More ‘grey hairs' are needed for London’s Tech City to succeed in the long run, according to the British Private Equity and Venture Capital Association (BVCA).
More mentoring and advice is needed from experienced entrepreneurs and investors for the start-ups which now populate large areas of East London, a new report from the Centre for London and BVCA suggests. The new study, A Tale of Tech City, looks at the technology cluster that has sprung up in East London, which has been dubbed 'Silicon Roundabout', and aims to examine the challenges that exist. Its key finding suggests that there is a 'significant demand' from Tech City-based entrepreneurs for mentors and advice to support the growth of their businesses. This advice, the report says, is particularly aimed at the process of seeking institutional investment through seed capital and funding rounds. The report draws comparisons with Silicon Valley, which it says has a superior network of 'seasoned entrepreneurs and angel and venture capital investors’. Under its 'access to finance' section the report finds that there is a lack of understanding of the digital sector by financiers and, on the other side of the fence, a lack of knowledge of how to raise finance. The BVCA and Centre for London also say that the attention from Downing Street towards the promotion of the area, along with the role of the Tech City Investment Organisation, is creating 'wariness about the misaligned incentives' To ratify the situation the study suggests that East London's existing professional networks should develop mentoring activities and meet-ups for younger firms. Furthermore, it proposes that angel and venture capital firms relocate to East London as well as high street banks developing specialist digital economy offerings. Mark Florman, CEO of the BVCA, says, 'There is no longer any dispute that we have the makings of a genuine, world class, technology hub on our doorstep. 'However as the report makes very clear, to help it fulfill its potential, the investment community will need to become more engaged, sharing our knowledge and experience with entrepreneurs before they would normally come onto our radar.'