding for seed of development capital to accelerate organic growth or for new equity. He underlined the importance of the InvoRed scheme and explained that venture capitalists needs SMEs to invest in, but the chances of the SMEs success is directly related to the financial section of their business plan, which are often poorly structured.
Richard Jephcott, Outside Insight, an experienced company director and advisory board member of Ernst & Young’s corporate finance business (London) introduced the green stream and related it directly to IO’s presentation. Jephcott, who had had prior access to IO’s business plan, presented a thorough breakdown of it looking at six key areas: technology, marketing, competition, management, finances and business. In conclusion he proffered that Intelligent Orthopaedics was not yet ready to gain investment but is a good candidate to benefit from InvoRed’s green stream.
InvoRed’s West Midlands’ campaign will be co-ordinated from a regional headquarters based at the University of Warwick Science Park. It will support organisations at all stages. Companies already in existence and looking to grow will receive help to attract investment of up to £3m, and it can help those at the pre-incorporation stage attract funding of up to £500,000. Visit www.invored.org for further information.
ENDS
Further information is available from Claire Dickens or Brian Dolby on 9, Tom Blount on 02476 323326 or visit www.invored.org
Note to editors:
The justification for InvoRed is based on a key conclusion from the Bank of England report on The Financing of Technology-based Small Firms published in January 2001. This conclusion was subsequently backed up by the Finance for Small Firms – Ninth Report. The report stated that “…there is strong evidence to suggest that many technology companies with growth propositions fail to raise finance because they are not 'investment ready'. Primarily they lack an awareness of financing options and do not understand the expectations of investors.”
Consequently, these technology companies are unable to shape their business proposals into attractive investment opportunities. The Bank of England report recommended further measures on the part of both public and private sectors to address this.
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