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DON’T CONFUSE ELECTION ISSUES WITH ECONOMIC ISSUES
Chairman Brian Blakemore looks ahead to what’s going to be a busy 2015
Midven has long taken a pragmatic but positive approach to business, and I believe that realism will be at the heart of our activity in 2015.
With the opening salvos of the General Election campaign already being fired, there is a distinct air of uncertainty. However, the last year has seen the UK economy continue to improve with lower unemployment, lower inflation and higher growth than expected.
So, whilst there is plenty of reason for optimism, it’s hard to escape the fragility that elections bring to business. It’s not hard to see why. There is an inevitable period of uncertainty in the run-up to a General Election – though locally we may think it should be “business as usual,” in reality many businesses put things like hiring on hold as we wait to see whether we are in for another coalition, perhaps including a change of leading party, or if this time we have an outright winner.
My clear thought has always been that we should not confuse election issues with economic issues. Yes, in the long term a change of government will have an impact, but the economy is not going to change overnight because a few politicians swap roles. None of us should allow the innovation which so many of our portfolio companies are justifiably proud to stagnate because the UK is going to the ballot box.
Midven and the companies in which we invest had a very active 2014. We completed a significant number of investments across our three main funds – both new investments and follow-ons, and that continues apace.
A number of our portfolio companies have developed to the stage where an exit is a realistic possibility and this is one of our key areas of focus for 2015, alongside continuing the pace and scope of our investments and exploring opportunities to expand our funding base.
Entrepreneurialism will continue to flourish whatever the colour of our political leaders, but while they are under the microscope it’s the SMEs of this country that provide the beating heart of UK business – and we all need to keep our eyes on the ball.
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Chancellor goes back to fund-amentals with good news statement
There was positive news for innovation and SMEs in the Chancellor’s Autumn Statement, with money going into schemes to support their development through future funding.
 Whilst SMEs continue to be the “engine room” that helps the economy grow, there is still all too often a gap between the stage where ideas are generated and where they reach the point they are ready for funding.
It was good, therefore, to see George Osborne announce some specific measures which will directly have a positive impact on many small firms and start-ups looking to grow. He increased R&D tax credit for SMEs to 230 per cent and doubled Small Business Rate Relief, as well as streamlining the application process – all of it, on the face of it, good news for innovative companies. He also announced £0.8 billion of money for major new research facilities around the country, including £61 million for the High Value Manufacturing Catapult Centre.
These centres act as a conduit between research and commercialisation and are therefore essentially hubs to help companies move from the research stage to taking products to market.
This is a vital move, as many of the ideas and innovations generated in these companies across the UK fail to get past the early stage because of a lack of funding.
Mr Osborne also said that SMEs will have access to an extra £500 million of lending through the EFGS loan scheme, and the additional £400 million he announced for the British Business Bank will provide some businesses with the essential capital they need to grow as well as allowing fledgling enterprises to expand.
All in all, we felt this was a good statement for enterprise and bodes well for 2015. You can read the Chancellor’s Autumn Statement in full here.
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NEWS FROM PORTFOLIO COMPANIES
Web company has designs on growth after Midven investment
Leamington firm Webmoco will continue to expand its product development programme following significant investment from Midven’s Exceed Fund.
The company provides web design and development, mobile application development and software and e-commerce solutions – and lists some household names amongst its clients.
The Exceed Fund will invest £680,000 over three tranches to help the company continue its product development as well as providing further growth capital.
Webmoco combines IT expertise with an understanding of brand development – and has developed a SaaS product to provide an electronic-based reporting system across multiple platforms. The company has also developed an innovative software platform which improves, analyses and mobilises the reporting process for organisations with multiple layers of management and complex business processes.
Midven’s investment executive John Slaughter oversaw the investment process and said the company had been making “excellent progress.”
Record-breaking last 12 months for Gemba
Software company Gemba Solutions has reported record order levels in the last 12 months – and is predicting great things for 2015 too.
The company – based in Nuneaton and which has received investment from Midven - provides production management systems which increase capacity whilst cutting labour and energy costs.
Managing director Richard Oakden puts the success in part down to a strategy of partnering with clients for the long term.
“We make every effort to ensure clients get real, quantifiable benefit from our solutions and services and in turn we’re rewarded by their loyalty to us. We’re still working with a number of the very first clients we had when we started the business in 2002,” he said.
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