Tech Roundtable with Alistair Crane

Abchaps recently hosted 10 tech-loving City high fliers at our office. Everyone, without exception, around the table had first-hand experience of an Exit of some kind. We were fortunate enough to have Alistair Crane, Executive Vice President of Monitise Create, to co-host the event, following his starring role on Abchat just before Christmas. Alistair is widely considered as one of London’s top young entrepreneurs. He took his own start-up, Grapple Mobile, through a successful exit when sold to Monitise in September 2013. Alistair was the perfect candidate to chair the roundtable as we gained insights into the trends, opportunities and anxieties of those in the tech start-up space.

All guests agreed that there was a lack of funding from the banks available to early stage start-ups. The papers are littered with stories of how the Government plans to boost SME funding, but what about financial help for those who just have a really great idea? Those ideas need financial support to become the next big thing, and whilst there is undoubtedly a lot of over zealous non-starters out there, we must remember that one or two of those will be the next Twitter or maybe the next Grapple.

3D printing Source: www.engadget.com

There was a feeling that beyond the banks, there is also a lack of options for those embarking on small capital raises. Tech start-ups can bump into the right people, operating in the right place at the right time and pick up the first £500,000 - £1m required to commercialise or expand. But if they don’t come across the people in the know, how are they supposed to gain access to capital?

It was proposed that the answer lies in the little black books of a few well-connected individuals in the City. A guest rightfully asked who now actually owns those leather-bound, pocket-sized and extremely coveted collections of paper? The consensus was that it was only through building relationships, getting out there and meeting both the more experienced players and indeed their successors, can anyone succeed.

Alistair focused on the importance of having a solid ‘Team’ in the aforementioned blogpost. It became clear from the lunch though, that particularly for a young CEO, ‘The Team’ is not just defined as those directly working under the payroll of the Company. It also includes advisers and intermediaries working alongside the young entrepreneur.

An article published by Niklas Zennström in the Financial Times recently questioned whether, given the ease of collaboration now facilitated by the Internet, the HQ of a start-up needs to be in a buzzing tech hub? Alistair, for one chose not to base his Company in Tech City, instead preferring to work from Soho, the media hub of the UK. This was however, only because he wanted to be close to his clients. It seems that wherever you choose to work from, you need to be amongst at least one of the most important stakeholders of your business, whether it be that clients, investors, advisers or the best talent pool.

Wearable Technology Source: broadband4europe.com

Conversations went onto examine future trends: Are disruptive technologies the future or are the strongest players in the field those who focus on developing a pre-existing technology? Where will tech newbies such as Twitter be in five years time in relation to the firmly established giants found in other sectors? The unique business life cycle of a tech company is definitely something that investors are still becoming accustomed to. Alistair believes (he admits perhaps due to a recent visit to the ever-optimistic United States), the likes of Twitter have a definite staying power and have gained traction in a sceptical but porous market.

There is no doubt that it’s an exciting space to be in; the lunch was an excellent opportunity to hear from those who are on the ground, enjoying the highs of a fledgling sector but also coming face to face with the daily hurdles of a growth industry. One thing is for sure, talking to the tech community is invaluable, and conversation is key. No tech start-up, nor adviser, is an island. Or, as the school lunch hall suggested, a slightly awkward geek. It is an exciting, prosperous and energetic community who are already succeeding, as shown by Alistair Crane. With the right teams and support networks, the industry will, undoubtedly, continue to go from strength to strength in the coming years.

Stephanie Watson

Follow us on Twitter @AbchurchComms

ISA investors take AIM

The government's decision this week to enable shares listed on AIM to be held in ISAs demonstrates that it’s now happy to ease investor protection in order to meet its desire for SMEs to have sufficient access to funding. It sees AIM investors as a potential source of cash that the banks are still loath to provide. This move comes amid confidence returning to the City and activity picking up.

This move is good news for SMEs who have struggled to source capital over the past few years. This is also good news for investors. It makes AIM shares one of the most tax-advantaged of all investments. In most cases, they are already exempt from inheritance tax. From next year, investors won’t have to pay stamp duty on AIM stocks, and the new rules now add income tax and capital gains tax exemptions to the list of benefits.

AIM has seen its highs and lows. Before the 2008 crash it was thriving as the City was beaming with confidence and large institutions were on the hunt for good opportunities. Hundreds of companies headed to AIM and in 2006 alone, £10bn was raised. When the crash took hold everything came to a grinding halt and the number of companies headed to AIM dropped dramatically. This year companies picked up just £337m of new money, a meager sum in comparison to the pre-crash hey days.

As confidence returns to the City this is good news for the junior market. AIM offers great profit opportunities. As Patrick Connolly from Independent Financial Advisor Chase de Vere says: "These companies are typically more dynamic and have greater growth potential than larger firms, which are often at the consolidation stage of their development. Over most reasonable time periods it is likely that smaller companies will outperform their larger counterparts."

Hopefully AIM will start seeing more success stories such as Majestic Wine and Asos, both of which have richly rewarded investors.

Alistair de Kare-Silver

Follow us on Twitter @AbchurchComms

Five Minute Abchat: John Peat, Seymour Pierce

John Peat

John Peat, Director of Equity Sales at Seymour Pierce and long-time friend and business associate of Abchurch, takes a few minutes for a five minute Abchat and explains what it takes to be a great salesman.

 

What did you want to be when you grew up?

Either the Army or farming, but ended up reading Law at Oxford, so there you go.

How did you get in to Equity Sales?

I was working in the Trust Department of Withers Solicitors, and had to raise some money from a Trust. I rang up the broker, who said his assistant had just left, I suggested myself, we had lunch, I was offered the job and the rest is history.

Describe your role in 20 words or less.

Trying to add value and attempting to get my clients, institutional investors, to buy or sell stocks on my humble advice.

If I wasn't talking to you now, what would you be doing?

Depends on the time of day! Speaking to clients, in meetings, talking to colleagues or possibly, if I am lucky, lunching.

What is the most interesting thing about your work?

Every day is different and a challenge. Whatever anybody says, there is always something going on. Who couldn't love a job which is affected by politics, economics, weather, you name it. Also you end up making some very good friends, whose friendships last longer than your career.

Is there a common misconception about Sales?

Probably, and usually from a position of ignorance. Any salesman realises that irresponsible advice will eventually find them out, and it is much better to work from the basis that your client's success is ultimately your success.

How has the industry changed over the past couple of years?

Having been in this industry for over 33 years, I would find that an easier question to answer. The last couple of years have been particularly tough compared to those glorious years prior to the credit crunch. These last years have been a huge challenge, and have really tested one's confidence, ability and optimism, though we must always, in our job, imagine that better times are just around the corner.

What do you expect to see in the City within the next twelve months?

Unless we see a dramatic pick up in volumes and politicians both domestically and internationally taking positive action, I can see further pain and further mergers between broking firms, and in some cases firms throwing in the towel. Always remember in our industry where you have a merger between two broking firms, one and one makes one.

Follow us on Twitter @AbchurchComms

Institutional Investors in AIM Breakfast 2011

On Thursday 20^th October Julian, Jo, Quincy and Oliver attended the Institutional Investors in AIM 2011 breakfast, organised by Vitesse media.

Whilst the equity markets have continued to be incredibly volatile, the fact that Vitesse’s report revealed that institutional investors still have some £37.3 billion invested in AIM, up from £32.7 billion last year, should give all those involved within AIM some much needed confidence leading into next year.

With the continued malaise within the eurozone, it should not come as much of a surprise that institutions such as Blackrock and Henderson Global Investors are focusing their investments on emerging markets. Africa in particular, with its wealth of natural resources and minerals, has attracted a lot of investor interest, similarly, Asia and South America.

Following the presentation of the report, the breakfast provided all the attending advisers with an opportunity to network and it was great to see lots of familiar faces. The concluding remark of the report, that 54% of AIM is still owned by institutions, reiterated to all that even in tougher markets, there remains an active investor interest in growth companies with strong investment stories and quality management teams.

Follow us on Twitter @AbchurchComms