A serial tech entrepreneur says founders need to get investment from the right investors that are right for their business
David Levine is the principal of the Manchester Angels, which was founded by GP Bullhound and Bruntwood in May 2022 to identify high-potential businesses seeking early-stage funding and match them with the right angels.
Speaking at a tech roundtable organised by TechBlast and tech specialist, Fairmont Recruitment, Levine said Manchester was ‘buzzing’ but described the region’s investment ecosystem as ‘complicated’.
“Helping businesses raise money is, of course, really interesting although it’s a lot of hard work,” he said. “I built my own business, I attracted investment from angels, VCs and private equity.
“I think we have some great investors. We now have Manchester Angels, which is particularly there to solve the problem of that first £250-500k into really great businesses.
“Part of the reason I established that, along with GP Bullhound and Bruntwood, is because we have this really interesting dynamic.
“You’ve got private equity on one end of the scale, and you have VC on the other end of the scale. Private equity always look to growth, quite modest growth but consistent, profitable growth, quite boring, quite risk averse but great at the right stage of a business.
Manchester Angels launched to support early-stage businesses
“When you’re at the top of that hockey curve growth, you’re continuing to grow but slower, that’s when they’re typically great on that side of PE.
“Then you have the far end of the scale with the total risk-embracing VC who work on the basis that of 10 investments, six will typically fail, two will wash their face and two will return the fund.
“And then you have people in between. I think we have a unique dynamic here in Manchester of not having enough VCs that embrace risk.”
Levine said Praetura Ventures were doing some ‘great work’ and were a great example of a Northern-based VC that gets the balance mostly right.
He warned: “We have a number of investors who are quite frankly private equity but are pretending to be venture capital.
“They don’t have the experience, they don’t have the knowledge, they don’t have the capability to understand what it’s like to invest in early stage technology businesses; their expectations can be badly misaligned.
“That can be quite damaging to an ecosystem even when they have the best intentions.
“Early stage technology investment from angels who have been there, done that and made a ton of mistakes, is really, really crucial. And that’s why we set up Manchester Angels and why we’re attracting an awful lot of attention.”
Levine said the mood in Manchester was much more positive than the way it’s being reported in the media.
“There’s a general sense of, ‘it’s a bit crap right now’ in terms of the press you read because of the cost of living and the high energy prices,” he said.
“But there’s also a huge sense of optimism, that we can do something really special.
“People have been achieving great things and you see that mentality right across the tech scene right now. It’s not about a bubble. It’s not about people being crazy and saying they can do the most amazing things with nothing.
“People are very realistic about challenges and what they can bring to the table, but it’s just a genuine sense of optimism and it’s great to be part of.”
Levine said Enterprise City and Bonded Warehouse were just two examples of the impressive offices that Manchester’s tech firms had to choose from.
He also highlighted the work Greater Manchester Mayor Andy Burnham was doing in the sector.
“I was with the Greater Manchester Mayor Andy Burnham a few months ago in the event that Northern Gritstone was running,” he said. “His clarity of his mission of reinvigorating Manchester is incredible to be around.
“The businesses we have here are incredible. There’s a lot of experience and a lot of talent.
“Do have enough experience in scaling, repeatable sales playbooks? I’m not quite sure we have that yet.
“We have a little pockets but from a regional perspective of knowing how to scale a sales team, we have a little bit to do.
“However Manchester is a great place to build a business.”
Levine was joined on the roundtable by Laura Herbert, head of people, Apadmi; Neil Ruth, VP Partnerships, Lunio; Richard Fallon, founder / CTO, Naimuri; Emma-Louise Fusari, founder, In-House Health; Tom Stockton, CEO and co-founder, Fuzzy Labs; Ryan Swann, founder, RiskSmart; Sam Burgess, co-founder and CEO, SamsonVT; and Jack Donohue, CEO, Fairmont Recruitment.
https://businesscloud.co.uk/company/samsonvt/