The background of the session appears to be that in Scotland, there are relatively few investors that “get” web technology companies – a category that includes giants like eBay, Amazon, Facebook and Google. Interestingly, Brian Caufield pointed out that well-known angel Ron Conway, an early investor in twitter, had said “I don’t get Twitter, but I do get growth” – perhaps web-tech companies in Scotland generating strong growth should take heart from that!
The speakers all recognised that acitivity within Scotland was going to tend towards the web-tech opportunities that require relatively little funding and can get to revenue relatively quickly, but even here, entrepreneurs are having to work very hard to find seed funding and are having to look overseas for VC.
Brendon Richardson finished the session with an inspiring call-to-action for entrepreneurs to lead the way and bring investors into the sector with them. To achieve this, Nigel Eccles believes that entrepreneurs need to start lean, focus on revenue growth, and seek funding for accelerated growth once there is a proven customer acquisition model.
Nigel also made a couple of observations about VCs I rather liked. The first is that “VCs are not like taxi drivers“. Initially baffling, he went on to explain that the difference between a good taxi driver and a bad one is relatively small – you tend to end up at the destination in either case. The difference with VCs is much greater – a bad VC can be catastrophic for a business, with feedback and advice sending it off toward failure. He also noted that “there is an inverse correlation between confidence and comptence“, that the VCs with the worst advice were most confident in it, and the most competent VCs offered the benefit of their experience in a much more subtle and collaborative way.
I’ll probably write some more posts based on this event once I’ve had time to digest it a little…