Ian Mearns MP visits e2E, a "true North Eastern success story"

Labour MP for Gateshead Ian Mearns visited e2E, a VCT backed satellite communications company in his constituency.

Mearns heard how the company, founded in 1999, is working towards disrupting the way satellite communications are provided, by making them more accessible to smaller businesses. He was particularly interested to learn that e2E is building up its production and operational capabilities in the North East, with the ultimate aim of establishing the first UK Satellite and Service Operations Centre for nano-satellite communications.

 Mr Mearns was also welcomed by Andy Thomas of YFM Equity partners, who provided e2E with substantial Venture Capital Trust (VCT) investment in late 2017.  This investment allowed e2E to take a new technology – Software Defined Radio (SDR) – to market, while creating a number of new, highly skilled jobs in Gateshead.

Barry Ross, CEO of e2E, said:

The North East is an ideal location for our product and service operational aspirations, with plenty of enterprises on the doorstep that will benefit from cheaper satellite delivery from newer airborne platforms – particularly in rural regions.

The North East has excellent facilities and educational links that will help take us forward towards our vision. The investment options backed by YFM have further been well in line with our growth strategy, and brought into play much needed business support

Ian Mearns MP said:

e2E is a true North Eastern success story that Gateshead can be proud of.

Many small businesses I have met have had a clear idea of the path they wanted to travel, but have lacked the capital to get there.

“e2E, with the help of YFM, is a testament to just how successful small businesses can be when they have the required funding to support the growth they are capable of.

“I hope to be invited back!

Deidre Brock MP visits Curo Compensation in Edinburgh

Deidre Brock, SNP MP for Edinburgh North and Leith, visited technology company Curo Compensation in her constituency last Friday, along with Alan Robertson from VCTA member Maven. 

Curo’s innovative compensation management software is used to support people across 140 countries in more than 130 currencies, with customers including major blue chip corporations and multinationals. 

Investment from Maven and Downing allowed Curo to develop its technology around gender pay gap reporting and modify its product for SME customers, as well as adding extra staff and expanding into new markets. 

Johnny Mercer MP visits Chess Dyanmics in Plymouth

Johnny Mercer MP visited Chess Dynamics in his constituency, a defence and maritime technology company that has grown rapidly with support from VCTA member Beringea. 

VCTs managed by Beringea first invested in Chess Dynamics in 2008, with a further round of investment in 2014. Chess have, in the space of a decade, seen exponential growth and are now a leading presence within the sector. The team are looking to double their office presence within Plymouth, contributing to ever increasing opportunities, investment and potential within the city.

Johnny Mercer MP said “it was fantastic to visit Chess Dynamics to talk to staff and see their cutting-edge products. I am always pleased to see further defence and security-supplying companies build on their maritime needs and expand to Plymouth. These sectors are vital to the Plymouth economy and creating attractive jobs for STEM pupils.”

Dr Mike Green of Chess said: “We were delighted to host Johnny at our Plymouth office and show him the innovative research and development Chess is undertaking. We are dedicated to producing industry leading technology in Plymouth, and have plans for rapid growth over the next few years in the area."

 

 

Venture Capital Trust Association (VCTA) submission to the Treasury Select Committee’s SME Finance Enquiry

VCTs offer young, innovative and high-tech businesses up to £12m (£20m for Knowledge intensive SMEs) of risk capital for the long-term growth and development with experienced investors who offer their own human capital to help SMEs overcome the challenges they face when scaling up. 

Changes to the scheme rules in November 2015 have resulted in extremely lengthy delays in HMRCs processing of VCT investment applications.  These delays are preventing the effective delivery of risk finance to SMEs, causing serious problems for the businesses themselves.  Addressing these delays would mean that VCTs would be more effective in being able to invest in SMEs across the UK who are trying to scale up and employee more people.

Within the last few weeks, and while this inquiry into SME finance has been taking place, HM Treasury and HMRC have begun to address this issue. HMRC have said that they will not withdraw VCT status for an ‘inadvertent’ breach of the investment rules where the VCT has relied on the opinion of professional advisers before making an investment.

This is a helpful step but the VCTA believes that for VCTs to once again rely on professional advisors and unblock the investment process:

a.       HMRC needs to provide greater clarity concerning areas where it currently exercises a judgement over certain investment conditions;

b.      guidance on what actions a VCT would need to take to remedy an ‘inadvertent breach’ of VCT rules; and

c.       allow VCTs to hold a small number of investments that HMRC subsequently deems to be non-qualifying despite having relied on professional advisers.

Click here for more details about the Committee's inquiry.

See the full submission here. 

Venture Capital Trust Association (VCTA) submission to the Business, Energy and Industrial Strategy (BEIS) Committee’s small businesses and productivity inquiry

Businesses supported by VCTs are typically highly productive and drivers of local growth.  The potential economic benefit of VCT funding is currently not being fully exploited due to restrictions surrounding time limits, funding levels and bureaucratic delays during HMRC’s advance assurance process.

An increase in the age of businesses that VCTs can provide finance to, alongside an increase in the size of investment permitted, would do much to encourage higher rates of productivity and more scale ups across the UK. There is currently a funding shortage in rounds between £5 million to £50 million and for companies with a market capitalisation of between £15 million and £100 million. These companies are typically 10 or more years old and are not eligible for VCT investment.

The bureaucratic delays at HMRC are severely undermining the ability of high growth small businesses to access the finance they need to scale up. The current target for HMRC to process advance assurance applications, as announced in the 2017 Budget is 15 days, yet the average length of time for clearance currently stands at 64 days. Due to the draconian penalties regime in place for investments found to be non-qualifying, businesses cannot receive the funding until the investment has been formally approved by HMRC.

Click here for more details about the Committee's inquiry. 

See the full submission here. 

Chair of the 1922 Committee and Conservative MP for Altrincham has visited technology firm Matillion in his constituency.

Sir Graham heard how the company, founded by Altrincham local Matthew Scullion in 2011, has grown to become a world leader in technology, with large international clients including Pepsico and Siemens. The company has also expanded into the US, opening an office in New York in preparation for taking on American tech giants.

Sir Graham was also greeted by Dave Hall of YFM Equity partners, who provided Matillion with substantial Venture Capital Trust (VCT) investment in November 2016.  As a result of this investment, Matillion have been able to triple turnover and create 28 new roles in Altrincham.

CEO Matthew Scullion said: “It was a pleasure to welcome Sir Graham and show him what our incredible staff have achieved over the last few years.”

“The North West has always been a cradle of innovation, and with the right support from Government and investors like YFM, companies like Matillion in the region are poised to capitalise on the latest technological revolution.”

Sir Graham Brady MP said: “Matillion is a remarkable business. It is fantastic to see a local man choose to start such an innovative business here at home. It is crucial that we continue to support these businesses, as the backbone of our economy, to start-up and grow.”

“I wish them every success in expanding to the US, and beyond!”

About Matillion

  • Matillion are a software company that offers purpose-built, native ELT solutions for cloud data warehouse platforms.
  • Their headquarters are in Altrincham, and they also have an office in New York

About YFM

·         YFM Equity are an independent private equity business that invest in small, innovative businesses across the UK from offices in Leeds, London, Manchester, Birmingham and Sheffield.

About the VCTA

·         The Venture Capital Trust Association (VCTA) are an organisation representing fund managers from ten of the largest venture capital trust (VCT) funds in the UK, comprising of 75% of the industry, managing £2.9 billion.

Background

·         Venture Capital Trusts (VCT) are Government backed investment vehicles designed to channel capital to innovative, ambitious young firms.