British Business Bank

The most interesting session at this year's Venturefest Yorkshire was From Concept to Commercialization a panel discussion chaired by Nigel Walker of the Technology Strategy Board. One of the members of the panel was Ken Cooper of the British Business Bank ("BBB"). As I had not heard of the BBB before I buttonholed Mr Cooper on his way out and asked him to tell me a little more about his institution which is described as "a state-backed economic development bank" that supports "economic growth by bringing together public and private sector funds to create more effective and efficient finance markets for smaller businesses in the UK."

Surprisingly the BBB is not a throwback to the days of Harold Wilson or even Gordon Brown but a creation of the present government.  Paragraph 2.116 of HM Treasury's Autumn Statement 2012 contained the following statement:

"Business Bank – As announced by the Chancellor and Secretary of State for Business, Innovation and Skills in September 2012, the Government will create a Business Bank. It will deploy £1 billion of additional capital to stimulate the private sector market for long-term capital and address structural gaps in the supply of finance to SMEs. As part of this, the Government will co-invest at least £300 million over the next two years, alongside private investors, in channels that will help diversify the sources of finance available to SMEs. The Business Bank will bring together under a single institution the strategy, management and communication of existing government finance schemes for SMEs. In addition, the Government will also seek to bring government-backed business advice services closer together, harmonise their engagement with customers and coordinate them closely with finance interventions, to improve accessibility for SMEs. A number of the Business Bank’s functions will be operational from spring 2013, with the institution becoming fully operational in autumn 2014. The Secretary of State for Business, Innovation and Skills will set out further details later in December 2012."

Mr. Cooper told me that the BBB is at present merely a programme within the Department for Business, Innovation and Skills ("BIS").  It is not yet authorized or regulated by the Financial Conduct Authority or the Bank of England. However, Her Majesty's government has applied to the European Commission for confirmation that the BBB will fall outside the prohibition of art 107 (1) of the Treaty on the Functioning of the European Union. Should HMG's application be successful the programme will be transferred to a public company by the name of the British Business Bank Plc which will provide various types of financial support for small and medium enterprises ("SME").

BIS expects to unlock up to £10 billion of extra funding for SME over the next 5 years and it has set out how it intends to achieve that objective on the "What we do" page of the BBB website. Rather more detail is given in a presentation dated Fed 2014 entitled "British Business Bank Unlocking Finance for British Business."  The presentation notes that SME in the UK invest far less than their competitors in other EU countries and a number of reasons have been identified as to why that is so. These include

• High market concentration - It is said that there is a highly concentrated market for smaller business lending in the UK, which leads to lack of diversity of financing choices for smaller businesses
• Viable smaller businesses are not being served well enough
• Capital constraints on lenders, and
• Lack of longer term development capital.

The BBB proposes solutions for all those problems. Thus the problem that smaller businesses are not being served well enough will be met by debt programmes, start-up loans, enterprise finance guarantee, equity programmes, enterprise capital funds ("ECF"s), ECF Venture Capital Catalyst, Business Angel CoFund, UK Innovation Investment Fund and the Aspire Fund.

In his talk in York on Thursday Mr Cooper spoke a little about the Angel CoFund which was created with a £50 m grant from the Regional Growth Fund in 2011. It is a £100m investment fund for promising UK businesses and it is intended to help develop business angel investment in this country. The Angel CoFund works very closely with other business angel networks which are represented by the UK Business Angels Association ("UKBAA") and indeed Mr Cooper is a member of the board of UKBAA.

One of the topics discussed that was discussed for some time on Thursday was intellectual property. Nicole Ballantyne of the GrowthAccelerator and PERA Consulting who was also on the panel said that many businesses were unaware of the IP that they already owned much of which could be converted into revenue. She mentioned an IP audit scheme and spoke of the need to protect IP. When the discussion was opened to the floor I rose to point out the distinction between intellectual assets and intellectual property and that businesses can actually ruin themselves by spending too much time, effort and money on patents and other registered rights that they do not need.

Anyone wishing to take advantage of those programmes, whether as inventor, entrepreneur or investor, will need first class advice not just onIP but also on tax. Uniquely our chambers can provide both.  My colleagues and I in our IP, Technology and Media Law Group can advise on IP strategy, patenting and the like and our colleagues in Atlas Tax Chambers which includes Anne Fairpo can advise on such matters as the patent box and other incentives. Should anyone wish to discuss this article or out services generally, he or she should call us on 020 7404 5252 during office hours, fill out my contact form, tweet me, write on my wall or get in touch through G+, Linkedin or Xing.

Venturefest - the Original

I have just come back from Venturerfest. Not the one on York race course that takes place in February which I have attended every year since 2005 but the Oxford original now in its 13th year. Even though it meant getting up at 05:00 this morning, driving 320 miles along congested motorways and paying sky high parking charges in Oxford town centre because the P + R was full the event was worth attending.

Venturefest - for those who have never heard of it - is an exhibition and series of workshops which are free together with an optional breakfast and dinner which are not. The breakfast starts at 07:00 and the dinner finishes not far short of midnight so it can be a very long day indeed. The idea seems to be to bring together the universities with local businesspeople and professionals. The talks follow themes called "streams" in Oxford and "tracks" in York. This was today's programme for Oxford and last February's for York. These were the exhibitors today at Oxford and the "Innovation Showcase" exhibitors at York.

So how do the two events compare? Though I hate to admit it as I am a Northerner (Mancunian by birth but having a Yorkshire mother and living in Holmfirth) the difference between Venturefest and Venturefest Yorkshire was pretty well the same as the difference between Harvey Nicks in Knightsbridge and its Briggate offshoot.

For a start the Oxford venue was so much more impressive and convenient. It takes place at the University's business school which was opened by Romano Prodi, the former president of the European Commission and Prime Minister of Italy. The lecture theatre, where the funding stream talks and pitches took place, was opened by President Nelson Mandela and bears his name. Interesting modern sculptures lined the corridors. By contrast the York event takes place at the race course centre which is a rabbit warren of a building with two sets of stairs leading to floors at different levels. Consequently, the only way to get from the upper floor off one set of stairs is to descend to the ground floor and then go up the other. About the only advantage that York race course has over Said is that you can park free of charge near the entrance and it doesn't require an hour to crawl from the Botley interchange to Worcester Street.

Then the speakers were so much more interesting. I particularly enjoyed Prof Collier's presentation on the HiPER project whose enthusiasm for his subject was infectious. He explained simply but thoroughly not shying away from simple equations in terms that even a media studies graduate or at least a classicist could understand how lasers make hydrogen fuse into helium thus releasing enormous energy. I really envy his students. Frank Salzgeber of the European Space Agency was impressive too. So, too, were the VC panel in the funding stream. Alas, because of congestion on the M1 I missed the opening talk by Prof. Andrew Hamilton, principal of Oxford University, on universities as an engine of growth to which I was particularly looking forward.

The Oxford exhibition, which was in a marquee, was smaller than the one in York but I spent a lot longer going around it. Dehns and Gill Jennings & Every were there and it was good to meet Laura Ramsay of Dehns and Peter Finnie and Karen Connolly of GJE. Also B4. the two universities, the Knowledge Transfer Network, the Oxfordshire LEP, product design consultants, developers of ingenious software and lots of other interesting folk.

Altogether a very good day out and I hope to be back next year.

Venturefest: Innovation Showcase, 16 Feb 2011

One of the highlights of the Yorkshire business calendar over the last few years has been Venturefest Yorkshire. This is a one day conference and exhibition which takes place at York race course every February brings together Yorkshire business, professions, schools and universities. The next Venturefest takes place on 16 February

One of the best events of the day is the Innovation Showcase. This is an opportunity for up to 30 young high growth companies to compete for a prize worth at least £10,000. Among the advantages of participating in the showcase are a stand worth over £400 and opportunities to meet investors, professional advisers, senior industry specialists and other like minded entrepreneurs,

The business must be in Yorkshire. It must be less than 36 months old. And it must be involved in science, technology or innovation. Application forms can be downloaded here. Further information can be obtained from Anne Salisbury on 07881 505428.