Software Companies Failed By Funding & Support Structures: New Research Findings


Posted by MalcolmEvans on Tuesday 26th of July 2011 | 1 Comment(s)

Our recent research has shown conclusively that there is a dearth of funding and specific support for early stage software companies in the North West.

We have come to this strongly evidenced conclusion following extensive engagement with promising companies and through an ongoing analysis of the practices of individual funders.

Over the last 8-9 months we have interacted closely with over 20 software operations in the broader region. We have followed numerous "live" funding efforts and analysed both previous deals and instances where attempts to do deals have failed.

We have assessed the evaluative capacities and investment strategies of most of the main funders active in the region (which is not many!) and we have also tracked the assessemnt capacity of the various banks and also the real support input afforded by the universities, the incubators and business parks and by other formalised support agencies.

Overall, the software support environment is poor (we have tried to discount from our impressions and findings projects which we felt were themselves below a reasonable threshold of commercial credibility and viability - one must guard against conflating losers' angst with poor support).

However, by deploying Software as a Service (SaaS), software companies now have much greater potential to go global quickly than most other sectors.

Manufacturing companies take much longer to create distribution networks and many of the major potential markets (particularly BRICs) still have barriers to entry.

There should be no reason why the North West cannot produce some exciting software companies that can grow quickly – the region certainly has no shortage of talent. These are the barriers we are removing:

1. Limited Funding

Unfortunately, the UK and the North West in particular has a very shallow pool of individuals/organisations able and willing to step up to the mark and fund leading edge technologies. See, for specific examples, our recent article on the widespread lack of evaluative capacity within this region’s corporate financemainstream.

We are committed to remedying this situation: join with us if you think you can usefully become involved – we are currently pursuing funding sources locally, regionally, nationally and internationally. We are assembling our own lines of support, we are reaching out to tax experts and Enterprise Investment Scheme promoters to assist us in freeing up investment to help build great NW companies. We invite all professionals who have competence and ambition in these areas to talk with us.

2. Inadequate Support

We are currently working closely with a number of ambitious companies. From these engagements it is also patently obviously that there is a poverty of organisations within this region who can meaningfully contribute to the growth of sophisticated software businesses.

We are prepared to say it is as it is: vacuous innovation and mentoring programmes are grossly insufficient in the pursuit of world class companies. Cod psychology and generic rhetoric about growth and innovation is no substitute for technical and marketplace expertise.

Funding Enterprise has already assembled the core of what is fast emerging as the strongest specialist knowledge bank in the NW: come and talk to us if you feel you can contribute or benefit.

3. Poverty of Ambition

Software in the NW has become lop-sidedly design and locally focused in its cultural and commercial orientations. We are calling for a rebalancing with productisation and global ambition.

Come and talk with us if you share our vision that the NW software community deserves a larger presence on a world stage.

Comments



superuser's picture

Action Plan

Hi Malcolm

When do you think you might be in a position to discuss what actions you plan to take? It would also be of great benefit if you can find time to engage with the community by attending events.

Regards
Manoj