Tech start-ups urged to bypass London

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TECHNOLOGY start-ups outside London have a competitive advantage thanks to lower costs and strong business development support, according to an investor in the industry.

Patrick Bradley, the chief executive of Ingenious Ventures, will pick 15 companies this summer, each of which will receive a £150,000 investment.Bradley sent a team of investment managers to Scotland last week on a roadshow to recruit potential companies.

Last year Ingenious raised £7 million from investors through a seed enterprise investment scheme, which offers tax relief to purchasers of new shares in start-up companies.

Bradley said: “People have asked us why don’t you just stay in London, there must be lots of companies in London we could fund. That is probably quite true.

“But what we are saying to companies is that you shouldn’t be starting up in London, you should be going out to the regions where office space is cheaper, hiring people can be cheaper, there are lots of grants and subsidies.

“You should not be coming into some incredibly high-priced London office because we don’t want to see our £150,000 going off into rental payments. We want to encourage entrepreneurs around the country to realise they have a competitive advantage by not being in London.”

Ingenious met eight firms in Glasgow at the City Chambers and five at Edinburgh’s TechCube incubator.

Jamie Coleman, managing director of TechCube, said: “The blossoming of tech talent is creating a wealth of amazing businesses and significant innovation. I’m delighted Ingenious chose TechCube to meet with Scottish companies.”

Bradley’s comments came as the City of Edinburgh Council secured a £1m investment fund for tech start-ups from East Lothian-based investor New Media Partners (NMP). Speaking at Thursday’s launch of the Creative Exchange incubator in Leith, economy convenor Councillor Frank Ross revealed that the local authority had teamed up with NMP managing director Danny Meaney.

Under the deal, 40 companies over the next two years will each receive “intensive mentoring” and a £25,000 cash injection, in return for an equity stake. Ross said: “This programme has the potential to deliver £1m in new private sector investment over the next two years.”

NMP helps start-ups to take their new media and digital technologies to market, but has also invested in firms such as technology services provider MediaNet and IPTV agency TripleSee.