Please find below a list of exciting new job opportunities that have recently emerged within the Capital Enterprise Network:

• Procurement Expert – GLE
• Administration Officer – GLE
• Programme Manager – Innovation in Giving Fund – NESTA
• Love Wimbledon Business Improvement District – Merton Chamber of Commerce
• Business Engagement Manager – Merton Chamber of Commerce
• Greening Business Operations Manager – Merton Chamber of Commerce
• Greening Business Adviser – Merton Chamber of Commerce
• Job Broker – Camden Town Unlimited
• BCG Account Manager – Grant Thornton

I was at two events last week that got me thinking that we need to radically think again about what we do in London.

On Tuesday the 12th March I was in Liverpool for the Global Entrepreneur Congress where an audience of 3000+ entrepreneurs heard what for me were 2 important facts:

1. That the Northwest Region of England (home to both poster boys of 1980’s deprivation Liverpool and Manchester) now has significant lower unemployment (9.3%) than London (10.2%). The fact that London is now the region with the fastest growing level of unemployment should shame us all.

2. The respected Kauffman institute repeated the research findings that almost all the new jobs created in the USA are created by companies that are less than 5 years old. This amazing fact accounts for the fact that partly through a bi-partizan effort to support entrepreneurs by all USA Federal, State and City governments the USA is now creating jobs at a rate of almost 3 million per year. More and better entrepreneur is what this fantastic presentation points out is a necessary if USA and by direct implication London, is going to create jobs.

Therefore, I was interested to hear what all the 4 major candidates for the Mayor of London had to say on the subject of job creation and entrepreneurship at the Mayoral debate organised by the London Business Board last Thursday evening. The news I am saddened to say was extremely disappointing. Not a single candidate had anything to say about tackling London’s growing unemployment. Not a single candidate said anything practical about how to enable and increase entrepreneurialism in London. Instead we were treated to the usual banter about who could best manage the TFL infrastructure, who best could control the unions, who best could ensure the police do their job of policing the streets and who can best promote London to oversee businesses.

In left me thinking, in a room of 200 so called representatives of London’s business community, if I was the only person in London that thought none of the candidates cared or had a clue on how to tackle London’s economic crisis. The questions I want answers to from the candidates for Mayor of London are:

▪     Do you care about employment in London- if so what are you going to do about it?

▪     Do you know that businesses less than 5 years old create all the net new jobs and if you do what are you promising to do to make London an entrepreneurial city?

▪      Are you ashamed that you have an agency called London Partners whose job is to attract foreign firms to set up and create jobs in London but nothing (no agency, no funding, no direct support) to encourage and enable Londoners to become entrepreneurs? Based on empirical evidence if you cared about job creation where should you put your investment? You guessed it in supporting London’s entrepreneurs, in helping them not overseas firms to de-risk their investments in this city.

▪       Are you aware that City leaders from across the world are passing laws to make it easier to start and scale a business, providing tax breaks to encourage investment, releasing unused public buildings and land and providing grants to set-up incubators for the next generation of entrepreneurs and using tax revenues to fund education and training programmes to encourage and support both young and old to give it a go and become an entrepreneur? I suspect not so if they were interested I recommend they look at the 50+ initiatives that Mayor Bloomberg of New York is pursuing in a co-ordinated programme to make New York’s economy more than Wall Street or better still look at why a country like Israel (with a population a little less than London’s) is a world leader in creating the next generation of entrepreneurs and jobs.

Today we have the release of the Experian/ BBC Local Growth report that finds London is the number 1 region for having employers in sectors (primarily business services) that have the best growth potential but is the worst performing region in England for the % of firm that could potentially export or potentially grow.

The Experian/ BBC report concludes that simply targeting sectors identified as having high growth potential, will not create the level of growth the economy needs. There are champions in every sector and the level of job creation varies in each and it is these “business Champions” that will create the vast majority of new jobs in the economy in future years.

There are several characteristics, which business champions have in common:

1. Young, small companies – those less than 10 years old and with less than 50 employees
2. Firms with directors showing entrepreneurial appetite and experience in other recent successful business ventures
3. Involvement in some form of international activity e.g. exporting

All in all these reports and findings demonstrate that it is not surprising that London is failing to create sufficient jobs for its ever growing, predominately young population. The recent Office for National Statistics report showed that between 2002-2010 we have has a 25% increase in the number of firms in London that employ no one other than the founding directors and that this non-growth, non-employing businesses now make up 78% of all firms operating in the Capital.

So no more complacency- what we need is a Manifesto that will make London yet again the Entrepreneur dynamo for the county.

Capital Enterprise has been offered 3 pop-up units in an exceptional location for 11 months beginning immediately.

WHO?

You have to be a Capital Enterprise member to be eligible, so if you are an individual you may wish to contact one of our members and discuss collaboration.

WHAT?

We are looking for bold, edgy and innovative ideas in enterprise support. Do you want to showcase your clients’ / students’ products, prototypes or services? Are you thinking of doing market testing with the members of the public? Whatever it may be, this is an incredible opportunity to make it happen!

Please click here for further details 

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Two years in and apparently now is the time that the government, specifically the Department of BIS, decides its all about implementation and not policy change. As the dust settles we can now see that the hard cash that the governments is prepared to spend to support entrepreneurship and small business growth boils down to one strategy and four broad programmes.

They are all linked to a determination to focus what are extremely limited resources on supporting a relatively small group of SME’s to grow. As NESTA reported last year, about 6% of all small businesses account for over 50% of the job growth in the UK. These growth businesses, the so called gazelles, are predominately established businesses, with an experienced management team, respected brands within their sector and sufficient internal cash to fund growth.

The government’s view is that is a relatively low risk strategy to focus on helping those already growing rapidly to grow a little more, and a little faster.

So the Department of BIS strategy is to fund programmes that can help these high growth businesses ( under 5000 in London) to grow.  The 4 arms to this strategy are:

1. 1.     Focus on Coaching the High Growth SME.

The government’s flag ship programme to support High Growth businesses is of course Coaching for Growth, whose website went live last week. Delivered by Grant Thornton, PERA, Winning Pitch and Oxford Innovations I hope to reveal more how it will be delivered in London in the next few weeks. But essentially it about providing tailored high quality expertise that can open up new opportunities and overcome barriers to growth for a relatively small number of businesses.

1. 2.     Focus on Exports.

If only we could get more firms to export – http://www.telegraph.co.uk/finance/globalbusiness/9090333/Helping-Britains-smaller-companies-to-go-global.html is the present governments thinking. So it has doubled the number of SME’s the UKTI needs to see and support. The programme to be delivered in London by Capital Enterprise member GLE is not to be confused with the UKTI Tech City initiative which is unique to London and is presently focusing using the Olympics as a catalyst to create more inward investment from international tech companies.

1. 3.     Focus on Innovation.

The government is using a combination of tax breaks ( R&D tax credits), the competitions and awards offered by the Technology Strategy Board and changes to the way research councils fund universities to encourage businesses to invest in R&D and universities and others to support innovation. London is well placed to take the lead in this area with its universities and knowledge based business clusters and new initiatives funded by both the government ( such as Innovation catapults) and the EU will be announced soon.

1. 4.     Focus on Finance.

The government has focused most of its efforts to date on getting the banks to lend ( by underwriting or providing them with cheaper credit). The Chancellor is likely to announce more news on this front in the budget along with confirmation of the SEIS tax breaks for investors. Coaching for Growth will also be supporting the top 6% to prepare business plans, write investment proposals and raise growth finance.

Other initiatives, previously funded by successive governments, will from now on be either outsourced to LEPS to fund ( no joy there for London) or be assigned as Big Society Initiatives that are either to be self-funded (Start-up Britain) or delivered by volunteers mentors or advisors(Mentors me).

So gone, for at least the next 3 years, is government cash to fund face-to-face advice for start-ups and the 94% of businesses not deemed to be high growth. Out is funding for training (again especially missed by start-ups) and direct support to encourage entrepreneurship amongst the disadvantaged) despite Dept of BIS own findings that face-to-face advice is vital in helping the unemployed and disadvantage setting up a business or going self-employed.

Just as importantly everything is having to be delivered with a lot less money.

Of course other government departments like Department of Work & Pensions have their initiatives to either support the long term unemployed to go self-employed or for SME’s to employ the young unemployed and Capital Enterprise members are playing a big role in their implementation.

The Mayor of London when re-elected may also decide to look again at how they can support SME’s to start, survive, grow and create jobs and wealth.

However, the time is coming when organisations in London that support entrepreneurship need to decide how they are best placed to help deliver the governments agenda. Alternatively if they are not geared up to deliver export, innovation or coaching for growth support will they be able to live without funding in order to deliver services to those SME’s and potential start-ups not presently favoured by this government.

These issues will be the theme for Capital Enterprise next member meet-up on the 23^rd March 10-12 noon at the British Library.

In February, Capital Enterprise will be running or involved in a series of free events and special offers designed to inform entrepreneurs on the best and latest ways to finance a high growth business and subsequently provide those  with the  support and contacts to raise the money they need .

We have decided to theme the events and offers under the banner “Finance in Feb”. The full list is below:

1. Leading for Business Growth:                  

2nd February                  

2pm-5pm                  

@ UCL

Do you have a business model and management team that can achieve the type and amount of finance to fund high growth.  Not sure then you should consider signing up to this workshop led by specialist from  the world renown Warwick Business School  http://capitalenterprise.org/event-details/?eid=123

2. Angel Fun: 

13^th Feb                 

4pm-7pm                 

@ The British Library Conference Centre

The British Business Angel Association in partnership with Capital Enterprise will be running through why now more than ever is a good time to look at Angel Finance to fund growth-http://www.bl.uk/bipc/workevents/angelfun.html

We will look at the how the Government’s new Seed Enterprise Investment Scheme (SEIS) initiative will work in real life When launched in April this year SEIS will offer angel investors up to 50% tax breaks for a total of £100k invested in start-ups and each start-up that meets the criteria can receive up £150k equity investment under this scheme. There will be also an opportunity to question Angels on what they look for, how best to approach them and how they value an early stage business. On the latter point I do recommend you look at a recent blog by Seed Camp  or the following slide-deck

3. Finance in February

17th February

10:30-12:30

@UCL

Capital Enterprise will present its comprehensive guide to financing an entrepreneurial venture. The guide will be made available on the day and will run through:

A: Grants – They exist but only for the “chosen few” – are you one of them?

B: Tax breaks – What are they and why are they useful?

C: Borrowing – If not the banks, then where? If the banks, then how?

D: Angel and VC funding – Who invested in whom in 2011 – A look at 464 UK high growth SME’s who secured investment in 2011 and what it says to those seeking funding today.

E: What’s new? –  A look at the new online resources of funding, crowd funding and upcoming government incentives and sources of help.

Joining Capital Enterprises to answer your questions will be a panel of experts and entrepreneurs.

To book your place click here.

4. Business Bootcamp Lounge

21^stFebruary

6-9pm

@O2 Workshop Tottenham Court Road.

The next Business Bootcamp Alumni Lounge will feature short presentations and a Q&A sessions with a number of London entrepreneurs who have recently raised investment funding from Angels and VC’s. If you have not been before and enjoyed the drinks, nibbles and good company then please check up out here.  http://www.meetup.com/BB-Lounge/events/49243982/

5. The Beginners guide to the “Lean Start-up”. (or How to bootstrap a high growth business).

23^rd February

10am- 12-30pm                  

@ O2 Workshop Tottenham Court Road  

The Lean start-up method is now the preferred method used by Silicon Valley start-ups and high growth USA entrepreneurs. If you want to know what it is, why it could give you a way to reduce the risk and cost of starting an ambitious business and how you can use tools such as the Canvas Business Model to get going, then enrol now for this free introductory workshop.

6. Pitching for Management:

27^th Feb     

5-7pm                                    

@ Nabarro’s Holborn WC1.

Capital Enterprise has joined forces with Angel News to co-sponsor a pitching for management event for those potential high growth companies that need to find the right management with the right customer contacts to enable them to scale their business.  To find out more please check out http://pitchingformanagementlondon17-eorg.eventbrite.com.

7. Special Offer- Free  1-2-1 Business Planning support

Capital Enterprise has secured a deal with its member CEME, to provide registered businesses in London who are looking to raise money, with a business consultant in order to help them complete their financial forecasts and finesse their business plans and pitches. If you are interested then please e-mail john@capitalenterprise.org

I have just finished reading the Start-up Genome report produced last year by a team from the Universities of Berkley, Stamford and the VC Black Box on whether there is a framework for understanding why start-ups ( specifically tech start-ups in Silicon Valley) succeed or not.

It is very interesting reading and I hope to incorporate many of the findings into future bootcamps particularly the Tech bootcamp and the “ Getting Started in Business” tasters events that I am happy to announce we  will be running with the Computer Science department of UCL and Imperial in the next few weeks.

There is a lot to digest especially concerning the 4 models they report tech start-ups can be segmented into and the subsequent different guidance and expert support services that companies that fall into one of these categories require. But I thought I would blog the summary of their overall findings and suggest that anyone who is interested should check out the report on   https://www.startupcompass.co/)

So here goes. The Start-up Genomes report key findings for tech entrepreneurs and the investors and mentors who support them are as follows:

1. Founders that learn are more successful-  Start-ups that have helpful mentors, track metrics effectively, and learn from start-up thought leaders raise 7x more money and have 3.5x better user growth. (The most important finding and lesson for anyone starting an ambitious business although given the sample size the exact numbers ( e.g. 3.5 x ) should be taken with a pinch of salt. )

2. Start-ups that pivot once or twice times raise 2.5x more money and have 3.6x better user growth, and are 52% less likely to scale prematurely than start-ups that pivot more than 2 times or not at all. (To pivot means to fundamentally change strategy to make sure your product fits the needs and demands of target customers. A pivot will require you to fundamentally change  what you are offering to customers, or the channel to market or the customer segment who will be your initial market. So it is good to adapt to market feedback but if you do it too often it is for obvious reasons not a good sign)

3. Many investors invest 2-3x more capital than necessary in start-ups that haven’t reached problem solution fit yet. They also over-invest in solo founders and founding teams without technical cofounders despite indicators that show that these teams have a much lower probability of success.

4. Investors who provide hands-on help have little or no effect on the company’s operational performance. But the right mentors significantly influence a company’s performance and ability to raise money. (However, this does not mean that investors don’t have a significant effect on valuations and M&A but it does suggest that the role of mentor and investor are significantly different.)

5. Solo founders take 3.6x longer to reach scale stage compared to a founding team of 2 and they are 2.3x less likely to pivot.

6. Business-heavy founding teams are 6.2x more likely to successfully scale with sales driven start-ups than with product centric start-ups. ( N.B. The Y-combinator model suggests the ideal team has a combination of people with sector knowledge/ credibility, business capability and sufficient in-house technical ability to get the product/service designed, made and delivered.)

7. Technical-heavy founding teams are 3.3x more likely to successfully scale with product-centric start-ups with no network effects than with product-centric start-ups that have network effects.

8. Balanced teams with one technical founder and one business founder raise 30% more money, have 2.9x more user growth and are 19% less likely to scale prematurely than technical or business-heavy founding teams.

9. Most successful founders are driven by impact rather than experience or money. (So they say)

10. Founders overestimate the value of IP before product market fit by 255%. (A classic example of endowment fallacy)

11. Start-ups need 2-3 times longer to validate their market than most founders expect. This underestimation creates the pressure to scale prematurely. ( From first-hand experience this rings true)

12. Premature scaling is the most common reason for start-ups to perform worse. They tend to lose the battle early on by getting ahead of themselves. (Whether it is more important than other strategic decisions is debatable. Bad management decisions and the lack of market demand are the main reason business fail and or under-perform)

13. Startups that haven’t raised money over-estimate their market size by 100x and often misinterpret their market as new.

14.B2C vs. B2B is not a meaningful segmentation of Internet start-ups  anymore because the Internet has changed the rules of business. ( A kind of tautology but I agree that tech businesses can be divided between those who can use the web to complete the sales/distribution cycle ( such as Google) and those who still require a real world sales function to convince a sceptical customer to buy ( such as Sage)

The report (based on a very small sample size) also  believes there are  6 stages that allo entrepreneurs go through

1. 1.       Discovery

Purpose: Start-ups are focused on validating whether they are solving a meaningful problem and whether anybody would hypothetically be interested in their solution.

Events: Founding team is formed, many customer interviews are conducted, value proposition is found, minimally viable products are created, team joins an accelerator or incubator, Friends and Family financing round, first mentors & advisors come on board.

Time: 5-7 months (average for all types)

Amount of External funding required: ( mostly from friends, family or fools) as $10-50K (or $7-35K)

1. 2.        Validation

Purpose: Start-ups are looking to get early validation that people are interested in exchanging their money or time/attention on the product.

Events: refinement of core features, initial user growth, metrics and analytics implementation, seed funding, first key hires, pivots (if necessary), first paying customers, product market fit.

Time: 3-5 months (average for all types)

Amount of External Funding Required: Seed investment of between $100-1.5M ( £75K-£1m) depending on type of start-up.

1. 3.       Efficiency

Purpose: Start-ups refine their business model and improve the efficiency of their customer acquisition process. Start-ups should be able to efficiently acquire customers in order to avoid scaling with a leaky bucket.

Events: value proposition refined, user experienced overhauled, conversion funnel optimized, viral/ sticky/ profitable promotion driven growth achieved, repeatable sales process and/or scalable customer acquisition channels found.

Time: 5-6 months (average for all types)

Amount of External Funding Required: 0 -recommended to wait until stage 4 until raising.

4) Scale

Purpose: Start-ups step on the pedal and try to drive growth very aggressively.

Events: Large A Round from Venture Capitalist, massive customer acquisition, back-end scalability improvements, first executive hires, process implementation, establishment of departments.

Time: 7-9 months (average for all types)

Amount of External funding Required: $1.5 – 7M depending on type. There is not much difference in the capital raised between stage 2 and 3, which is to be expected in our model because in Stage 3 a start-up should be focused on efficiency and there’s no need for excess capital beyond what was raised in stage 2.

5) Profit Maximization (not assessed in the Start-up Genome report)

6) Renewal or Decline (not assessed in the report)

I hope you agree all good food for thought.