Technology ecosystem review - Towards the Tipping Point: progress report

3. Investment

Scottish Government’s Global Capital Investment Plan sets out an approach to ‘crowd in’ private capital to build new markets and deliver a Net Zero, Wellbeing Economy.

We want to work with investors who share our aim to address the “grand challenges” that we face in Scotland and around the world - by providing targeted, direct intervention as and where appropriate, strengthening connections and making the funding landscape easier to navigate overall.

We know there are two particular investment challenges for Scottish start-ups trying to raise growth capital – which are raising funds at the Early-Seed and Series A stages of their company’s journey.

STER makes a series of proposals to address these issues based on better engagement with the investor community in support of a partnership approach between the public and private sectors.

In parallel, Scottish Enterprise has aligned its support offer to early-stage high-potential companies by combining its entrepreneurship and investment teams – bringing expertise in unlocking investment together with specialist services to help companies raise growth capital, while also offering wrap around advisory support to help companies scale up.

Progress on STER recommendations on investment includes:

• Progress towards the establishment of a new Series A fund, supported by the Scottish Government through the Scottish National Investment Bank,
• Work to develop a new £150 million fund for Scottish businesses in partnership with the British Business Bank, to address gaps in the supply of growth capital,
• A new fund for female-founded companies in Scotland, delivered through collaboration between Investing Woman Angels and the Scottish National Investment Bank, and
• A strategic review of funding available to Scottish businesses, which includes support with external fund-raising expenses, to ensure that funding is offered in ways that best support company growth.

Other work delivered to date includes an initiative to map the activity that is already taking place to address funding gaps, including work ongoing outside of the public sector.

For example, Barclays Eagle Labs has developed a Demo Directory that sends short video clips featuring start-up companies seeking investment to a group of over 260 active investors.

300 founders have created demos to date and 44% of the companies involved have been successful in raising investment within six months. Eagle Labs are scaling this platform further and will launch a new platform before the end of this financial year.

Ecosystem Fund recipient case study: Mint Ventures

In Spring 2022 Mint Ventures was supported by a Scottish Government grant, to deliver inspiring regional events to encourage more women to learn about angel investing, consider becoming angel investors and provide much needed capital for women-led companies to grow.

For early-stage companies to grow, angel investment is a critical source of capital however, less than 12% of business angels in Scotland are women. Women are 50% more likely to invest in women-led businesses than men, so increasing the number of women business angels will help more women-led and diverse teams access the capital they need.

Key outcomes

This pilot project was highly successful in both creating a growing community of like-minded women angel investors and demystifying the process of angel investment for women entrepreneurs.

Three ‘Women Backing Women’ face-to-face roadshows took place in the Borders, Edinburgh, and Perth for women to learn about angel investing with an impressive 70% attendance rate despite COVID-19 restrictions having just been lifted. An online roadshow was held for women unable to attend in-person due to COVID-19 and caring commitments. Plus, two ‘Inspiring Women’ online events were held with international business angels sharing their journeys and expertise.

Participant feedback

“Excellent mix of speakers and participant questions. Really honest and friendly atmosphere. Not at all intimidating and very inspiring.” – event participant

Next steps and plans for the future

Continuing to build a community of women angel investors is key to changing the current ecosystem and will be achieved through:

• Continued follow up, taking time to build relationships and provide further information to reach the goal of more women business angels.
• Further ‘Women Backing Women’ roadshow events, with a particular focus on additional regional areas to grow the community throughout Scotland.

Ecosystem Fund recipient case study: Mint Ventures – continued

• Collaboration with support organisations and joint events to build financial confidence and support the journey to becoming a business angel.
• Continuing to work with partner angel groups to support women into angel investing.

Gillian Fleming, Chief Executive Officer of Mint Ventures

“Mint Ventures was delighted to receive recent support from the Scottish Technology Ecosystem Fund.

This support allowed us to deliver an initial regional education program to help women understand what is involved in becoming an angel investor. Crucially it allowed us to collaborate within the ecosystem and develop new networks, connecting potential angel investors with socially, ethically or environmentally responsible business start-ups looking for funding.

Our mission is to democratise angel investing and make it more accessible to business women from all walks of life. By doing this, we will not only empower women to make their own investment decisions, we will also unlock more early-stage equity investment, especially for women-led businesses which have for too long been under-represented and underfunded.”

About Mint Ventures

Mint Ventures are a women-led business angel investment group offering capital for women entrepreneurs and diverse executive teams or boards.

They support women to become angel investors with online training and investing from as little as £2,000 per deal.

Next Steps

• Develop more investment vehicles to support entrepreneurship with our key partners including The Scottish National Investment Bank, Scottish Enterprise Growth Investments, Scottish Growth Scheme and the British Business Bank. Our objective will be to create the best possible funding environment for Scotland’s tech start up community.