6 ISSUES FOR JUST £6 Subscribe to Business & Professional Life today CLICK HERE

Nothing Ventured

PUBLISHED: 10:32 26 September 2012 | UPDATED: 21:57 20 February 2013

Nothing Ventured

Nothing Ventured

Research by Coutts bank shows that entrepreneurs are wary of Venture Capital as a source of investment – but is that because most of them haven't experienced it first hand? Christine Wadley explains

Nothing Ventured

Research by Coutts bank shows that entrepreneurs are wary of Venture Capital as a source of investment but is that because most of them havent experienced it first hand? Christine Wadley explains how to make venture capital investment work for Cotswold business.

Gloucestershires Local Economic Partnerships (LEP) Banking Forum recently launched a guide to raising finance for local businesses, including routes to finance, business plan tips, local grant making organisations, cash flows, business planning and mentoring.

At Coutts in Cheltenham, we often hear from local clients, particularly those who are successful entrepreneurs, looking for local businesses in which to invest.

Whether this is investing in one of the many technology or innovation companies across the Cotswolds, or a new start up, we so often witness first hand the critical role that venture capital investment plays in building businesses across the region.

Venture Capital is a critical role for entrepreneurs in the UK, and there is an argument that of all sources of capital available to smaller businesses, venture capital investors are the ones most attuned to the entrepreneurial mindset of a business with great potential.

Coutts recent report, The Price for Growth, which looks at entrepreneurs views of venture capital and private equity, showed some surprising findings. Although these routes to investment may have firmly established themselves as drivers of business growth, many entrepreneurs are wary of the venture capital experience and are sceptical about the outcomes. It is notable that of these entrepreneurs, the majority are those who have not experienced venture capital investment first-hand.

It is hard to build knowledge without first-hand experience and our research outlines ways in which entrepreneurs can understand the Venture Capitalist Mindset and maximise their chances of working successfully with this type of investment.

Firstly, you need to understand how investors think. In a landscape where investor priorities change, entrepreneurs should do their own due diligence on potential venture capital investors as part of planning their funding needs, and strive to create relationships with them.

Secondly, it is important to get the right deal. Once you have made an informed decision that venture capital investment is the right route for your business, your second area of focus is to get the right mindset to deliver what the business needs. You may need to raise money to grow but that doesnt mean that you have to accept money at any price from a venture capital investor. Taking control of the deal and being clear about what you really want from the investors can pave the way for success.

This means preparing yourself and your team for your dealings with investors and being clear in your mind about what is important you and what is not, in a venture capital deal. Areas of preparation include being honest and confident about what you want, not compromising on quality, making sure the cultural fit is right and not being too controlling, but think about the opportunity being offered. These are critical to getting the deal which fits with you and your business.

Finally, there is the last stage of delivering success from the deal. The mechanics of the venture capital investor-entrepreneur relationship is the key area that, once in a deal, you simply cant afford to get it wrong. The relationship with a venture capital investor is one that requires proactive and skilled management from an entrepreneur. Being clear about the boundaries, targets and control upfront is what frees you to concentrate on growth and success.

There is no doubt that entrepreneurs see venture capital as an important source of finance and associate it with increased growth in their businesses. What our research shows however, is that when it comes to considering this source of finance, negative perceptions around the nature of venture capital and how to work effectively with these investors dont reflect the true experience of those who have done this - are likely to cloud the judgment of entrepreneurs and get in the way of approaching venture capital with a mindset which will deliver a successful deal. There is clearly an opportunity for more entrepreneurs to look again at this source of finance which could unlock future growth in their business.

A full copy of the report can be obtained by emailing christine.wadley@coutts.com


More from Cotswold Life


“‘Flexitarians’ can do one though, being alleged vegetarians who still can’t resist the sizzling siren song of the bacon sandwich when no-one is looking.” Editor Mike Lowe is attempting to seek reconciliation with those he has annoyed… well, sort of.

Read more
Yesterday, 14:24

Choral carol services and grand instrumental performances, with the backdrop of some of the Cotswolds most picturesque locations, are perfect ways to embrace the festivities. We pick some of the best carol services and concerts to enjoy in the region

Read more
Yesterday, 11:35

“This letting to Oxford nanoSystems is a fantastic example of how we are able to provide first class facilities for growing technology companies at Abingdon Business Park.”

Read more
Yesterday, 11:28

One of the UK’s leading training and education specialists has launched a skills hub in Nuneaton

Read more
Yesterday, 11:19

“The logistics hub is another example of where we have worked in partnership to support skills needs in the area and link our student body with future job opportunities.”

Read more
Yesterday, 11:07

“It was fantastic to see how this project is making a real difference to the lives of young people at risk of social exclusion.”

Read more
Yesterday, 10:57

It has become the 90th store to accept the gift card in Cheltenham

Read more

As well as three days of action-packed racing and tradition, there’s plenty to do away from the course at this year’s November Meeting. Neil Phillips, The Wine Tipster, shares his 14 suggestions on how to make the most of your time at Cheltenham Racecourse

Read more
Wed, 15:59

From festive light switch-ons and Santa’s Grottos, to Victorian Christmas Fayres and late-night shopping, we’ve covered what’s on in and around the Cotswolds this season

Read more
Wed, 15:42

Property prices across Gloucestershire and the Cotswolds have risen steadily over the last few years, reflecting the trend across the country. But which area has shown the most dramatic hike in prices recently, and how does your postcode and house type compare with others in the area? You may be surprised to see the results...

Read more
Wed, 11:43

Wine Wednesday’s with Vintopia of Tetbury.

Read more
Wed, 10:37

Festive a la carte menu launches in Grey’s Brasserie from 26th November.

Read more
Wed, 09:31

Cotswold Life readers enjoy a complimentary glass of wine with our compliments when joining us for our Autumn Feast Lunch Offer.

Read more
Tue, 15:01

Harnessing the power of social media, charity awards and dreaming up new projects - it’s all in a day’s work for Gloucestershire children’s charity Pied Piper and its corporate supporters

Read more

Newsletter Sign Up

Sign up to the following newsletters:

Sign up to receive our regular email newsletter

Our Privacy Policy

Topics of Interest

Food and Drink Directory A+ Education

Subscribe or buy a mag today

subscription ad

Local Business Directory

Property Search