Tackling the problem of trainaphobia
Last week I spent a very enjoyable evening in the company of the BBC’s technology correspondent Rory Cellan-Jones.
I would like to say it was just me and him, but I’d be lying. I was one of more than 200 tech companies, investors, advisors and media types at Manchester Town Hall for an event called Celebrating Tech 2017, organised by Mercia Technologies.
Mercia invest in tech businesses in the Midlands, North of England and Scotland so naturally the subject of funding was discussed.
Cellan-Jones, who hosts the weekly Tech Tent show on BBC World Service, asked: “Why are London-based VCs so afraid to get on a train?”
This was met by nods of agreement from the audience. “I call it trainaphobia.”
Trainaphobia may not be a medical problem but there’s no doubt that it’s a condition that afflicts London-based venture capitalists.
Prolific networker John Jones, forensic and corporate finance partner of accountants Beever and Struthers, was one of those in the audience at Manchester Town Hall and agreed 100 per cent.
He told me: “The facts speak for themselves. The majority of funding and investment sits in London. The North West and Birmingham are just two examples of areas with thriving tech sectors.
“VCs may be missing a trick by not coming out of London but it’s a two-way street. We can’t just wring our hands ourselves. We have to be proactive and keep taking our story to London to generate momentum so that the VCs can’t ignore the opportunity.”
John is more discreet than me but I’ve lost count of the number of times I’ve heard people complain about VCs who have never travelled north of the Watford Gap.
In political circles you hear a lot about the ‘Westminster Bubble’ and MPs being isolated from life outside of Parliament. The same is true of many investors and VCs. They’re missing a massive opportunity.
BusinessCloud has hosted roundtables in Manchester, Leeds, Newcastle, Birmingham and Bristol in recent months and although the cities may be different, the stories are the same.
If you want investment in your business you’ve got to jump on an overcrowded train to London and pitch to VCs, angel and institutional investors and high net worth individuals.
I was sitting next to Jenny Tooth, chief executive of UK Business Angels Association, at the Celebrating Tech 2017 event and she said the problem is compounded by the shortage of angel investors in some areas.
One well-known investor is Neil McArthur, who is the group innovation director of TalkTalk, and he’s spoken before about investors “hiding in the long grass” of Cheshire.
If you want investment then hopping on a train to London isn’t the worst thing in the world but my concern is that VCs who don’t want to leave their comfy offices in the capital are missing out on massive opportunities.
This is one of the reasons for the push towards the Northern Powerhouse. Mercia Technologies have long recognised they can get more bang for their buck outside London – but it begs the questions why others haven’t followed suit.