Relaunch of investment body Connect delayed

Published on Saturday 23 May 2009 14:12

THE relaunch of Connect Scotland, the Dragons' Den-style investment organisation, has been put back to the winter with an investment conference now planned for November 5.

By then organisers hope to have a director at the helm of a re-energised technology and investment vehicle replacing the previous organisation which folded last July after struggling with mounting debts.

Connect was originally expected to undergo a rebirth in the summer or at the very latest in early autumn, with significant numbers of new and early- stage enterprises keen to catch the eye of prospective investors.

Now, it has been decided to relaunch the organisation in line with Chancellor Alistair Darling's Budget forecast that the UK economy will significantly pick up around Christmas.

After Connect closed down Glasgow Opportunities stepped in to acquire its assets and GO's chief executive Isabell Majewsky said last December that it would be searching for a director.

Six months on and Majewsky told Scotland on Sunday: "We are growing organically. But there is no appointment yet."

Meanwhile, the organisation is being incubated within the GO Group. The new model will be tied into a newly formed Connect UK framework, combining with two English business networking agencies Connect Yorkshire and Connect Midlands.

The Scottish arm will emerge a much leaner fundraising and networking body, as the new owners learn the lessons of mistakes made by its predecessor.

Last time Connect attracted the backing of organisations such as Scottish Enterprise and Bank of Scotland, but it was such over-reliance that eventually brought about its demise.

This was despite more than a decade of activity when Connect secured 220 million in private equity and helped 165 companies, including Wolfson Microelectronics, Stem Cell Sciences and Microemissive Displays. Connect's fundraising events for young technology companies became highly popular in the investment marketplace.

Despite its success, Connect Scotland, based on a University of California model, struggled with growing debts and ran into problems when attempting to secure new sources of income. The revived agency will not rely so heavily on public sector support although an element of such backing will still be sought.

GO stressed that in a changing marketplace the current appetite for investing has diminished and the number of early-stage firms looking for finance significantly reduced.

It hopes such interest will pick up around the end of the year and that Connect Scotland within a UK network will attract more attention on the global scene.

A British Private Equity and Venture Capital Association survey has found that many young businesses are having difficulty attracting fresh investments this year.

The BVCA has called on the UK Government to give more support to enable such firms to fulfil their potential, especially as they form the cornerstone of economic recovery.