In the Spotlight with Senior Innovation Manager Andrew Hodgson

12 February 2024

Using his experience in working in multiple technology startups and developing a business of his own, Andrew Hodgson, Senior Innovation Manager at Innovation SuperNetwork works with businesses to help them access innovation finance support. We spoke to him about the importance of an investment ecosystem and how our Investor Readiness Scale can help businesses prepare for funding.

‘You don’t find many successful working-class people raising funding, and working-class people can often be a bit too afraid to have an idea, or try to go with one’

There is a notion in business called the ‘innovation valley of death’. This is when a business needs funding for development and R&D but the investment opportunity isn’t de-risked enough to gain external investment. Sometimes this is down to barriers faced by people from minority groups or certain geographic and economic backgrounds, and sadly these barriers are very real for businesses across the UK regions, including those in the North East.

This is partly because of the social economic makeup of the region. You don’t find many successful working-class people raising funding and are often too afraid to go with an idea. I’m from a working-class background, so I am passionate about figuring out how we can push investment forward. It’s quite scary sitting down with investors and asking them for money when you feel as though you don’t belong in that space. One of the reasons I wanted to get involved with Innovation SuperNetwork was that, as I was going through this process of developing a business and developing a product and looking for external funding I realised how tough this is in the North East. Through my work now I get the chance to help people overcome the pitfalls that I experienced.

‘If you’ve got people that you recognise in that group of investors, you’ll go to them and then they’ll be more likely to do it again’

How can the development of a strong financial ecosystem help boost access to funding?

I’m a founder and I believe that founders have a small amount of time to accomplish the many tasks larger businesses might have several people working on. Business development and securing finance is one of these tasks.

By establishing a strong and diverse regional investment ecosystem, we can help to minimise the amount of time founders spend on this task and make it easier for them to overcome some of the geographic and economic barriers they might face because they’re based in the North East.

Strong financial ecosystems also help invigorate people who might want to be investors. Those with little bits of money that may fancy investing but haven’t got a clue how to do it. Trying to empower people in the region, whether it is investees or investors has lots of potential for strengthening the ecosystem. If you’re pitching for investment from a group of people that you recognise as being ‘like’ yourself, it instantly negates that feeling of imposter syndrome and helps to build confidence in regional founders.

Our Investor Readiness Levels can play a part in building a funding ecosystem in the North East by providing businesses with a scale of investment readiness which is recognisable. This way they can reach out to the right people at the right stage of their investment journey.

What are investment readiness levels?

In product development and engineering, you’ve got technology readiness levels and manufacturing readiness levels. And so, when you’re first talking to someone, you just go, ‘oh, right you’re at technology readiness level 5, which means you’ve tested it in the laboratory’. Or ‘you’re at manufacturing level 3 where you’ve started to figure out what your supply chain is going to look like’. Our approach with investor readiness, is to work against a framework that systematically supports businesses to be in the best position possible to secure investment or funding.

The scale helps businesses understand how far along they are in preparations for investment from level 1, where you have an idea barely formulated, up to level 9 where you have a full business plan and go to market strategy. When I meet with a client, it means I can sit down with them and say, ‘OK, you’re at level 3 but with our support we can get you to level 5 or 6 over the next few months.’ Each business journey is different, and for those at the right level, we’ll connect them to our network of investors and help them pitch their proposition.

What are your tips for businesses when it comes to improving their chance of accessing innovation finance?

Engage with your end customer as early as possible. The sooner you talk to them, the sooner you can understand how your product or service will be received and this should give you confidence to go to investors and say, ‘I know this product will be a success, the market loves the idea.’

Andrew can be found on LinkedIn and via email at andrew.hodgson@supernetwork.org

Find out more about our Investor Readiness Levels: supernetwork.org.uk/finance/investment-readiness-scale/

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