Posted on Tue 18 Aug 2020
New ways with Investors
This is Part Four of a series of four blogs Gill Wildman is writing for the Studio. Gill Wildman is Business Development Adviser for Watershed and SWCTN.
We are working with brilliant people who are producing a whole new set of dynamic Creative Businesses, whilst striding those very cutting edges of future-facing technology. They are creating new products, services, experiences and platforms and embedding these in Businesses driven by clear values. Their purpose may not be initially to make vast amounts of money, unlike some of their start-up counterparts. Instead they use money as the means to create a sustainable and resilient vehicle for the kind of things they want to make, that is as relevant and useful for their audiences as possible. The Founders we are working with engage social impact alongside critical thinking and this is embodied through the VR experiences, robots, games, books, data products and apps they are creating.
However, the worrying part is that the percentage of those companies coming through our programmes that will successfully make it through to scale and grow is very small. One key part in that growth journey is about getting the money to grow, and for this I am talking about engaging with investors, something we encourage wholeheartedly. Yet this engagement comes with challenges. Even now, we find that investors (not all, but the most vocal) consider Creative Businesses as higher risk than risky technology start-ups. Indeed some of them may well be!
We are doing three things to address this. The first is that we are working with investors, to understand them, learn how they think and we've brought together a group to help guide us through how we do this. We are listening to a range of investors from Venture Capitalist and Equity investors to Angels, Social Impact and Ethical investors. Last year we held a lunch specifically for investors and Creative Companies at Watershed, so that they could get to meet each other. The investors witnessed first-hand the amazing work at an early stage and the Companies could see the investors as real people, shifting their mutual perceptions of each other as Dragons Den caricatures.
The second is to work with the Companies we have in our programmes to make sure they have a healthy start with investors - that they can determine the right kind of investor and to start the process of building a relationship with them. We have produced a guide to help Creative Companies to do this. This includes investor planning and thinking about the programmes we deliver. We want them to feel comfortable with making that move.
The last form of work is to do further research into what the Companies need and what else we could produce for them in terms of commissioning research into opportunities for new financial mechanisms. A specific gap exists in the kinds of investment provision for the early stage Creative Companies we work with. Despite some great existing initiatives, most equity investment is too large for their needs. The smaller amounts they need to make the move from grant to thriving business are missing from the investment landscape. We want to know why that is the case. We want to find out what sorts of new financial mechanisms can be devised for small businesses and to get investors interested in joining us in their development.
Please contact us at Watershed if you are interested in investing in creative companies or hearing more about this work.