Startup funding, angels and opportunity in a devilish downturn
By Alex Bellinger, 12th September 2008 at 5:58 pm
This week seems to have been packed with pitching startups. Receiving most attention, online at least, was the TechCrunch 50 event in San Francisco.
But TechCrunch frenemy Demo was also taking place, while in Europe Seedcamp announced its list of 25 startups for Seedcamp Week designed to provide specialist one-to-one mentoring, panel sessions and networking for early stage entrepreneurs.
Next week another talented band of UK tech startups will be heading off to New York on the first UK Trade & Investment-backed Digital Mission. We’ll be releasing a podcast on Monday which will include interviews with many of the businesses taking part.
For me, this flurry of tech startup activity has also coincided with some interesting conversations about how the economy is affecting early stage investment, not just in web/tech startups, but more broadly for businesses that have traditionally fallen into the funding equity gap.
A senior figure in one of the UK’s largest networks dedicated to matching investors with growing SMEs said to me earlier in the week that they’d seen an increase in new investors looking for opportunities and more high quality businesses coming on board to seek funding.
As bank borrowing becomes tougher and more expensive, quality small businesses are increasingly looking to release equity to fund growth. An interesting shift which means the downturn is providing a devilishly good opportunity for angel investors to get into the market.
I also talked to a deal making lawyer and Bill Morrow of Angels’ Den who confirmed that foreign investors are being attracted to the UK right now as sterling weakens. Returns on some types of commercial property and UK-based fast growth startups are being viewed as an attractive investment risk.
Seems to me that silver linings are here to stay, even if it feels like we’ve not seen the sun for months.
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It will be interesting to see how funding will change in the coming years, I personally think traditional funding is a thing of the past.
Comment by Justin Gough — 15 September 2008 #
Hi Justin, funnily enough I think what we’ve got used to in terms of lending criteria over the last 6-7 years has been the exception. I believe traditional funding will make a come back. Which means we’re all going to have to work much harder for it either in our businesses or in our private lives. The sooner lax borrowing criteria disappear the better.
Comment by Alex Bellinger — 15 September 2008 #
I still think we need to be careful with the markets as confidence is still very fragile - especially with this morning’s news.
The next 12 months will prove to be very interesting as I see many Angel Investors and venture capitalists are getting their “ducks in a row” to take their markets by storm as confidence returns.
Comment by Angels Den — 15 September 2008 #
What do you mean by ‘take their markets by storm’? btw do you have a name other than ‘Angels Den’? I know you’re not Bill, so reveal yourself!
Comment by Alex Bellinger — 15 September 2008 #