A short rant on the future of Industry / Employment in Scotland
I have worked in Venture capital backed Industries for over 12 years and I have seen the impact on Industry in Scotland and North America. The thought model goes like this for most of the folks involved in starting companies...and I am not saying that it is a correct or wrong way of thinking
Get an Idea>Product>service
Get a few mates to work on it with you
Get some VC money
Prove your Idea
Get someone to buy you or in 5% of new companies go for an IPO
Cash out and retire-do it again - become an Angel Investor and spend your time listening to pitches from guys and gals looking to start there own company
Cycle time 3 to 7 years
To build a sustainable Industry base in Scotland this model is not going to work, Scottish Executive and Scottish Enterprise need to wake up and smell the coffee, there strategy will not build a sustainable industry base, it has been aligned with the VC mentality of quick in/ out and gone and if you don't meet the profile your done....they do a PV on you and pull the cash a year or to into the programme ( This sometimes needs to be done...but it's done as a last step not deriguer). The Venture Capital Industry has it's place in the overall scheme of things and an important one but it is the Government that is responsible to help build a sustainable industrial base and help give jobs to it's people as is the same in any country.
We need to get back to building good old fashioned companies the grow slowly and organically these can utilize the low cost manufacturing bases around the world or the same priced low cost service industries as an extension of themselves to bring there idea to the market, bringing in revenue and jobs, not in huge numbers as the Silicon industry did or the coal industry but in small clusters of high skilled enterprises.
I hope to see the Scottish Government get there act together, they have some good guys working for them but they need to get the correct mission, not cuass but build a better Scotland....
Would love to hear from some folks on this matter...
I hope you have a great new year...you are the only one that can make it so..
Slainte
Gordon
I have worked in Venture capital backed Industries for over 12 years and I have seen the impact on Industry in Scotland and North America. The thought model goes like this for most of the folks involved in starting companies...and I am not saying that it is a correct or wrong way of thinking
Get an Idea>Product>service
Get a few mates to work on it with you
Get some VC money
Prove your Idea
Get someone to buy you or in 5% of new companies go for an IPO
Cash out and retire-do it again - become an Angel Investor and spend your time listening to pitches from guys and gals looking to start there own company
Cycle time 3 to 7 years
To build a sustainable Industry base in Scotland this model is not going to work, Scottish Executive and Scottish Enterprise need to wake up and smell the coffee, there strategy will not build a sustainable industry base, it has been aligned with the VC mentality of quick in/ out and gone and if you don't meet the profile your done....they do a PV on you and pull the cash a year or to into the programme ( This sometimes needs to be done...but it's done as a last step not deriguer). The Venture Capital Industry has it's place in the overall scheme of things and an important one but it is the Government that is responsible to help build a sustainable industrial base and help give jobs to it's people as is the same in any country.
We need to get back to building good old fashioned companies the grow slowly and organically these can utilize the low cost manufacturing bases around the world or the same priced low cost service industries as an extension of themselves to bring there idea to the market, bringing in revenue and jobs, not in huge numbers as the Silicon industry did or the coal industry but in small clusters of high skilled enterprises.
I hope to see the Scottish Government get there act together, they have some good guys working for them but they need to get the correct mission, not cuass but build a better Scotland....
Would love to hear from some folks on this matter...
I hope you have a great new year...you are the only one that can make it so..
Slainte
Gordon
1 comment:
Hi Gordon
Interesting article - I too have worked in VC (and Angel) backed industries for 8/9 years, predominantly helping them to raise funding of all types. I too have seen the pressure of investors (or more often, investors' investors) forcing a company into a quick sale or a short term strategy so they can make a return and all too often, it happens just when the company is really starting to make a difference. In recent years, we've seen Scottish Enterprise jump on the bandwagon with the Scottish Co-Investment Fund and more recently the Scottish Seed Fund and I have to be honest and say that I've used both extensively for my clients. But you're right in that the VC model does not always lend itself to building a sustainable, growth economy in Scotland. There are exceptions - Wolfson is an obvious one. But what's the alternative? There are successful entrepreneurs in Scotland who have made a lot of money - where are they now??? It is people like that that we need to put early stage funding into companies to lend their expertise, contacts, time and (importantly) patience. It's particularly bad in the West of Scotland where I work predominantly. I tell you what, if you come up with a solution please let me know!!!!
Cheers
Brendan
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