North-West tech start-ups ‘tapping in’ to networks to flourish

The young companies of the North-West are now better equipped than ever to secure funding and growth: but more can still be done, according to Mils & Reeve partner Paul Knight.

A combination of increased government focus and bottom-up network building is helping North-West tech start-ups to succeed; but more can still be done, according to Mills & Reeve partner Paul Knight.

Mills & Reeve and Knight himself are heavily involved in promoting tech in the region. They recently sponsored all-day forum Tech Invest Manchester and have a major base of operations in the city.

Knight is enthusiastic about the pace of progress he has seen in Manchester and the wider North-West region.

“I’m seeing some really impressive tech start-ups establishing themselves in the North West. Look at the likes of RealityMine for example. In April 2012, it was a tech start-up,” he says.

“Now it is being talked about as a potential $1 billion company. This means there are people around to mentor and share experiences that are really relevant for new tech businesses.”

Snow-blindness

Knight sees the “vast array of events and meet-ups” in and around Manchester as a good way for tech entrepreneurs to tap into the opportunities on offer. But he is slightly concerned that all of the diverse attempts to support the ecosystem may have the unintended consequence of leading to a sort of networking snow-blindness.

“I just wonder sometimes whether there are so many different things going on that it can be difficult for tech start-ups in the area to really make the most of what’s on offer,” he warns.

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But it’s not just a groundswell of local support that is pushing the Manchester tech scene forward. Chancellor George Osborne has made the creation of a 21st Century Northern Powerhouse one of his flagship policies. Tech and Manchester are very much to be at the epicentre of this new hub, and Knight sees this largely as a positive move in itself.

“Firstly, I think the rhetoric itself helps the tech sector in the North. It encourages talented individuals to explore the opportunities that Manchester and other cities have to offer,” he explains. “And investing £11 million into tech hubs in Manchester, Leeds and Sheffield is certainly a step in the right direction.”

Forensic analysis

But there is “always more to be done”. And Mills & Reeve themselves have taken a forensic look at the region and what is required with their Full Scale Ahead initiative.

“We interviewed 500 business leaders to explore the challenges they are facing,” Knight continues. “One of the top policy recommendations to come out from that was a recommendation for tax incentives for knowledge sharing.

“Given that the benefits of sharing and developing talents and ideas have been expressly acknowledged by government, it would be great to see this backed up with appropriate tax incentives.”

In a quandary that echoes challenges across the countries, finding useful common ground between entrepreneurs and investors can be tricky in Manchester. And although there are no quick fixes, Knight does see some practical steps that would help to bring the two camps close together.

“From talking to some tech companies that have recently obtained investment, it is clear that funding is available but the investors cannot find enough tech businesses that tick all their boxes,” he says. “So the message about what investors want tech start-ups to demonstrate when they come to them needs to keep being pushed out there.

“It would also be great to see the investment community supporting an online hub to match Tech.London – the world is moving online and having a single hub for sharing funding opportunities would mitigate issues arising from the dispersed nature of the tech scene in the North West.”

Further reading: Outbound M&A from Asia

Praseeda Nair

Kellen Rempel

Praseeda was Editor for GrowthBusiness.co.uk from 2016 to 2018.

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