Building an Investment Ecosystem: What did we learn at the Accelerating Investment and Innovation Summit?

08 December 2021

Estelle Blanks, CEO, Innovation SuperNetwork

Over the last several years, we’ve worked hard at the Innovation SuperNetwork to develop an Access to Finance Programme which supports regional businesses to secure the innovation funding they need to realise their business ambitions.   

We’ve seen much success in helping businesses, including ParkingPerxRarecanDymanPower Roll and many more develop connections, raise finance and launch new innovations to market. While it’s true that we need to celebrate our success and that of the businesses we help, it’s also important to acknowledge that for the North East, a developed and supported investment ecosystem is crucial for the long-term success and continued growth of start-ups and scale-ups.

In September, we hosted our second Accelerating Investment and Innovation Summit, which was designed to scope the current investment landscape and foster collaboration to find actionable solutions in order to address the investment challenges facing the region.    

We were delighted to welcome keynote speakers Catherine Lewis La Torre (CEO British Business Bank), and Nigel Walker (Deputy Director of Investor Partnerships at Innovate UK). Both organisations demonstrated they are taking the challenge facing regional entrepreneurs seriously with a focus on programmes which help to bridge the funding gap. You can watch what she has to say again at 7:41, here.

Our Cluster Spotlight gave us an opportunity to unveil our regional innovation identity across key sectors to investors looking for high-growth potential opportunities in the North East, of which we have plenty to showcase. Their presentations were top level, but really demonstrated the scale of the opportunity for investors interested in working with regional businesses. Carol Bell from Creative England, David Lynch from the North East Energy Catalyst and David Holmes from BioNow all provided further detail via the SuperNetwork blog on the opportunities in their clusters. Read their blogs here.  

The Summit was a useful and timely reminder that fostering a dynamic investment ecosystem should aim to build a more diverse pool of highly creative and innovative entrepreneurs and grow opportunities for underrepresented groups. It should also help drive a sustainable recovery. We were pleased to welcome William Russell, (Lord Mayor of the City of London) to hear more about their project to invest in more regional businesses who are contributing towards the green agenda through the ‘Finance for Sustainable growth’ programme, which the Innovation SuperNetwork is partnering with alongside the North East LEP and NorthStar Ventures. It will support green innovation and put the North East at the forefront of achieving  its Net Zero target by 2050. As William Russell said, “making the transition to net zero will require between 1 & 2 trillion dollars every year” so “everyone has a role to play, every person, every industry and every part of the United Kingdom.” You can watch what he has to say again, here  

The summit was designed to be interactive so we invited our audience of entrepreneurs and investors to discuss the statement: Democratising Investment: Is tech really the answer?  

This helped us identify some new ideas to reduce the gap between the supply and demand of finance in the North East. The most popular and actionable priorities included:   

  • The Perfect Pitch: find ways to help entrepreneurs “sell” their offer to investors professionally, visually and dynamically online.  
  • Promote the role of different investment types within an ecosystem from early-stage angels to later stage VC funds.  
  • Better educate new angels to help them identify the co-investment opportunities available to them at an early stage, but also highlight how they can still be part of later-stage investment rounds.  
  • De-risk investment opportunities through well-resourced and connected clusters and innovation hubs to help our entrepreneurs access finance and compete globally.  
  • Ensure new deals and investment opportunities are visible and accessible across the UK and beyond.

Our ‘Inky Thinker’ Ben Nightingale did a fantastic job of helping us visualise the common issues faced by entrepreneurs and investors. This visual representation is a useful tool to help us tackle some of these problems through the Newcastle Angel Hub and our Access to Finance programme  working  and collaboratively with our partners across the region and the UK. Click on the image above to study in more detail.

Since the Summit, the British Business Bank has published its Regions and Nations Tracker 2021 and I had the pleasure of taking part in a panel to share our thoughts on the report and its findings, focussing on what needs to happen next in the North East. The report highlights that 86% of equity investment is based in London, the South East and the North West despite these regions hosting just 55% of smaller businesses. 82% of investment comes from investors who are based 2 hours or less from their investees. In the North East 2/3 of domestic investors are based here in the region, which is described in the report as “self-contained”. This very useful and up to date picture has reinforced all of the points highlighted at the Summit:  

  • The region is improving its supply of finance thanks to the availability of local publicly backed funds that are  enabling investment in smaller innovative businesses. The continuation of these locally based funds is critical to ensuring the North East remains a “self-contained” geography. 
  • From this base we need to scale up our supply of finance whilst ensuring that a critical mass of investors and fund managers are located within a two-hour radius from business and innovation hubs here in the North East. We need to be mindful of rural businesses and their specific challenges to access finance.  
  • Whilst we need to scale up our local supply of funders, we need to ensure we also build solid links with  funders and networks outside of the region to support our growth. 

As we can see, there are a lot of moving factors in building what an ideal investment landscape looks like. If we can work together on honing opportunities for both entrepreneurs and investors to interact across digital and in-person platforms we can strengthen our regional ecosystem and build on the foundations already in place, including initiatives like the North East Fund and our own Newcastle Angel Hub. The Hub has helped to establish angel investment syndicates, supported the launch of ‘FundHer North’ and brought co-investment funds like RAIA to the region. If you’re looking for investment for your business, then I’d encourage you to get in touch with the team to see how we can help you on your journey.  

The hard work following the Summit is well underway. As the year comes to a close and we reflect on the success we’ve seen, I’m looking forward to working with our partners, investors and teams at both the British Business Bank and Innovate UK to build on what we have learned through the Accelerating Investment and Innovation Summit, and the many other platforms we engage with, to make a real difference to the investment landscape regionally. I hope you’ll continue to join us on the journey. 

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