Northern Powerhouse Investment Fund II - Meeting the Funders

Standard YouTube Licence

Jane Lambert

I first mentioned the Northern Powerhouse Investment Fund II in an article with that title on 4 April 2024.  On 12 July 2024, I met representatives of the British Business Bank, River Capital, FW Capital and Praetura Ventures at Meet the Funders a post-business breakfast networking event at Sci-Tech Daresbury.  The event consisted of an introduction to the Fund by the British Business Bank, the above video with subtitles but no sound, short presentations from each of the institutions and questions and answers.

In the Q&A, I asked one of the questions that I had raised at the Innovate UK Regional Investment Spotlight – Liverpool on 26 June 2024.  It was: "How do the small loans and debt funding institutions value a startup whose only asset is likely to be a patent application or possibly just an idea for a new business or product?"  The answer seemed to be that they didn't.  Lenders look at a business's ability to repay the loan within the repayment term.  I pointed out that that would be very difficult for startups as most would not have any customers or trading history.   One of the speakers suggested that startups should seek equity investment, possibly from a business angel.  

There may be another possibility.   In his pitching and introduction session during the breakfast meeting, Paul Treloar identified Joe Hood as a banker who lends against intellectual property portfolios.  As soon as the session was over, I introduced myself to Mr Hood and asked him more about his lending policies.  He told me that he was a relationship director for commercial banking at NatWest Bank based at its Ormskirk Street branch in St Helen's.  He is responsible for lending in his region but his colleagues also lend against IP portfolios throughout the country.  In answer to my question about valuation for startups, he said that he used Inngot Ltd. which offered a very cost-effective service. He was willing to be the first point of contact for businesses from other parts of the country who might require an introduction to his opposite numbers.

During the Q&A I received the following message from Manoj Ranaweera: 

"in terms of idea validation stage, if its tech, you can easily assembler volunteer team from https://skilledup.life."

He added 

"So your clients can de-risk the business for investors."

I followed the link and found that it led to volunteers in Africa and Asia who offer professional services in many disciplines to businesses in the UK for a monthly subscription to Skilledup Life.

I also tried to ask the question that I had posed at the Innovate UK Regional Investment Spotlight in Liverpool about flotation on the Alternative Investment Market for companies that make good use of a £5 million equity investment from Praetura Ventures or other venture capitalists and want to expand further but the meeting ran out of time.   In Liverpool, I had been told that an initial public offering on the AIM was no longer possible though I did not understand why.  Flotation on NASDAQ  remains an option for American unicorns as does flotation in Shanghai, Hong Kong and Shenzhen for Chinese ones.   If it is really the case that flotation in London is no longer possible then the only exit strategy for a British unicorn would be acquisition possibly by a US or other foreign multinational.  I was thinking of SoftBank's purchase of Graphcore that had been announced that very morning when I raised my hand (see British chipmaker Graphcore bought by Japan’s SoftBank 12 July 2024 The Guardian).  Since Friday I have found webpages from the Stock Exchange and AIM that continue to invite initial public offerings in London.

There is always a jolly end-of-term atmosphere at Daresbury for the July breakfast meeting.  Attendees are encouraged to dress down for the event.  John Leake sported a sombrero.  At previous July meetings, he has worn an Australian-style corked hat.  A management consultant from Stockport turned up in an embroidered poncho.  Another pitcher dazzled us with his lime green shorts and high vis socks.  There were plenty of Hawaiian shirts.  Hardly anybody wore a tie.   I wore a khaki sleeveless dress that I would never wear to work.

I have mentioned the Daresbury breakfast meeting in Daresbury Science & Innovation Campus on 9 May 2011 and again in Sci-Tech Daresbury Networkhub on 16 March 2024.  They are a great source of information on the trends likely to affect demand for IP services and an opportunity to make contact with the businesses likely to need those services at some point.  Anyone wishing to discuss this article is welcome to call me on 020 7404 5252 during normal business hours or send me a message through my contact page at any other time.