London is not the “bed of roses” for tech investment that many people think it is, according to the chief executive of the Manchester Tech Trust.
Peter Lusty runs the organisation which helps North West tech start-ups access more funding by connecting them with investors.
“I speak to London investors and they complain about people there overvaluing their businesses and the fact that there are more investors chasing deals, so it’s not the bed of roses people think it is,” he told BusinessCloud.
“If Manchester and the North can demonstrate it has opportunities we will increase the number of people looking to invest here. Distance isn’t the issue, it’s the visibility of the opportunity.”
He continued: “At the moment start-ups might go to an event and happen to sit next to somebody who can help them with investment, but it needs to be more organised than that.”
The founders of used car search website Carsnip attended about 100 meetings in 18 months to raise the funding they needed – $100,000 of which was secured over the phone from a US investor – but not a penny came from London.
Pedro Madeira, head of research at Beauhurst, says that investors prefer London-based tech firms so they can keep an eye on the founders.
Hampshire-based Morgan Innovation and Technology began investing in medtech companies outside London after encountering funding issues for its own products.
And Leeds-based marketing automation business Force24 resorted to more traditional funding methods after failing to gain funding from VCs with a London bias.