What Tech Track recognition means
As the former chief executive of online DVD rental business Lovefilm I can still recall the moment we first achieved a place on Tech Track 100. It was 2007 and we appeared at No 5 before going on to feature another three times.
The business was in its early days, still some four years away from our decision to sell to Amazon, in a deal that reportedly valued us at close to £200m. We also picked up the prize for best management team at the league table’s awards dinner, which was the icing on the cake.
For us, the recognition really did make a difference. We were able to tell potential partners, investors and recruits that we were on this nationally recognised league table, which gave us instant credibility, as it still does for fast-growing British tech firms today.
For example, recruitment is a big challenge for any fast-growing business and after we appeared in the Tech Track 100, quality people started to approach us, rather than us them.
As we scaled-up our operations, many of these people were key to our success. So as a Tech Track “alumnus”, I want to congratulate the founders and management teams of all 100 companies for achieving a place in this year’s league table. It is a phenomenal achievement and you should all feel rightly proud.
There has been significant change to Britain’s tech scene since 2007 and for the most part it has been tremendously positive. As a nation, we have become more sophisticated in our support for firms exploiting promising new technology and bringing disruptive new products and services to market.
You only need to look at the increasing number of British tech firms with billion dollar valuations — so-called “unicorns” — to see the positive shift that has occurred.
Looking back, the founders of social network Bebo sold to AOL for $850m in 2008, but there were few other such successes on that scale. Yet look at the league table this year and the likes of Fanduel (No 3), Ve Interactive (No1) and Farfetch (No17) are supporting their heady valuations with rapidly growing revenues.
One thing, however, that hasn’t changed is that life as an entrepreneur running a fastgrowing tech firm remains tough. Whether it is tackling recruitment or funding, attracting crucial experience to the boardroom or making long-term strategic decisions, the pressure is intense. And in a globally competitive trading environment, it’s a pressure that is only increasing.
For those attracting customers online, the pace of revenue growth can be hair-raising. The challenge of managing such expansion can be as great as managing no growth at all. And as tech firms gain traction, disrupting incumbents, it will not be long before they, in turn, face disruption from new entrants.
The ability to adapt, and quickly, has to be at the core of everything you do.
The persistence of such pressures, as well as the promise displayed by many of Britain’s current generation of tech firms, is why I have jumped at the chance to team up with BGF to invest £200m in tech ventures over the next five years.
The team also includes two very experienced tech investors — Rory Stirling from MMC Ventures and Harry Briggs from Balderton Capital. They will work with me to extend the reach of BGF’s funding and support younger, ambitious tech firms across Britain. Our objective is to back the British unicorns of the future.
As a source of growth capital, BGF has already established its reputation for funding and supporting winners, whether that’s Bullitt Group (No12) and Zone (No 91) in this year’s table or Skyscape, featured in the Ones to Watch section on page 19, or the likes of M Squared Lasers, GCI, Inoapps and Unruly, all of which have featured in the last 3 years. BGF has provided funding to these businesses, in return for a minority rather than a majority stake, at an important time in their development.
We see the investment as the first step in a longer-term partnership. When we were raising investment for Lovefilm there were few venture capital firms looking to invest large sums, but now entrepreneurs have a much greater choice of funding options. Angel investors in particular have become more active, encouraged by government initiatives such as the Enterprise Investment Scheme and its sibling, the Seed Enterprise Investment Scheme.
What makes BGF’s venture fund different is that we will be able to draw on the expertise of entrepreneurs who have been there and done it. We will work alongside founders, offering mentoring and coaching, rather than simply sitting across the boardroom table pursuing a competing agenda.
As we at BGF invest off our own balance sheet and do not have a typical fund with predetermined exit dates, we can offer entrepreneurs capital that is patient — there when they need it.
So I look forward to meeting as many of the founders of this year’s Tech Track 100 as I can at the 2015 awards dinner in November. When I attended representing Lovefilm, I met some fantastic entrepreneurs at a similar stage in developing businesses, and ultimately they became good friends.
I am sure this year’s cohort will make valuable contacts to benefit their own ventures.