Showcase Event Press Release
Investors and Entrepreneurs Need Greater Understanding
Despite the importance of Venture Capital (VC) and Business Angel investment in high growth potential businesses, investors and entrepreneurs are failing to understand what drives each others' needs. This is the view of entrepreneur John Cavill who will be presenting the findings of his research into growth entrepreneurship at the QEII Conference Centre in Westminster on 22nd February 2007.
Cavill's paper was commissioned by the SEEDA-backed Enterprise Hub Network, which delivers intensive support to entrepreneurs and businesses seeking to bring pioneering ideas to market. It follows recent research among 144 of the region's most promising new ventures, 40% of which said they had underestimated the time and complexity of fundraising.
Cavill was asked by SEEDA to conduct a review of various academic studies into factors affecting new venture success. He focused on the two themes which have had the greatest impact on new ventures: Venture Funding and Entrepreneurial Teams. Research into this area is important because there is a very real need to support the process of funding high growth potential companies in their formative stages. Typically venture capitalists will no longer invest below a minimum threshold of £1 million, which means that business angels are increasingly financing the 'equity gap' experienced by entrepreneurs seeking seed and early stage finance.
This comes with a responsibility to ensure that proper investment decisions are made, argues John Cavill. "Although venture capitalists and Business Angels believe the most important factor in deciding whether to invest in a new company is its management team, they still rely heavily on their 'gut feel' to assess management capability," explains John. "A study into human capital valuation techniques used by American venture capitalists showed that by far the most effective approach adopted was used by just 13% of venture capitalists. At the same time, research shows that the inherent risks in VC funding are very high with an average of 40-55% of VC funds' portfolio companies either failing or achieving no more than break even."
John Cavill's analysis is that entrepreneurs are not understood as well as they might be. "There are different types of entrepreneurs – from people with enterprising ideas up to the 'ultrapreneur', such as a Branson or Dyson. The person who founded the company is often not the right individual to take the idea forward. Business Angels need to understand exactly what human capital they have in front of them – not just in one individual but in the team that will lead the company."
John believes there is a real need for both venture capitalists and Business Angels to improve their skills in accurately assessing new investment opportunities, and in particular the potential of entrepreneurial teams seeking funding. His research, which will be presented in full at the SEEDA Enterprise Hub Showcase on the 22nd of February, looks at the dynamics of entrepreneurial teams and explores the factors that go towards making up a team that will ultimately succeed or fail.
The SEEDA Enterprise Hub Showcase event takes place at the QEII Conference Centre, Westminster, on Thursday 22nd February 2007. Chaired by BBC Radio 4 Business presenter, Peter Day, the event will include a welcome introduction by James E. Brathwaite, CBE, Chairman of SEEDA, and a keynote speech by Luke Johnson, entrepreneur and Chairman of Channel 4.
The SEEDA Enterprise Hub Network began in 2001 as a flagship programme to accelerate the rate at which entrepreneurs, companies and academic researchers could produce successful businesses out of new ideas and concepts originating in the South East of England. The Network is currently working with over 1,500 businesses spread throughout the South East, including Surrey, Sussex, Kent, Oxfordshire, Hampshire, Buckinghamshire and Berkshire.
Since 2001 The Enterprise Hub Network has evolved and expanded to help hundreds of entrepreneurs and organisations bring highly pioneering and distinctive concepts to market. Many of the companies simply would have failed or not have accelerated their business propositions without the support of the Hub Network.
For further information about the Enterprise Hub Network and Showcase Event, please visit: enterprisehubnetwork.co.uk
For further press information, please contact:
Glen Goldsmith / Katie King
2thefore
Tel: 01483 811234 / 01403 254242 / 01892 520123
Mob: 07812 766338 / 07974 161179
Email: /
About SEEDA
SEEDA is the Government funded agency responsible for the sustainable economic development and regeneration of the South East of England - the driving force of the UK's economy. Our aim is to create a prosperous, dynamic and inspirational region by helping businesses compete more effectively, training a highly skilled workforce, supporting and enabling our communities while safeguarding our natural resources and cherishing our rich cultural heritage.
About the SEEDA Enterprise Hub Network
The Enterprise Hub Network is a SEEDA-backed organisation that helps entrepreneurial individuals and organisations bring highly pioneering and distinctive ideas to market.
Working as a close knit team of commercial experts in Hubs across the South East, the Network draws upon a wide range of specialists to help people realise those opportunities with the potential for high yield and scaleable growth.
Through its unmatched connections in the business, academic and public arenas, the Enterprise Hub Network provides premium, personalised support, giving entrepreneurs access to advanced business insight, technical knowledge and financial investment.
Due to SEEDA's funding, it can offer this world-class service to selected projects at low cost to the individual, making it the pre-eminent partner in the South East to transform knowledge into enterprise.
About John Cavill MA, ADipC, CDir, FIoD, FCIM Founder & Principal Consultant of Intermezzo Ventures
John Cavill has a strong track record in new ventures, business growth and management.
See http://www.intermezzo-ventures.com/expertise.htm
In 1995 John received an EFER (European Foundation for Entrepreneurship Research) award as 'One of Europe's Top 500 Dynamic Entrepreneurs' and in 1998 was nominated by 3i plc for the 'FT/Cartier Venturer of the Year Award'. John is a visiting at Henley Management College where he is conducting doctoral research into the characteristics of entrepreneurial teams.
John’s current business interests include non exec Chairman and lead investor in Creating Careers Ltd the UK’s leading online learning company for Further Education. He is also a member of the Institute of Directors' (IOD) interview panel for Chartered Director Accreditation and a SEEDA Merlin Mentor and High Growth Coach
Contact: SEEDA
Creation Date: 19th February 2007
