What with funding boosts, job fairs, and shared working spaces, East London’s Tech City is showing no signs of slowing in its quest to become the UK’s answer to ‘Silicon Valley’. But how likely is that REALLY to happen?
In a post on The Next Web last year, London tech scene veteran Steve Kennedy asked whether or not London’s Tech city could in fact ever rival Silicon Valley, eventually pointing to one key difference between the tech startup scenes in the US and the UK:
“The VC attitude in the UK is substantially different so that in the US, where companies are encouraged to try and, if they fail, try something else. While in the UK once you fail you’re marked for life. Getting finance in the UK is also much more difficult than the US and there may be many more conditions placed on getting the finance in the first place. The UK is based on old money and old processes which are hard to change, but maybe the emphasis on East London will somehow get the old city money into new startups as they’ll now be neighbours.”
A year on, Steve Kennedy has announced an event to try and get more money invested from the City (i.e. 
bankers) in local tech startups. “CityMeetsTech hopes to get high net-worth City bankers excited about investing in early stage tech startups”, says Kennedy. “This can kick-start the UK tech eco-system so we can genuinely match Silicon Valley. There have been a few successful exits from the UK, but money has generally been acquired from the US.”
CityMeetsTech is taking place on Thursday December 1st, at law firm Taylor Wessing‘s offices in London, who are co-sponsoring the event alongside DFJ Esprit. “We’re aiming for around 100 people from the City, and around 20 tech people who can be presentable and speak their language”, adds Kennedy.
So, the event aims to get potential investors from the City interested in tech in the first instance, with a view towards demonstrating that there can be successful exits and it can be “de-risked”, through initiatives such as the government’s Enterprise Investment Scheme (EIS), as well as highlighting that risks are an inherent part of the innovation process. The event hopes to raise interest initially for startups based in Tech City, and it’s hoped there will be more similar events to follow.
“Next year we’ll hold follow-up events where they can actually put money into something”, says Kennedy. “This could be straight-forward startup pitches, something like ‘UK AngelList’, or even introductions to existing investment vehicles, or maybe even setting up a fund.”
How did CityMeetsTech come to fruition? “The initial idea came about as I tried to get a friend, James Rowsell, who’s the former CEO of MF Global, involved in the technology scene”, says Kennedy. “He’s always said he doesn’t understand tech. But he happens to own a stud farm and races horses. I introduced him to Jason Trost of Smarkets, as I know he understands gambling. He said ‘great company’, to which I replied ‘that’s the most techie company you’re likely to see’, and he got it. Jason had mentioned that startups need more early stage investment from the City, because once you’ve got traction this can then progress to venture capitalists. That’s how it all began.”
An advisory panel was then set-up to set the wheel in motion, consisting of Steve Kennedy, James Rowsell, Jason Trost, Scott Sage (DFJ), Anil Hansjee (former Google M&A and partner at EQT), Glenn Shoothsmith (CEO BookingBug) and Sean Setton-Rogers (Profounders) to get things moving to where they are now.
At the event, there will be talks from Kulver Ranger (Mayor’s Director of Digital and Environment), Eric Van der Kleij (CEO Tech City investment organisation), and a panel chaired by Glenn Shoosmith consisting of Anil Hansjee, Jason Trost, Spencer Hyman (former COO of Last.fm, now CEO Artfinder), Tom Allason (sold eCourier to TNT, now CEO Shutl) and Simon Cooke (DFJ).
The event will conclude with a 15-minute talk by a representative from Taylor Wessing, on the tax advantages of investing in startups.
Although the event is aimed primarily at CEOs and big-wigs from the City, there is space for entrepreneurs, angel investors and such like, so you can contact them if you’re keen to attend. You can see the full schedule for yourself here.
"Speak the language of finance people? American English? British English? Geek talk? I'm confused."
In my experience, people working in the City are more interested on digging into numbers, risk and nitty-gritty details than some other investors, because that's what they deal with on a day-to-day basis. They're likely to be less interested in traction than in what value the startup's going to create and how they plan to monetise it. And they typically adopt a fairly "no-nonsense" approach.
I was CTO of a dot-com back in 1999 that had been seed-funded by a group of HNWIs. The chairman was a semi-retired fund manager and I have a very clear recollection of a board meeting where he asked "Well, that all sounds great but how are you going to make money?"
If an entrepreneur can answer probing questions confidently and credibly, if they understand what the key risks and dependencies are, then they stand a good chance of performing well in front of a City audience. It also helps if they understand their motivation for investing (particularly how EIS works) and the alternatives that are open to them (City folk are typically familiar with and have access to a far wider variety of investments than the average Joe).
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LikeJack, don't worry, we did our cust/dev and spoke to numerous bankers to make sure this has a chance of working. We're targeting mostly M&A guys who understand the finance (not an issue for an early stage co with no rev's) but also business models - though it's open to HNW's from the City/PE funds.
I was surprised to learn from several guys I met with that they keep an eye on all of the emerging tech co's (we catch up every month at Automat - great breakfast btw). I'm not talking about the inMobi's and Wonga's of the world (whom they're already speaking to about IPO'ing down the road), but smaller companies that will impact their deal flow in the future. They definitely understand the risks in investing this early, but they would rather syndicate with other angels and 'geeks'. We're not targeting the guys you raised money from, semi-retired - Hermes tie wearing - grey haired - lunching ex stockbrokers. These are guys who make significant cash sums and a) want exposure to high growth high risk investments for personal reasons - not just tax relief b) are looking for a way to get involved, if even for just opening up their personal black books of contacts of potential customers and partners and c) for something to talk about around the dinner table :)
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Like“We’re aiming for around 100 people from the City, and around 20 tech people who can be presentable and speak their language”, adds Kennedy. Speak the language of finance people? American English? British English? Geek talk? I'm confused. Also, are you attending? X
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LikeYeah surely the bankers are investing more money, thanks for the info...
http://www.studyvalue.com/
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