North West start-ups 'struggling with investment know-how'
A new survey of tech start-ups and mentors in the North West suggests that many of the North West’s new businesses lack knowledge of how to raise investment.
Conducted by Tech Manchester, an organisation set up to support tech start-ups, the survey suggests that less than a fifth of start-ups feel confident in raising investment.
The findings reveal that 19 per cent of respondents felt they had good knowledge or confidence in raising investment at the beginning of the 12-month programme, rising to 58 per cent by the end.
More than half of startups felt they lacked knowledge and confidence in ‘creating a pitch deck’ and ‘pitching’ at the outset.
The survey details the journey of 86 mentor and start-up partnerships within its mentoring programme, measuring levels of confidence and knowledge among start-ups at the beginning and end of the programme.
Tech Manchester’s mentoring scheme has so far trained hundreds of mentors and facilitated a total of 170 mentor and startup relationships. The organisation is funded by cloud hosting firm UKFast and provides tech-focussed businesses with support initiatives including the mentoring programme, business skills workshops and PR and communications support.
Tech Manchester director Patricia Keating said: “We saw the biggest increases of knowledge and confidence in raising investment and pitching to investors.
“Speaking from experience, the language around investment can easily exclude people who haven't encountered it before. We've shown that you can have a significant impact with a few lessons on how to approach investment and pitching.”
Additionally, HR was the single weakest knowledge area at the outset of the programme, with startups in the dark about recruiting and people management.
Keating added: “A large proportion of founders have never managed people or been party to HR processes within their previous roles, so it remains the most significant knowledge gap among startups.
On completion of the initial cohort, 87 per cent of startup and mentor partnerships plan to continue their relationships beyond the scope of the programme.
Reece Douglas, founder of Social Plug and a mentee in the programme, added: “I didn’t know anything about the different investment pathways when I joined Tech Manchester. The process of getting funding can be expensive and it’s difficult to know who to trust, so it’s critical to have an impartial third party to give advice or recommend others who can help.
“It’s clear that there is a knowledge gap around the different funding options, but being in the mentoring scheme gave me the tools and knowledge to understand exactly the type of investment my business needs to target to move forward.”