Let's tackle the belief that being based in Scotland is a barrier to success - Claudia Cavalluzzo
More so here in Scotland, a nation that has undoubtedly created a strong, connected environment giving aspiring entrepreneurs the platforms and opportunities to access funding, skills and the business network.
This is in parallel to a thriving investment community championing the start-ups of the future.
Scottish Enterprise has recently reported record levels – more than £257 million – of private sector investment into early-stage businesses in 2020/21. Encouragingly, and testament to the international appeal of Scottish companies, more than half of this finance came from global venture capital firms and corporate investors.
The appointment of former Skyscanner executive Mark Logan as Scotland’s first chief entrepreneur is also a positive step; a sign the Scottish Government prioritises and values entrepreneurship.
However, in comparison to nations of similar size and demographics, Scotland lags behind in the number and economic impact of high growth companies. Sweden is a shining light – a small country investing heavily in new business innovation. The value of the Swedish ecosystem – €239 billion – is Europe’s highest per capita.
For Scotland to fulfil its aspirations of being recognised on the global stage like Sweden, it needs to drive inward investment and raise its ambitions beyond geographical boundaries. A good start would be more scaler hubs outside Edinburgh – like the Tech Scaler contract recently won by CodeBase to create seven hubs across the country.
Looking at the bigger picture, I’m calling for a collective approach – for investors to put their faith in the pipeline of young companies which will ultimately benefit all of Scotland (and beyond), be it from an economic, environmental and societal point of view.
Recently, I’ve noticed a striking shift in the direction of business concepts aimed at making a positive difference on net zero. More big backers should understand that nowadays it is likely smaller firms hold the keys to the greenest solutions.
But without more funding, we will increasingly hear stories like that of Amphista Therapeutics, an exciting spinout from the University of Dundee which is developing innovative therapies for a wide range of diseases. The company was recently named as one of Fierce Biotech’s top 15 most promising early-stage biotechnology companies for 2022 – selected from hundreds around the world. The company chose to relocate its headquarters to Cambridge, where it felt it could raise more funding for the future.
To prevent this ‘investment drain’, we need to tackle the belief that being headquartered in Scotland is a barrier to success. A Scottish address does not mean companies can’t ask for investment from elsewhere. Angel investors certainly used to be geographically bound, but the pandemic showed us that this doesn’t need to be the case.
I also find that founders are often uncomfortable asking for enough money to give their company room to grow. They ask instead for what they think they can get. That needs to change.
Scotland-based entrepreneurs need to be bolder, and think bigger, when asking for investment. This comes back to ambition. They must believe they can be the best in the world, and plan accordingly.
How do we give them this confidence? We show them it’s possible by extolling the virtues of the success stories like Bellrock Technology, Elasmogen and Novosound, who call Scotland home, to a much broader audience.
To help with this, Converge is taking six fledgling Scottish start-ups to Scotland House in London for a chance to pitch to potential investors. Collectively as a nation, we need to take more of this sort of activity to global financial hubs.
Scotland has no shortage of potential – I see it every day. Let’s come together to nurture those possibilities and create a culture where entrepreneurship is truly supported, for the good of our economy, local communities, and society.
Claudia Cavalluzzo, executive director, Converge
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