Image via WikipediaDr Samantha Sharpe is part of the team at the Centre for Business Research, Judge Business School, University of Cambridge studying early stage companies. She is funded by NESTA and has a project in the same area as the NESTA project using Equity Fingerprint, the business plan resource.
In her talk at a meeting at Lancster University Management School (when will it be re-named Lancaster Business School?), Samanthan outlined her work on researching the portfolio of investments made by the N W Brown Group, now IQ Capital Partners. She has been allowed acess to all the confidential information and so is only able to produce summaries of her data. Most interesting was a graph which related to Equity Fingerprint. But whilst Equity Fingerprint concentrates on the decisions made by entrepreneurs in raising fund and how it impacts on their ownership of the company, Samantha’s graph showed the total funing of each round from equity, loan and grants – it showed the gearing achieved by the entrepreneurs on the funds raised. It would be good to incorporate a measure of the change in valuation at each stage. I also suggested that she showed the number of founders at each round as it appears that most Active Equity Companies have three or more founderswhich is very different from Passive Equity Companies which have fewer than three founders.
Of course the sample reflects the types of team which will approach a relatively small player in theUK funding and not the entrepreneurs who will chose other routes such as a trade investment, angels or VCs.
Would a study across the funding groups show that entrepreneurs who take a specific route – customer funding to VC – be significantly more successful than companies following the IQ Capital Partners route or taking investment from Cambridge Enterprise? Or should we stop studying and get on with building business?
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