INNOVATION and entrepreneurship have always been defining characteristics of the Square Mile throughout its history. Technological change, new forms of trading, and evolving financing models have all played their part in shaping the modern City.
I was, therefore, excited to help launch the Angels in the City initiative’s fifth entrepreneur pitching event, held at Guildhall last week.
This scheme – backed by the City of London Corporation, Lloyds TSB and London Business Angels – is bringing together these three different forms of innovation to support startups and early stage business in the City fringe, including Tech City. The City Corporation recently approved a further two years of funding for Angels in the City, with the ambition of attracting and building the capacity of a further 300 new angel investors. At a time when access to finance is such a pressing issue for entrepreneurs, this mission is crucial to delivering a more diverse funding stream that provides alternatives to traditional bank lending.
The recent entrepreneur pitching event did this by giving innovative City fringe-based entrepreneurs, who were seeking equity investment, the opportunity to pitch and showcase their products in front of potential angel investors.
In April, for example, Joinsam – a Camden-based company – closed a £140,000 funding round with participation from Angels in the City investors. This will help it to take its innovative digital platform (which helps children and families to save, earn and learn about money) to market. Among others, ebook publishing platform ReadWave also raised capital through the scheme in 2012.
Since its launch in 2011, more than £2m of investment has been secured. This has helped tech entrepreneurs accelerate their growth. But we want more people from across the City to utilise their finance and business expertise to support innovation in neighbouring boroughs.
Others are also playing their part in this area. A pioneering arrangement for angel investors and venture capital companies to share office space in Farringdon was announced earlier this month. Collaboration between investors of this kind could prove to be just as valuable as it has been when entrepreneurs have adopted similar arrangements.
The government has also demonstrated commitment in this area by recently introducing a 50 per cent tax break, under the Seed Enterprise Investment Scheme, for digital businesses seeking less than £150,000 in funding.
The capital provided by angels for a new business will not only assist the growth of new enterprises, but it will also create employment opportunities and help stimulate economic growth in the local economy.
The City has always played a crucial role in financing innovation across the country, and angel investors can help to ensure the next Apple, Google or Facebook emerges from Tech City. For more details see www.cityoflondon.gov.uk/angelsinthecity
Mark Boleat is policy chairman at the City of London Corporation.